In the last decade, Portugal has become an important destination for culture and investment in Southern Europe. While a lot of attention is focused on the country's capital, Lisbon, Porto has emerged as a dynamic and highly promising alternative. A lot of expats pick Porto as the city to settle in. Housing prices in Porto, though experiencing a steady rise, are still substantially lower than in Lisbon, with the country's second city providing a highly developed infrastructure, a vibrant community and, basically, everything you need for an active modern lifestyle.
Investing in property in Porto
The housing market in Porto (and Portugal as a whole) is doing quite well for investors, with property prices consistently moving up over the last 15 years.
However, social unrest is rising due to the fact that people are no longer able to buy or rent in the cities where they work/study. In order to tackle this urgent issue, the local government is pushing new legislation to try to solve the housing crisis that is currently plaguing the country. As part of this new policy, it is no longer possible to enter the Gold Visa Scheme for buying 鈧�500,000 worth of property in Porto. This program grants participants the right to live in the country legally for a period of 10 years, after which they can apply for citizenship. There are still other ways to partake in the scheme, but buying property in the capital is no longer one of them. Furthermore, this new legislation to tackle speculation and high prices has given city councils full autonomy to suspend the issuance of permissions to open new Airbnbs. As of now, it is not possible to open an Airbnb in Porto, so you won't be able to rent your property to tourists (legally) if you're away from the city.
However, in what is arguably the most controversial proposition on the package, the government is also considering coercive leasing for properties that have been empty for at least one year, with no proof of utility payments. Although its application is still shrouded in mystery, technically, owners can be served a notice stating that their property will be forcibly rented to a local family (for a sum deemed adequate by local authorities) if the house or apartment has been vacant for a long time.
However, if your sole interest as an investor is to flip houses fast, you'll be happy to hear that real estate prices in Porto continue to rise, with property prices in the metropolitan area going up by more than 10% over the past year alone. On the downside, transaction costs associated with purchasing property in Porto are quite high. You should expect to pay the IMT (tax over property transactions), stamp duty, the cost of the house deed,聽and, if you need to rely on a loan, the respective banking fees (stamp duty). As an example, if you want to buy an apartment for 250,000鈧� and do not need financing, expect to pay 7,955鈧� for IMT, plus 2,000鈧� of stamp duty (0.8% of the total sale) and around 1,000鈧�/1,500鈧� for the house deed. If you need a bank loan for 80% of the purchase value (the highest cap in Portugal), then you should add 鈧�1,200 (0.6% stamp duty for a 鈧�200,000 loan) to the tally.
To try to lower the weight of taxes on homebuyers, the government approved a new legislative package in 2024 seeking to support people under 35 to buy their first homes. As many people struggled to leave their parent's nest due to house prices, legal residents (foreigners included) between 18 and 35 can now rely on the State to finance up to 10% of the property price. Before, buyers needed to have those 10% as a down payment, as banking institutions are only authorized to lend up to 90% of the property value. Furthermore, this new legislation exempts new buyers from most taxes related to the process of buying a home, such as the IMT (tax over property transactions) and its respective stamp duty. It's important to note this exemption only applies to people buying their first home and whose annual income does not surpass 鈧�83,696. Also, there is a 鈧�450,000 cap on the property price so that buyers can take full advantage of the program.
If it's the other way around and you're trying to sell property in Porto, you should expect to pay real estate agent fees (usually 5% of the sale value), value-added tax over those fees (23% VAT), and other related legal fees. Plus, if you don't invest your capital gains into another property, you will have to pay income tax (IRS) on over 50% of the amount you made. For example, if you had initially bought your property for 鈧�200,000 and are now selling it for 鈧�250,000, you've had a capital gain of 鈧�50,000. However, you can deduct repairs, maintenance expenses and real estate agent fees. For simplification purposes, let's assume you never had any other deductible expenses besides the agent fees (5% of 250,000鈧� = 12,500鈧�). This sum will be deducted from the initial 鈧�50,000, bringing your capital gains down to 鈧�37,500. As mentioned above, the IRS will only be applicable to 50% of your gains, which means 鈧�18,750 will be subjected to tax. If you are a legal resident and pay your taxes in Portugal, the amount you will effectively pay will depend on your other sources of income and annual deductions, with current tax brackets ranging between 14.5% and 48% (for higher-income households/individuals).
