Guide for Canadians Buying Real Estate Property in Portugal
Interested in a Portugal property purchase?
The European country has amazing food, warm people, and a rich history. But, most importantly, there are no restrictions on Canadians looking to buy property.
Portugal offers an attractive and cost-effective proposition for Canadians looking to buy European property.
However, if you have chosen Portugal as the best European country for your investment property or vacation home, you still need to be smart with your money. That means familiarizing yourself with the real estate hotspots in Portugal and looking for the best exchange rates for the Canadian Dollar to the Euro, plus more.
This article provides essential details about buying a property in Portugal as a Canadian to help you make an informed and cost-effective decision.
Top reasons to invest in Portugal property
Portugal is a beautiful country with welcoming people, great weather, breathtaking views at every corner, and lots of history. It's a fantastic place to holiday, and the good news is it's also a haven for Canadian property buyers. Here's why.
Getting a mortgage is fairly easy. Portuguese banks offer mortgages to both residents and non-residents. Plus, the requirements are straightforward, with a reasonable down payment and incredibly low interest rates.
There are many English speakers. English is the second most widely spoken language in Portugal. That means you can interact easily with the natives and feel more at home.
Affordable housing and low cost of living. The country has some of the highest home ownership rates¹ (above 70%) in Europe. Since Portugal has no restrictions, you can circumvent Canada's current housing bubble and save money. Portugal is also the one of the most affordable² places to live in Europe.
The real estate market is growing. Portugal's real estate market³ is flourishing, especially in Lisbon, Porto, and the Algarve. If you invest now, you can expect to build more equity and earn better yields in the future.
Property ownership can come with residency. Buying Portuguese property comes as a package deal with a Golden Visa⁴ if you purchase real estate property worth a certain value. The Golden Visa allows you to live, study, work, apply for a family reunion, and travel freely in the Schengen area. It's also a pathway to citizenship after five years.
Essential steps to buying property in Portugal
There are quite a few steps to go through before you can close your Portugal property deal.
1. Know what you want
First, figure out your must-haves, such as the type of property you want, whether that's a Moradia T3 or T4, Casa Geminanda, Quinta, or a condomínion. Keep in mind the average price per square meter in Portugal is roughly 3,000 Euros⁵.
2. Get a NIF number
The Número de Identificação Fiscal is a unique number issued by Portuguese tax authorities. Obtaining a NIF number is a legal requirement whether you're buying/renting real estate in the country or opening a Portuguese bank account.
3. Explore Portugal in person
It's always wise to visit Portugal and get the "lay of the land" so you don't fly blind into a regrettable property deal. Also, if you're financing, it's better to get pre-approval before finding the property since this makes it easier to budget.
4. Work with a reliable team of local professionals
For instance, you need to find a local real estate agent, advogado (qualified lawyer) or solicitador (conveyancing specialist). It's also a legal requirement to use a notary for buying property in Portugal.
5. Make your payment
Once the seller agrees to your offer, you can finalize your mortgage and make the payment. Besides admin costs and legal fees, you're also liable for tax fees, including the Municipal Property Tax, Property Purchase Tax (IMT), and Tax on Stamps.
6. Sign the deed of purchase and sale
After signing the Escritura Publica de Compra e Venda, your property is registered in your name.
Why is the exchange rate important?
If you're sending money from Canada to a Portuguese bank account, it's important to ask yourself whether your money will arrive in one piece. This is because the official currency of Portugal is the Euro, so your money transfer is influenced by how favorable the EUR/CAD exchange rate is.
Property purchases involve large amounts, so paying attention to the exchange rate is essential. The difference between a poor and competitive exchange rate is often as high as tens of thousands of dollars, which is nothing to brush off.
How to get the best exchange rate when sending money
When making international transfers, it may seem like the battle of the banks vs. specialist FX services. However, using a specialist service is the obvious option for those prioritizing cost savings.
For comparison, MTFX offers exchange rates 3-5% lower, allowing you to save 25,000 when you send 500,000.
If you want to see how favorable MTFX's exchange rate is, use the live rate calculator to initiate your transfer with more confidence.
MTFX's expert service also includes:
- A secure online platform that's always available
- Personalized guidance from currency market specialist
- Handy FX tools to streamline your payments
- Automated technologies to facilitate regular online payments
Pay online and skip the bank
Need to send money to Portugal from Canada? There are better ways to initiate the transfer than visiting the bank. Sending an international transfer online is not only cheaper than in a branch, but the convenience is unmatched when you're using your MTFX online account.
You have access to a 24/7 online platform from any location. It only takes a few minutes to set up your account, plus a few clicks to send your money on its way.
Maximize the value of your payment with MTFX exchange rates
If you're purchasing property in Portugal and have Canadian dollars in hand, you'll need a secure, cost-effective, and convenient way to send your currency exchange payments.
This is where MTFX excels. MTFX has assisted numerous individuals in buying their dream homes abroad and can further ensure that you don't overspend on your property purchase.
Register an account with MTFX now to simplify your overseas property purchase.
Buy property in Portugal – FAQs
Can I get mortgage financing in Portugal as a Canadian?
As a Canadian and a non-resident, you can get a loan up to 65-75% of the property's value. Amortizations as long as 25 years or more are available. The top Portuguese banks to apply with include Caixa Geral de Depositos, Activo Bank, Banco Santander Totta and Banco CTT.
What are the best places to purchase property in Portugal?
Lisbon is the capital and the largest city, also a vibrant coastal city famous for its sunny weather, buzzing nightlife and colorful buildings.
Porto is the second-largest city in Portugal, with stunning attractions, a delightful history and delicious cuisines.
Cascais is a picturesque Portuguese fishing town and one of the most beautiful seaside towns in the world.
Algarve is a Portuguese coastline known for its enchanting beaches and magnificent golf resorts.
Braga is one of the cheapest⁶, oldest cities to live in Portugal with a rich history.
What are some tips for buying property in Portugal?
- You can't qualify for a Golden Visa if you get a mortgage from a Portuguese bank. The Golden Visa may also not be available if you purchase real estate in Lisbon, Porto, and coastal towns.
- Property taxes⁷ can be as low as 0.3% to 0.45%, but keep in mind, rental taxes are significantly higher at 28%.
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