If you’re in search of affordable real estate options in Lisbon, you’ve come to the right place. In this article, we’ll explore some of the cheapest areas to buy a house in Lisbon, offering insights into the areas that provide excellent value for your investment. Whether you’re seeking downtown, city center, or the outskirts, the metropolitan area of Lisbon has plenty to offer within your budget. Let’s delve into the top areas for budget-friendly property purchases in Lisbon.
Is real estate in Portugal a good investment?
Yes, real estate in Portugal can be a good investment for several reasons:
Stable Market: Portugal has a stable real estate market, with consistent growth in property values over the years.
Affordable Prices: Compared to other European countries, property prices in Portugal are relatively affordable, especially in regions outside major cities like Lisbon and Porto.
Rental Income Potential: Portugal’s tourism industry is thriving, making short-term rentals a lucrative option for property owners, especially in popular tourist destinations like the Algarve.
Quality of Life: Portugal offers a high quality of life with beautiful landscapes, a mild climate, and a welcoming culture, which attracts both tourists and expatriates, boosting demand for rental properties.
Infrastructure Development: The Portuguese government has been investing in infrastructure projects, such as transportation and urban development, which can increase property values in certain areas.
The cheapest places to buy house in Lisbon
When searching for the cheapest places to buy a house in Lisbon, it’s essential to look beyond the city center and explore the wider metropolitan area, including the south bay of Lisbon, where prices can be significantly lower. According to data from March 2024, purchasing a house in the city center averages around €5560 per square meter, with prices ranging from €3701 in Marvila Parish to €8619 in Chiado, a sought-after area for foreign investors.
In contrast, properties in the remaining metropolitan area of Lisbon can be up to 60% cheaper than those in the city center. This presents an attractive option for buyers who don’t require immediate city center living and prefer more affordable prices within close proximity to Lisbon’s amenities.
The cheapest places to buy house in Lisbon: City Center
The two cheapest parishes to buy a house in Lisbon city center are Marvila, priced at €3701 per square meter, and Olivais, at €3942 per square meter. However, they offer distinct advantages and characteristics.
Marvila, situated along the riverfront, is undergoing extensive redevelopment. While centrally located with metro connections, it lacks amenities for daily living due to its former industrial nature, particularly as a former area for ship containers.
On the other hand, Olivais is a residential area dating back to the 1970s, characterized by its mix of residential buildings and small houses in the Encarnação neighborhood. Despite its excellent connectivity to the city center, the area predominantly features older buildings, with limited redevelopment efforts apart from some new developments around commercial areas.
The cheapest places to buy house in Lisbon: Outskirts
Housing prices in Lisbon’s outskirts are, on average, 50% cheaper than those in the city center. The most affordable places to buy a house in the outskirts of Lisbon, yet still within the metropolitan area, are Alenquer at €1402 per square meter and Vila Franca de Xira at €2071 per square meter. Both areas are situated close to each other in the northern part of Lisbon.
Alenquer is known for its rural charm, offering a more tranquil setting compared to Vila Franca de Xira. Despite their differences, both locations are approximately a 30-minute drive from Lisbon, making them accessible for commuters seeking a quieter lifestyle outside the city.
The cheapest places to buy house in Lisbon: South Bay
The south bay area of Lisbon encompasses regions on the opposite side of the Tejo River, renowned for their proximity to Lisbon’s most sought-after beaches. Access to the city center is facilitated by two main bridges: the “25 de Abril” and the “Vasco da Gama,” both experiencing heavy traffic during rush hours.
In certain locations, housing prices can be up to 60% lower than those in the city center. The most affordable place to buy a house in the south bay area is Moita, with an average price of €1653 per square meter.
What you need to buy house in Portugal
To buy a house in Portugal as a foreigner, there are several requirements and steps to consider. Here’s what you need:
Tax Identification Number (NIF)
Obtain a Portuguese tax identification number (NIF) from the Portuguese tax office (Finanças). This is essential for property transactions and tax purposes.
Portuguese Bank Account
Open a Portuguese bank account to facilitate the transfer of funds for the property purchase, payment of taxes and fees, and receipt of rental income if applicable.
Legal Representation
Engage a Portuguese lawyer specializing in real estate transactions to provide legal guidance and ensure all documentation is in order. They will help navigate the legal aspects of the purchase and protect your interests.