However, if you're living in another EU country, an additional 5% will be added to your bracket as a 鈥渟olidarity tax鈥�. Finally, if you live and pay taxes outside the EU, then you will have to pay a 28% flat tax on 100% of your capital gains: in this case, you'd pay 鈧�10,500 (37,500 * 28%) just in taxes for selling your property.
The process of buying property in Porto
The process of buying property in Porto can be anything but simple for non-natives. You are going to need a lot of paperwork, and it is easy to make a mistake and have to start the process all over again. If you are considering buying a property in the city's historic center, then you will definitely need a Portuguese lawyer, as houses in this area usually require specific licensing and permits, especially if you're planning on doing renovations.
Property prices in Porto
Houses in Porto have seen their prices and investment value skyrocket in the past few years. Some experts are actually talking about the possibility of a housing bubble that could possibly burst into a terrible crisis for the entire country. Be that as it may, demand keeps on rising, and so do prices. If we look at the numbers since January 2015, the average square meter price in the metropolitan area has gone up from 994鈧� to 2,926鈧�. In the city center, in neighborhoods like Cedofeita, Santo Ildefonso, 厂茅 and S茫o Nicolau, property prices have reached 4,550鈧� per square meter (June 2025 figures), which translates to a 355% increase. 鈥攐ne of the country's most important real estate portals鈥攕tates that your (in Portuguese).
Needless to say, location is critical when talking about prices! In Ramalde or Paranhos, for example, which are located right outside the city center, the average square meter price stands at around 鈧�3,100, while the areas where the middle class lives, such as Matosinhos (excluding the seaside area) or Maia, can still offer a good bargain for budget-savvy expats (鈧�2,300 per square meter, depending on the neighborhood).
A little further away from the downtown area, on the opposite side of the Douro River, Vila Nova de Gaia is basically a completely different city composed of dozens of different municipalities. Today, it stands as one of the country's finest examples of a dormitory town, with most people working in Porto and commuting back after work. Because of that, property prices have always been lower on this side of the river, although VNG doesn't offer the same excitement as Porto when it comes to infrastructure, bars, restaurants, cafes and things to do. Even so, prices are no longer as low as they used to be, with the current average square meter in Gaia's most popular towns, such as Mafamude, Canidelo or S茫o Pedro da Afurada, currently ranging between 鈧�2,600 and 鈧�3,200.
Finally, if you're running on a pretty tight budget and don't mind living far away from the city center, you may look up your options in Gondomar, Rio Tinto or Valongo (2,000鈧� per square meter). However, there's not much going on in these districts, and aside from certain areas of Gondomar, which are actually served by the metro, having to rely heavily on public transportation to get to the city center will quickly drain your energy.
Where to look for housing in Porto
If you are new to the area, it is definitely better to arrange your property purchase via a real estate agency.
Real estate agents in Portugal need to be government-registered and have a license number issued by the Association of Real Estate Agents (Associa莽茫o de Mediadores Imobili谩rios). To check if the agent you are planning to work with is officially registered, you can contact the .
You should also be aware that real estate agents in Portugal work in the interest of the seller and receive their commission from the seller as well. The good news here is that you won't have to pay a commission when buying a home. However, to make sure someone is looking out for your interests as well, it is best to get independent advice before signing any contracts.
There are countless real estate agencies and websites that can support expats when finding their new home in Porto: , and being a few of them. Facebook Marketplace is also a good place to find independent sellers, as long as you're especially attentive.
Most real estate agencies will have staff who speak English and can assist you throughout the buying process as well.
We do our best to provide accurate and up to date information. However, if you have noticed any inaccuracies in this article, please let us know in the comments section below.
