If buying real estate in Portugal is on your bucket list, there are more reasons than one why it might be a wise investment. Having your own luxury holiday spot is certainly one advantage. You can have an escape for the family without being cramped in a hotel room. As an investment decision, there are other perks buyers often don’t think of first.
Is Buying Property in Portugal a Good Investment?
Buying a vacation home can certainly improve your quality of life. It is a place to relax, have fun, and create lifetime memories with family and friends. You don’t have to deal with booking accommodations and deciding when and where to go. Aside from your home’s tangible uses, here are some other benefits of a Portugal property investment:
- Rental Income: You can use the property as a luxury apartment rental for travelers. A potentially lucrative income source, this is convenient and non-disruptive when you are not there, especially in times when money gets tight. Plus, you can easily list your property on VRBO, Airbnb, or other rental property websites.
- Taxes: Owning a vacation rental home is essentially running a business. You, therefore, can deduct maintenance and repair costs, energy performance upgrades, mortgage interest, property management fees, and marketing expenses in your tax return.
- Appreciation: As real estate values rise with appreciation, so can the financial benefits of your property. Increases in equity can help boost your investment. Buying vacation rental property can be a great long-term investment strategy, especially if you need an equity line of credit or choose to sell your home.
Then again, you may never choose to sell it and end up using your vacation retreat as a retirement home. If you buy the home earlier in life, you’re comfortable with the location, and you pay off the mortgage, it can be a great addition to your retirement portfolio.
Cost of Buying Property in Portugal
It’s generally less expensive to buy property in Portugal than the rest of Europe. For non-native residents, personal income tax is capped at a fixed rate of 20% for 10 years.1 However, closing costs must be factored in, as well as structural survey, utility, insurance, and renovation and repair costs.
How Long Does It Take to Buy a House in Portugal?
Buying property in Portugal involves many of the same steps as it does in the U.S. Finding the right home, getting pre-approved for a mortgage, working with a real estate agent, and navigating the offer and closing process are all important. Locating the best place to buy property in Portugal is the most crucial step, since you’re making a large investment you’ll have for many years.
At Living Portugal Property, we are familiar with the Portugal real estate market and can assist you in the buying process, as well as inform you of Golden Visa tax exemptions. For information or help, contact us today at +351 92 777 1776.