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Lisbon: Portugal’s capital

Are you considering real estate in Europe? Well, look no further than Lisbon. Portugal’s capital not only offers a balance of affordability but also boasts steady market growth and a strategic location. In this comprehensive guide, you’ll gain an in-depth look at Lisbon’s dynamic property market. Here we’ll uncover key opportunities and provide valuable insights to assist you in making informed decisions that perfectly align with your goals.

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Getting to Know Lisbon

Lisbon, gracefully perched on the Iberian Peninsula’s western edge, is more than just the country’s capital. It’s a vibrant metropolis steeped in history and culture. This dynamic blend attracts visitors and investors alike for various reasons. These include:

Geography and Climate

Bordered by the Atlantic Ocean, Lisbon promises mild, rainy winters and warm, sunny summers. Then there’s the Tagus River that snakes its way through the city, offering breathtaking waterfront vistas and contributing to the city’s maritime charm.

Economy and Infrastructure

This city serves as Portugal’s economic powerhouse. With a strong focus on tourism, tech, and commerce, Lisbon boasts robust infrastructure, including well-connected roads, an efficient public transport system, and the busiest airport in the country.

Culture and Lifestyle

When it comes to culture and lifestyle, this Portuguese city offers a mix of traditional Fado music-filled nights, historic neighborhoods like Alfama and Bairro Alto, and a modern, cosmopolitan vibe in areas like Parque das Nações. Furthermore, the city’s rich cultural tapestry is evident in its festivals, food, and friendly locals.

Education and Innovation

The city is home to renowned universities and institutions, attracting students and professionals from across the globe. And Lisbon’s tech scene is burgeoning, too, with various startups and tech conferences, making it an emerging European Silicon Valley.

What’s Fueling Investor Interest in Portugal?

Navigating the intricate realm of real estate investment demands a meticulous evaluation of various elements. And with this, understanding the driving forces behind these decisions provides a clearer perspective on property prospects.

For starters, Portugal’s economic narrative presents a compelling story. Despite encountering challenges, the nation showcases a remarkable combination of resilience and growth. This determination is underscored by advancements across multiple sectors and a positive outlook on public finances. According to the European Commission’s Economic Forecast, Portugal successfully reduced its deficit to a mere 0.4% of GDP in 2022.

Adding to its allure, Portugal ensures smooth trade routes through its borders and ports, facilitating seamless exchanges with fellow EU nations. Moreover, the nation’s political foundation is stable and open. With a democratically-elected parliamentary system in place, there exists a favorable inclination towards foreign businesses and investments. This harmonious economic and regulatory environment, as emphasized by the International Trade Administration, unequivocally signals Portugal’s preparedness to welcome external contributions.

lisbon real estate

Here’s What to Know About Lisbon’s Real Estate Market 2023

For those with their sights set on Portugal for investment, retirement, or simply a place to call home, understanding the nuances of its property market is vital. This is especially true when exploring an area like Lisbon, a city whose real estate stature has grown impressively. In fact, the year 2021 was remarkable for Portugal’s residential market, reflecting the nation’s economic vitality. This optimism was fueled by favorable unemployment figures, which increased the appeal of the residential sector. Additionally, this growth is supported by impressive numbers: a trade of approximately 190,000 units and a sales volume approaching €30 billion.

It’s clear that Lisbon has carved a significant niche for itself. The city’s housing prices reached an unparalleled 306.77% of the country’s average. It’s also noteworthy that in the Property Index edition, no other city matched Lisbon’s staggering growth, which exceeded the national average by more than three times. Additional data from INE’s Housing Price Statistics highlighted a price growth of 3.4% towards the end of 2021. Leading this trend were regions such as the Algarve, Lisbon Metropolitan, and Porto Metropolitan Areas.

Renting in Lisbon

On the rental front, while new contracts saw a median price increase of 10.6%, the volume of these contracts slightly dipped by 3.3% year-on-year. Delving deeper into populous municipalities, Lisbon took the lead with a notable 22.4% hike in rental prices, trailed by Cascais, Oeiras, and Porto.

As for Lisbon’s real estate allure, it remains unyielding. Positioned as Europe’s third-most expensive city, pockets like Baixa, Chiado, and Avenida da Liberdade emerge as sought-after investment hotspots. In particular, the Santo António district boasted top-tier prices, closely followed by other prime areas such as Parque das Nações, Avenidas Novas, and Sao Vicente. In essence, those who are exploring Portugal’s real estate market will find Lisbon to be a promising beacon, guiding them to profitable investments.

Unpacking the Costs: A Look into Portuguese Real Estate Taxes & Charges

Now that you know what to expect from Lisbon and its housing market, it’s vital to remember that a wise investment requires clarity on all expenses involved. In Portugal, during Property Acquisition, one encounters the Property Transfer Tax (IMT), with rates fluctuating according to the property’s worth and the buyer’s status. Annually, the property’s value is taxed under the Annual Property Tax (IMI). The Stamp Duty (IS) is another fee applied to deeds and agreements.

Keep these factors in mind as well: Property Management Fees; Profits from Sales Tax; Mortgage-related Costs; Currency Exchange Implications; Property Cover Costs; Comprehensive Market Study; and Essential Checks. For a detailed view of Portuguese tax procedures, consult the official website of the Portuguese Tax Authority (AT).

lisbon real estate

Portugal’s Inviting Investment Avenues & The Esteemed Golden Visa

As you can see, Portugal is more than just beautiful scenery; it’s also a haven for global investors. So, if you’re a foreigner and want to learn how to invest in real estate in Lisbon 2023, these are your best options:

Golden Visa & Investment Initiatives

Portugal’s Golden Visa program offers residency to overseas investors who make investments of at least €500,000 in select endeavours (which real estate is prohibited from, as of 2023).

Either way, Golden Visa holders enjoy a variety of benefits, including residency rights, freedom to travel in the Schengen area, and comprehensive access to Portugal’s health and education system.

Non-Habitual Resident Initiative

Through the NHR, Portugal extends a welcome mat to global talent and investors, offering them appealing tax breaks while they enhance the country’s socio-economic fabric. This tax status provides benefits like global income exemptions and a standardized 20% tax on Portugal-sourced income.

Property Pursuits in Portugal for Non-locals: The Essentials

So, now that you are interested in investing in real estate in Lisbon 2023, what should you do first? As a foreign buyer, the first thing you need to do is get a Portuguese Tax Identification Number (NIF) from a local tax office, which is required for all property transactions. The good news is that Portugal welcomes non-EU residents with programs that allow them to obtain quick residency through strategic investments.

Taking the Plunge: Is Investing in Portuguese Property a Smart Choice?

Ultimately, Portugal shines with a vibrant rental ecosystem, consistent returns, and a robust property market, all underpinned by friendly tax structures. Toss in the unmatched lifestyle, potential rental profits, and growth outlook, and Portugal emerges as an irresistible magnet for real estate investors. Don’t miss out on the chance to explore the abundant opportunities that await in this captivating market!

Frederik Pohl
Frederik Pohl, CEO
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