Lisbon, with its unique charm and rising prominence among other Western European capitals, offers a compelling opportunity for property acquisition. However, navigating the real estate market in Lisbon can be a strategic move, whether you’re considering an investment or a place to call home.
In this comprehensive guide to buying property in Lisbon, we delve into the key aspects of the city’s real estate landscape. From identifying the best areas to buy property in Lisbon to understanding average prices in each area, we aim to equip you with valuable insights.
Here’s what you’ll find in this article:
- The best areas to buy property in Lisbon
- Expert tips for buying Lisbon real estate
- An overview of the property buying process in Lisbon and more!
Where is the best place to buy property in Lisbon, Portugal?
Over the past few years, buying property in Lisbon has become hugely popular with investors from all over the world, as well as those who move to the city to make it their home. As the capital city of Portugal, the municipal area is a major tourist hub for the country and also the rest of Europe. Additionally, the picturesque city has a buzzing pulse and a rich cultural history.
Many visitors to Lisbon are surprised by just how much each neighborhood varies in terms of individuality and character, even in a relatively small city. If you’re looking to purchase property in Lisbon, it helps to know more about the different neighborhoods and what each one has to offer. In this comprehensive guide, you’ll find all the information about the advantages of all the different areas.
Whatever your priorities are in your property search, whether you are aiming to find great investment opportunities, looking to buy a property that will provide rental income, or searching for the best neighborhood to live in, Lisbon offers a wide range of options. Because there is such a broad spectrum of properties available, you have a good chance of finding a property that suits your needs, from the artsy to chic or from budget to upscale and luxurious.
Taking all these factors into consideration, here are some of the best neighborhoods in the capital city.
What is it like to live in the areas of Baixa and Chiado?
These areas are generally referred to as downtown Lisbon. They are also among the go-to places for tourists. They are flanked on one side by Praça do Comércio and on the other side, Avenida da Liberdade, and Baixa and their surroundings are also very pedestrian friendly. If you’re looking to find somewhere that is conveniently located, but also has all the charm of the Portuguese capital’s historic streets, then this is the right spot to go for. It is also close to the main shopping district and big brand stores, with good transport links to the rest of the city.
Property prices in Baixa and Chiado
The freguesia (municipal district) of Santa Maria Maior is where major landmarks such as Lisbon’s city hall and Lisbon Cathedral are located. It encompasses the neighborhoods of Baixa and Chiado, and it is one of the most expensive places to buy property in Lisbon. Property costs, on average, €6,145per m².
Advantages of living in Baixa and Chiado
Property in Baixa and Chiado is very highly valued, and housing prices are rising fast. Rent prices in this area are also very high, making it an ideal location for investment.
Specialist advice If you are looking for expert advice on buying property in Lisbon, or buying property in Portugal, it can help to talk to a specialist. Our team at Global Citizen Solutions partners with reputable local real estate agents and can provide you with a personalized plan for purchasing a home in Portugal. Get in touch to find out more about your investment options.
What is it like to live in Bairro Alto?
This neighborhood comes to life after midnight. It is filled with boutique hotels, bars, restaurants, and graffitied houses. Homes in the streets uphill from the Praça de Luís de Camões can be very noisy, due to the number of bars there.
Some other quieter spots can be found around Santa Catarina and Bica, although the whole neighborhood is transformed into a massive street party for the whole of June.
Most of the streets in this neighborhood are very hilly and narrow, and parking is very limited. This does also mean that it has some of the best views in the city, with many apartments having incredible views over the River Tagus.
Property prices in Bairro Alto
Property in the Lisbon neighborhood of Bairro Alto (in the Misericórdia neighborhood) costs, on average, €6,825 per m².
Advantages of living in Bairro Alto
Much like Baixa and Chiado, property in Bairro Alto is very highly valued and highly sought after. It is particularly popular with foreign exchange students, as it is centrally located and also close to Lisbon’s best nightlife spots.
What is it like to live in Lapa and Santos?
