I don't know if it's because of my searches, or simply because it is the current “trend,” but almost every second ad that pops up in my social media feed includes an offer to buy an apartment in Portugal (whether in Lisbon, Porto or Madeira). It seems that Portugal has replaced, for investors, the Berlin of before COVID and the restrictions imposed on raising rents, and has become one of the most attractive countries in Europe for real estate investment.
According to the apartment price index of the website idealista, in January 2015 the average price per sq.m. in Portugal stood at 969 euros, while in January 2025 the price stood at 2,693 euros - an increase of about 178%!!! In Porto in 2024 prices rose by 7.1% and stood in January 2025 at 2,733 euros/sq.m., and in Lisbon they rose during 2024 by only 3.9% and stood in January 2025 at 4,104 euros/sq.m. These prices are relatively low compared with other European countries, such as France (the average price in Paris in January 2025 stood at 13,500-15,000 euros/sq.m.) and Germany (the average price in Berlin in January 2025 stood at 5,200-5,700 euros/sq.m.).
At the same time, it is important to remember that the Portuguese government has abolished the possibility of obtaining a “Golden Visa” following an investment in the country by purchasing real estate, which caused Portugal to lose first place (to Greece) in the ranking of the best golden visas by the consulting firm Henley & Partners, which may cool the enthusiasm of some investors.
When buying a property in Portugal you must pay transfer tax (IMT), the equivalent of the Israeli purchase tax (mas rechisha) familiar to us, a tax paid by the buyer when purchasing the property, at a rate ranging from 0% to 8% of the property's value, depending on the type of property, its location and its designated use (if the buyer decides to sell the property within three years of the purchase, he may receive a refund of the transfer tax). In addition, you must pay stamp tax (IS): a tax paid by the buyer and the seller when signing the purchase agreement, at a rate of 0.8% of the property's value. And municipal property tax (IMI), paid annually by the property owner, at a rate ranging from 0.3% to 0.5% of the property's value, depending on the local authority.
The rental yield stands at 6% - 8%, and tax must be paid at a rate of 28% of the income (there are options for reducing the tax, such as deducting property maintenance and management expenses).
On sale, tax is paid at a rate of 25% of the profit.
Portugal is an economically and socially stable country, part of the European Union, and offers Israelis who invest in it a high quality of life, with a pleasant climate, a welcoming population and a rich culture. The price level is comfortable and accessible to the Israeli investor. At the same time, it is important to remember that Portugal's economy depends to a large extent on tourism (according to Portugal's tourism ministry data, more than 30 million tourists entered the country in 2023), which may pose a risk to real estate investors.
It is important to emphasize that although many Israelis have been “chasing” the Portuguese passport in recent years, following the Portuguese government's decision to grant Portuguese citizenship to descendants of Jews expelled from Spain, which in fact serves as their entry ticket to Europe - unfortunately, when it comes to buying a property - Israelis holding a Portuguese passport are considered foreign investors for all purposes - there is no difference between an investor with an Israeli passport and an investor with a Portuguese passport. Banks in Portugal allow foreign investors to obtain a high mortgage of up to 75% of the property's value, and in certain cases the bank will grant a Portuguese passport holder a mortgage of even 90% of the apartment's value, and the interest rate is still relatively low.
So are you also looking to buy an apartment in Portugal? Don't forget to do thorough research, consult professionals and make informed decisions.
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית