How Much Does It Cost to Buy a House in Portugal?

Buying a home in Portugal involves more than just the advertised purchase price. It requires factoring in various additional expenses, including acquisition taxes, legal and administrative fees, and ongoing ownership costs. Understanding these financial obligations is important for planning a property purchase.

Understanding Property Purchase Prices

The initial and most substantial financial consideration is the actual purchase price. This figure varies significantly based on geographic location, property type, and market conditions.

As of late 2024 and early 2025, the median house price across Portugal reached approximately €2,827 per square meter. However, this national average masks considerable regional disparities. The Lisbon Metropolitan Area frequently presents the highest prices, with asking prices around €3,799 to €4,935 per square meter. Similarly, the Algarve sees asking prices in the range of €3,513 to €4,385 per square meter. In contrast, regions such as the Centro and Alentejo offer more affordable options, with average prices ranging from approximately €1,448 to €1,591 per square meter. The specific property type, size, condition, and amenities also play a significant role in determining the final price.

Acquisition Taxes

Upon purchasing a property in Portugal, buyers are subject to mandatory acquisition taxes, representing a considerable portion of the upfront costs. The most significant of these is the Imposto Municipal sobre Transmissões Onerosas de Imóveis (IMT), or Municipal Property Transfer Tax. This tax is applied to the higher of the declared purchase price or the property’s taxable patrimonial value (VPT).

The IMT operates on a progressive rate structure, with the percentage increasing with property value and varying by intended use (primary residence versus secondary or rental). Rates range from 0% for lower-value primary residences up to 8% for higher-value properties. Flat rates apply to rural properties (5%) and commercial properties (6.5%). Properties valued over €1 million face a flat IMT rate of 7.5%.

In addition to the IMT, buyers must pay Imposto de Selo (Stamp Duty) at the time the public deed is signed. This tax is generally a fixed percentage of 0.8% applied to the higher of the declared purchase price or the VPT. If a mortgage is obtained, an additional Stamp Duty of 0.6% is levied on the loan amount.

Legal and Administrative Fees

Beyond the purchase price and acquisition taxes, several legal and administrative fees are incurred during the property acquisition process in Portugal. It is advisable for buyers to engage a lawyer for due diligence, contract review, and managing the purchase process. Lawyer fees typically range from 1% to 1.5% of the purchase price, plus 23% Value Added Tax (VAT), though some offer fixed fees between €2,000 and €5,000.

Notary fees, covering the public deed of purchase and sale, generally fall within €500 to €1,000. After the deed, the property must be registered at the Conservatória do Registo Predial (Land Registry Office), incurring additional land registry fees. Combined notary and land registry costs can total around €1,000 or 1.5% to 2% of the property value.

For buyers securing a mortgage, a property valuation is typically required, with fees usually ranging from €280 to €600. While real estate agent commissions are common, in Portugal, the seller traditionally pays these fees (3% to 8% of the sale price), so it is not a direct cost for the buyer.

Recurring Ownership Costs

Once a property is acquired in Portugal, owners face several ongoing expenses. The primary recurring cost is the Imposto Municipal sobre Imóveis (IMI), an annual municipal property tax levied by the local municipality where the property is situated.

This tax is calculated based on the property’s taxable patrimonial value (VPT), not its market value. Rates are set by each municipality within government-defined limits, typically ranging from 0.3% to 0.45% for urban properties and 0.8% for rural properties.

For properties located within a condominium, owners pay condominium fees (quotas de condomínio) on a monthly or quarterly basis. These fees cover maintenance of common areas, including gardens, swimming pools, elevators, and building repairs. They can range from €30 to €150 per month, or €1,000 to €2,500 annually, depending on amenities.

Utility costs are another regular expense, encompassing electricity, water, gas, and internet services, which can collectively amount to €60 to €150 per month, with internet services adding around €50 monthly.

Property insurance is a recurring cost, required if the property is financed with a mortgage. Basic fire insurance starts from €75 per year, while more comprehensive multi-risk policies range from €180 to €380 annually. Additionally, properties with a VPT exceeding €600,000 (individuals) or €1.2 million (married couples) are subject to an Adicional Imposto Municipal sobre Imóveis (AIMI), an additional municipal property tax with varying rates.