Located to the west of the city center, the neighborhoods of Lapa and Santos are quieter and more residential than other areas in central Lisbon. This is a good spot to pick if you’re looking to live in a historical neighborhood, without all the noise and bustle of Baixa or Bairro Alto. In recent years, Santos has become an increasingly attractive area to live in among young, international professionals, making it one of the best neighborhoods in Lisbon.
At the same time, a number of cafes and restaurants have opened up in the area, making it an even more interesting place to live.
Property prices in Lapa and Santos
Property prices in Lapa and Santos (both in the Estrela neighborhood), cost on average, €5,670 per m².
Advantages of living in Lapa and Santos
This up-and-coming area has everything going for it; it is central, but also quiet, and it offers affordable prices in comparison to places such as Bairro Alto and Baixa.
What is it like to live in Avenidas Novas?
This is an upscale district with luxury apartments, wide avenues, and aristocratic art-nouveau palaces. It is also home to the beautiful Parque Eduardo the VII as well as being in close proximity to Avenida da Liberdade, one of the priciest avenues in the world. Avenida Novas is also well connected by public transportation and quite central. However, it can be chaotic during rush hours because of the number of cars transiting through the area.
Property prices in Avenidas Novas
Property costs, on average, €6,046 per m².
Advantages of living in Avenidas Novas
Buildings in the area of Avenidas Novas tend to be newer than other parts of the center, as well as more spacious.
For more information check out our property guide on Avenidas Novas here.
What is it like to live in Intendente and Mouraria?
This is one of the more central areas of Lisbon, which is gradually being gentrified. It is very multicultural, fast-paced, and hippy. There is also an abundance of renovation projects going on here. You will also find several Chinese and Indian supermarkets here if you are looking for some special cooking ingredients. It is also well-served by public transport.
Property prices in Intendente and Mouraria
Average prices in Intendente (in the Arroios neighborhood) are €4,766 per m², and property prices in Mouraria (in the Santa Maria Maior neighborhood) are €6,145 per m².
Advantages of living in Intendente and Mouraria
Intendente and Mouraria have been rapidly gentrified in recent years and are fast becoming one of the most attractive places in Lisbon to buy property. Despite being very close to the center, prices are still comparatively low.
What is it like to live in Campo de Ourique?
Located to the west of the city centre, Campo de Ourique is a pleasant and residential neighborhood that is very family orientated, with many family properties available. It is also a quiet area away from the bustling parts of the city with lovely squares and gardens. It is also well served by public transportation (mainly buses).
Property prices in Campo de Ourique
The average price of property in Campo de Ourique is €5,561 per m².
Advantages of living in Campo de Ourique
Campo de Ourique has everything you might want in a neighborhood, such as shops, transport, and green spaces, but it is a far calmer place to live those areas which are closer to the center.
What is it like to live in Alfama and Graça?
This is Lisbon’s oldest neighborhood. The most distinguishing characteristic of Alfama is its labyrinth narrow streets and alleyways. It is also home to the Castelo de São Jorge and Fado, traditional Portuguese folk music. This still retains some of the old charm that goes as far back as the 17th century, and even in some quarters, it is referred to as a village in a city. However, the Alfama neighborhood has seen development in recent years as property owners are remodeling their apartments to use them for holiday rentals.
Property prices in Alfama and Graça
Average prices for the Alfama (in the Santa Maria Maior neighborhood) are €6,145 per m² whereas property in Graça (in the São Vicente neighborhood) is slightly cheaper at €4,514 per m².
Advantages of living in Alfama and Graça
Graça and Alfama are the neighborhoods of Lisbon that feel the most authentically Portuguese. With the narrow winding streets and charming trams rattling up and down the hills, it feels almost like stepping back in time.
What is it like to live in Belém, Ajuda, and Restelo?
This is the last neighborhood within the Lisbon municipality. It is a very historic neighborhood filled with lots of museums and monuments, as well as large gardens and parks. Ajuda and Restelo are also in and around the Belém district. They are very tranquil and safe neighborhoods with houses, villas, and apartments that give good views of the Tagus River and the Ponte 25 de Abril.
