Recently, the sun has been shining brightly on Portugal’s property market. Since prices started to recover in 2014 from the housing market collapse, the country has experienced a slow but steady rise.
Prices rose by almost 5% year over year to November 2017, with an average price of $1,373 per square meter, according to the Global Property Guide. In the country’s capital city of Lisbon, prices were also up around 5%, to an average of $1,664 per square meter.
“The market is growing mainly because of economic growth and consumer confidence,” said Miguel Poisson, managing director, Portugal Sotheby’s International Realty. “Real estate is a safe and high return sector,” he added.
The country’s homes are popular with buyers from all over the world, according to Mr. Poisson. The reason, many say, is a combination of residency permits being given to non-European buyers, tax friendliness and limited stock—Portugal never built as much during the boom—that helped create the current conditions. And this is fueled by a tourism boom, with people all over the world flocking to Portugal on vacation.
The many conditions that lure tourists are in fact the same ones that make buying in Portugal appealing to foreigners.
The country enjoys “perfect weather, amazing culture, art, fado [music native to the country, usually played by guitar], football, theater, charming places and centuries of history,” said Hugo Correia, of Luximos, a branch of Christie’s International Real Estate.
For foodies, there’s “quality and variety of wine” and fine gastronomy. Not to mention ideal conditions for relaxing: Mr. Correia mentioned 850 kilometers of coastline, and some of the best golf in the world.
And despite the growing market, it is still affordable to buy property there. “Compared to the rest of Europe, Portugal remains an excellent country to invest and live,” Mr. Correia said. “Prices are very competitive, compared to the rest of Europe, even for a country in constant growth.”
Golden Visa and Tax Breaks Help Buyers Along
One of the benefits of buying property in Portugal is obtaining the Golden Visa, according to Mr. Correia. It allows foreign investors from non-E.U. countries to obtain a fully valid residency permit in Portugal with a purchase of a property above €500,000.
With this visa, a homeowner does not need a separate visa to enter Portugal or travel in Europe and may live and work in Portugal, even if their residency is with another country.
Residency is extended to family members. Permanent residency is granted after five years and citizenship after six.
Non-native residents may also find the taxes favorable. For 10 years, personal income tax is capped at a fixed rate of 20%, with no double taxation for pension incomes or for employment income abroad.