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By LiveAlgarve on 17th January 2025 - 3-4 m. reading time
The Algarve continues to be one of Europe’s most attractive destinations for expats in 2025. Known for its reliable climate and welcoming lifestyle, it’s no surprise that many international buyers are seeking property in Lagos, Albufeira, and other popular areas. If you’re considering purchasing property in this sought-after region, here are five key things every expat needs to know.
1. Legal and Financial Basics
To buy property in Portugal, expats must meet certain legal and administrative requirements:
- Tax Identification Number (NIF): This is essential for any financial transaction in Portugal and can be obtained at the local tax office or via a representative.
- Portuguese Bank Account: Opening a local bank account simplifies payments for taxes, utilities, and other costs. However, this is not mandatory.
- Fiscal Representative: Non-EU buyers must appoint a fiscal representative to handle tax matters.
Engaging a legal advisor ensures all these steps are completed correctly and helps you avoid unnecessary delays or errors during the buying process.
2. Partner with Trusted Professionals
Buying property abroad can be complex, so it’s crucial to have the right experts on your side:
- Licensed Real Estate Agents: Only work with agents accredited with an AMI license, which guarantees they are legally authorised to operate in Portugal. At LiveAlgarve Realty, we proudly display our AMI license as a mark of trust and professionalism.
- Legal Advisors: Your lawyer will verify property ownership, confirm there are no outstanding debts and ensure compliance with Portuguese property laws. This is especially important when dealing with rural or older properties.
With trusted professionals guiding you, the process becomes much more transparent and stress-free.
3. The Property Buying Process
Purchasing property in Portugal involves a series of straightforward steps:
- Promissory Contract (CPCV): This legally binding agreement outlines the terms of the sale, including the price, deposit (usually 10–20%), and completion date.
- Final Deed (Escritura): Ownership is officially transferred at the notary’s office when the final deed is signed. All taxes and fees must be paid before this step
4. Budget for Taxes and Fees
Understanding the full cost of property ownership is vital when planning your purchase. Key costs include:
- Property Transfer Tax (IMT):
- Ranges from 1% to 8%, depending on the property’s value and its intended use (primary residence or holiday home).
- For example, a primary residence valued at €300,000 would incur approximately €8,836 in IMT.
- Stamp Duty (Imposto de Selo): A flat rate of 0.8% of the purchase price.
- Annual Municipal Property Tax (IMI): Rates vary between 0.3% and 0.45%, depending on the municipality.
- Example: A property with a tax value of €200,000 in Lagos would incur an annual IMI of €600 at a 0.3% rate.
- Notary and Registration Fees: Typically, around 1–2% of the property price.
5. The Algarve Real Estate Market in 2025
The Algarve remains a top choice for expats, offering diverse property options to suit a range of budgets and preferences:
- Property Prices:
- In Lagos, apartments average €4,577 per square meter, while houses average €5,088 per square meter (Properstar).
When selecting a property, consider these factors:
- Lifestyle: Do you want to live near beaches, golf courses, or quieter inland villages?
- Investment Potential: Areas like Lagos, Albufeira, and Vilamoura are in high demand, making them ideal for short-term rental returns.
- Accessibility: Properties close to international schools, airports or healthcare facilities may be better suited for families or frequent travellers.
Conclusion
Buying property in the Algarve in 2025 is a rewarding investment, either as a relocation from another country or a profitable rental property. By understanding the legal requirements, working with trusted professionals and budgeting for taxes and fees, you’ll be well-prepared to make the move.
For any questions, get in touch with our team and browse through a selection of the best properties in Lagos, Carvoeiro, and beyond.
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