Property prices in Belém, Ajuda and Restelo
In Ajuda the average price of property is €3,989 per m², while in Belém and Restelo it is a little bit more expensive at €5,395 per m².
Advantages of living in Belém, Ajuda and Restelo
The pleasant parks and quiet streets are just a few of the attractions in these historic neighborhoods.
What is it like to live in Parque das Nações?
This modern neighborhood is made up of modern high-rise residential buildings and hotels. This area is generally quiet except when there is a big conference or event in Lisbon. It is also easy to forget you live in Lisbon if you stay in this area because the feeling in these parts is very much different from neighborhoods close to the center.
Property prices in Parque das Nações
In Parque das Nações the average price of property is €5,965 per m².
Advantages of living in Parque das Nações
Though the prices are higher than many other neighborhoods in Lisbon, its architecture and housing are far more modern and futuristic than most other areas of the city.
Living on the outskirts of Lisbon vs the center
As the price of property in Lisbon becomes increasingly more expensive, many people are looking further away from the center to find better property deals. Cheaper areas of Lisbon include neighborhoods such as Beato, Marvila, Campolide, and Benfica.
The main advantage of living in areas further from the city center is that property is cheaper and usually bigger as well. The disadvantage is obviously in their distance from the center, which can be particularly noticeable when it comes to transport. They are also significantly quieter when it comes to restaurants and nightlife.
Up-and-coming areas of Lisbon
Some other up-and-coming areas to buy property in Lisbon include Marvila and Beato. These formerly industrial areas are now home to a number of creative spaces and industries, as well as micro-breweries, and can be a good choice when it comes to investing in property in Lisbon.
How to Invest in Real Estate in Lisbon, Portugal
Lisbon’s real estate market offers great opportunities for purchasing property.
It’s worth noting that the Portuguese Golden Visa program pathway to invest in residential properties is no longer viable as of 1 January 2022. Those looking to qualify for the Golden Visa should explore other avenues to make a qualifying foreign investment.
For those who are not looking to apply for the program, they will find a rich property market in Portugal’s sunny capital. In this section, we’ll run over how to invest in real estate in Lisbon.
When buying a property, you will need to follow the steps outlined below.
Step 1: Obtaining a Portuguese Tax Number
Whether you are a resident or a non-resident, to invest in the real estate market in Portugal, you will need to have a tax identification number, known as the NIF (Número de Identificação Fiscal). You will need to go to one of the government finances offices to obtain your NIF, providing proof of your current address and your passport information.
We recommend opening a Portuguese bank account when buying real estate in the country. Please note that you will also need to have a NIF number to open a bank account in Portugal.
Step 2: Finding a Property
There are several sources where you can find property listings, such as Idealista, Imovirtual, and Trovit. Alongside having a local real estate agent, we recommended also working with a Portuguese buyers agent who will be able to give you an overview of the housing market and even be able to source properties that are not available on property listing sites.
Whether you’re property hunting by yourself or working with real estate professionals, the first step is to set your budget and identify what kind of property you would like to purchase. Here are some suggestions on how best to proceed:
- If you want to capitalize on the bustling rental and Airbnb market and are looking to make excellent returns on your property investment, opt for an apartment in the center of town. The center of Lisbon is a major tourist destination, making it a great option for those searching for properties that will provide rental income.
- If you are looking to rent to young professionals, then choose an apartment in one of the quieter neighborhoods. They will likely be looking to rent longer-term.
- Visit the different neighborhoods in Lisbon to find out which part of the city you personally like.
- Once you have honed in your search, visit some properties to see firsthand the properties and if one stands out to you.
Step 3: Purchasing the Property
After you have found the perfect property and have finalized the price of the property with the owner, you will need to tick all the formalities that are required when it comes to the contract.
Purchasing foreign real estate can be a complex process, so we highly recommend working with an experienced lawyer who will be able to help you with the process. You will need to review the terms and conditions of the promissory contact with your lawyer, which will then be signed by yourself and the seller. At this point in time, you will need to pay a deposit. This is usually 10 percent of the cost. If you back out of the deal at this stage, then you will lose your deposit.
