Real estate investment in all the countries of southern Europe (Portugal, Spain and Italy) reached an all-time high in 2022. However, it was investment in property in Portugal that saw the greatest year-on-year increase.
According to figures from Savills, reported by The Portugal News, a total of €3.3 billion was invested in property in Portugal. Furthermore, a record 59% of the property spend across southern Europe came from overseas investors.
With the rising popularity of the country firmly in mind, this article considers ten reasons to buy property in Portugal. It begins with the first reason many expats highlight when asked, “so, why Portugal?”
1. The wonderful weather
Portugal enjoys a warm, sunny and consistent climate that’s much envied by those in gloomier parts of Europe. Lisbon is the third sunniest city in Europe, with an average of around 2800 hours of annual sun.
Broadly speaking, the winter is short and mild, and the summer is long and hot. However, Portugal’s climate is more varied, across different regions, than some may expect. This presents plenty of options for those who want something slightly different to the long hot summers of the Algarve.
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2. Outdoor living
Portugal’s weather, especially in the south, creates a place where people can enjoy pavement cafés and beach life (almost) all year round. It’s a perfect destination for those who turn seasonally affected during long, dull winters. Property in Portugal offers an escape from the doldrums – whether it’s for a permanent move or a sunny bolthole.
3. A (relatively) stable property market
Recent data showed Portugal’s property prices rising 17.1% year-on-year. While it seems unlikely that such stratospheric rises will continue, there’s currently little to indicate speculation of a “crash,” as is the case in several other countries.
Ricardo Guimarães, director of Confidencial Imobiliário, recently said that “there continues to be a structural lack of supply and that demand, even if in a possible slowdown, remains higher than the product replacement capacity, in an imbalance that sustains the continuity of rising prices.”
4. An established expat community
Portugal has a large and settled community of overseas residents, many of whom speak the language and are well integrated with their local communities.
New buyers can choose between established “expat areas,” complete with widely spoken English and all the comforts of home, or places off the beaten track where they can still expect to be welcomed with open arms.
5. Tax-efficient living
Even though Portugal has recently ceased it’s Golden Visa scheme, there are still plenty of financial benefits of moving to Portugal. The Non-Habitual Resident tax scheme allows qualifying new residents to benefit from a flat rate of tax on Portuguese income, and to pay no tax at all on foreign sourced income for up to ten years.
In addition, there’s also no inheritance tax in Portugal, although it’s worth noting that there’s stamp duty charged to beneficiaries on Portuguese assets – good financial advice is essential.
6. New initiatives
In October 2022, Portugal launched a new digital nomad visa, complementing its D7 visa for retirees and those in receipt of passive income. This illustrates the country’s consistent commitment to launching initiatives to attract new residents and people who wish to buy property in Portugal. The country offers a genuine welcome to newcomers.
7. Affordable luxury
Many things that are considered indulgences and luxuries elsewhere are a part of everyday life for everyone in Portugal. The coffee and the wine are both world-class, yet almost laughably inexpensive – and the fact they can often be enjoyed in beaming sunshine is an added bonus.
Affordable “menu del dia” meals out can prove as affordable as eating at home, and the simplest of apartments often comes with access to a pool. Life in Portugal can feel rich indeed, even on a small budget.
8. Constant demand for rental property in Portugal
At the time of writing, there is some controversy around short-term rental property in Portugal – specifically around the impact Airbnb-type rentals have on the availability of homes for permanent residents.
However, regardless of how the situation plays out, it’s clear that there’s unstoppable demand for rental homes in Portugal. The government is even going so far as to incentivise owners who are willing to provide long term rentals to residents.
The upshot of this is that property in Portugal is in strong demand from renters – both tourists and locals. This provides great reassurance for investors who don’t intend to live in their Portuguese home full-time, or those whose plans may change in the future.
Portugal was ranked sixth out of 163 countries in the world in the 2023 Global Peace Index. This takes into account a wide range of factors, from political stability, incidents of violent conflict, homicide rates and terrorist incidents.
By contrast, the United Kingdom ranked 34th, and the USA 129th.
Portugal’s safe and peaceful feel is noticeable. Many people say it feels like the UK of many decades past, with a sense of respect for elders and authority that is considered to be lacking elsewhere.
10. A Slow Pace of Life
Portugal’s cities are modern and thriving. Lisbon, particularly, is an increasingly popular hub for entrepreneurs and start-ups. However, as a whole, the country retains a slow and relaxed pace of life, where people take time over lunch, and watch the world go by whilst nursing an espresso.
Those seeking a change of pace and a dialling back of the commercialised, “work hard, play hard” lifestyle can be sure to find it in Portugal.