Costs of Buying Property in Portugal
Property Transfer Tax (IMT): IMT tax is based on the purchase price of the property and can range from 0% to 8% for residential properties. The calculation of IMT is influenced by three main criteria: a) whether the property is urban or rural, b) its location (mainland or islands), and c) whether it will serve as a primary residence or secondary home. An IMT tax calculator is available to assist with calculations.
Stamp Duty: Stamp duty is levied on all documents and arrangements related to real estate transactions, including deeds, contracts, and mortgages. This tax is calculated based on the purchase price of the property and typically amounts to 0.8% for residential properties.
Legal Fees: It’s crucial to engage a lawyer to review the purchase contract and ensure compliance with all legal requirements. Legal fees typically range from 1% to 2% of the purchase price.
Notary Fees: Notary fees cover the services of a notary public who verifies the legality of the transaction. These fees can range from 0.3% to 0.5% of the purchase price.
Registration Fees: Charged for registering the property transfer with the Land Registry, registration fees can range from 0.05% to 0.25% of the purchase price.
Why work with us?
Local Expertise
Also we know Portugal. Due to our extensive local knowledge, also we believe that concentrating our services in a single country destination is the best way to give you the most thorough and useful information.
Holistic Approach
We offer a streamlined communication channel for the entire process, delivering a comprehensive service that encompasses all facets of your real estate investment journey. Also including property search, negotiation, legal matters, due diligence, and property management.
Independent Service
As an independent buying agent, we have the flexibility to collaborate with any agent, seller, promoter, or developer, providing you access to all available options in the real estate market. This enables us to objectively analyze every opportunity and find the right property for you at the best price, free from complications.
Simple Process
Technology plays a significant role in our company, allowing us to provide you detailed property market information and minimize our clients’ involvement in paperwork. Also as customers ourselves, we understand how to best serve your needs.
Frequently asked questions about the cheapest places to buy house in Lisbon
What are the cheapest areas to buy a house in Lisbon?
Some of the cheapest areas include Marvila, Olivais, and the outskirts of Lisbon such as Alenquer and Vila Franca de Xira.
Are there any neighborhoods in Lisbon known for affordable housing?
Yes, Marvila and Olivais are known for their relatively affordable housing options compared to other parts of Lisbon.
What factors contribute to the lower prices in certain areas of Lisbon?
Factors such as distance from the city center, level of development, and availability of amenities can influence housing prices in different areas of Lisbon.
How do property prices in the outskirts of Lisbon compare to those in the city center?
Property prices in the outskirts of Lisbon are lower than those in the city center up to 50%, making them attractive options for buyers on a budget.
Are there any up-and-coming neighborhoods in Lisbon with potential for investment?
Yes, some neighborhoods in Lisbon, such as Marvila, are undergoing redevelopment and gentrification, which could lead to potential appreciation in property values.
Are there any restrictions on foreigners buying property in Lisbon?
No, foreigners are generally allowed to buy property in Lisbon without restrictions. However, certain nationalities may require approval from the Portuguese authorities for specific types of properties, such as rural land.
What are the costs associated with buying property in Lisbon?
Costs may include property transfer tax (IMT), stamp duty, legal fees, notary fees, registration fees, and real estate agent commissions.
What areas of Lisbon are popular for property investment?
Popular areas for property investment in Lisbon include the city center (Baixa, Chiado, Alfama), historic neighborhoods (Lapa, Graça), and up-and-coming areas (Marvila, Beato).
How do property prices in Lisbon compare to other European cities?
Property prices in Lisbon are generally lower than in other major European cities such as London, Paris, and Amsterdam. However, prices have been increasing in recent years due to growing demand and limited supply.
What are the financing options available for buying property in Lisbon?
Financing options include mortgages from Portuguese banks, international banks, or private lenders. The maximum loan-to-value ratio and interest rates may vary depending on the lender and the borrower’s financial situation.
How can I find a reputable real estate agent or lawyer in Lisbon?
You can research online, ask for recommendations from friends or colleagues, or contact professional associations such as the Portuguese Association of Real Estate Agents (APEMIP) or the Portuguese Bar Association (Ordem dos Advogados).