Step 4: Signing the Promissory Contract
When the promissory contract is ready and the term has been met, the buyer and the seller, alongside their lawyers, will meet in front of a notary and finalize the sale. At this stage, the buyer will pay the remaining amount that is owed on the property, and the seller will give the buyer the keys to the property.
Step 5: Paying Fees and Complying with Property Tax Obligations
In Portugal, the seller usually pays the agency fees, but the buyer also will have to pay additional costs and fulfill property tax obligations:
- IMT (Property Transfer Tax) is based on the purchase price value and your particular situation. For example, for a non-resident who a buying a second or third home, this can be as high as 10 percent of the purchase price.
- Stamp duty: A fixed rate of 0.8 percent of the purchase price of the property.
- Notary and land registration fees: Usually between 0.2 percent and 1.2 percent of the value of the property.
- Wealth tax: For properties with a taxable value of more than €600,000. The wealth tax rate is tiered based on the property’s value:
0.4 percent for properties held by companies, 0.7 percent for properties owned by individuals, and 1 percent for properties owned by individuals with a taxable value exceeding €1 million.
Frequently Asked Questions about Buying Property in Lisbon, Portugal
Is it expensive to buy a house in Lisbon?
The prices of property in Lisbon and apartments have climbed in the past three years. However, there are still some bargains to be gotten, away from the most expensive areas, with the prices of property cheaper in up-and-coming areas such as Avenida, Baixa and Principe Real.
Is it expensive to rent a house in Lisbon?
Rent in Lisbon is a bit on the high side when compared to the salaries paid. The average rent in Lisbon for a one-bedroom apartment ranges between €800 to €1500. However, when this is compared to other major European cities, it is relatively cheaper.
Why choose Lisbon over other European cities?
Lisbon is an emblematic capital city with a rich history, buzzing nightlife, renaissance architecture, affordable cost of living with a high-quality life and also cosmopolitan.
Are there any international schools in Lisbon?
Is it better to buy or rent in Lisbon?
Depending on your circumstances, it can be better to buy property in Lisbon. Rent in Lisbon is relatively expensive in comparison to average salaries, and paying a Portuguese mortgage can be a logical choice.
It’s worth noting that banks in Portugal will typically be willing to lend at least 60 percent of the property value for a mortgage. Depending on the property type, whether you have residence status in Portugal, and your financial profile, some banks may be willing to lend a high proportion of the property value.
Since the real estate market in Lisbon is experiencing a period of stable growth, a real estate investment can be a good option.
What are the most popular areas to buy property in Lisbon?
The most popular areas to buy property in Lisbon are in the center, around Baixa, Avenida, Bairro Alto and Principe Real.
Is property in Lisbon expensive?
In comparison to other capital cities in Western Europe, property in Lisbon is comparatively inexpensive. The average price of property in Lisbon City is €5,139 per square meter.
Is it a good idea to invest in property in Lisbon?
Property in Lisbon has become increasingly popular with investors, leading to a new wave of investment into the city over the past few years due to a combination of different factors. The relatively low costs against high returns and stable growth in the real estate sector mean that now is a good time to invest in Lisbon property.
Is Lisbon property a good investment?
Yes, over the years, Lisbon has become very popular for real estate investment. Although real estate prices are increasing, if you’re interested in investing in a commercial property, or even commercial properties, you should be able to find relatively low-cost properties with strong returns and stable growth, representing an excellent financial investment.
Can foreigners buy property in Lisbon?
Yes, there are no restrictions on foreign property ownership in the Portuguese real estate market. However, if you are applying for the Portugal Golden Visa, residential real estate in Lisbon would not be a qualifying investment.
It is also important to note that you would have to pay capital gains tax if you were to sell your property.
The amount you would pay in capital gains tax would be dependent on how you own the property, whether the property is your primary residence, and your residence status.
Is real estate expensive in Lisbon?
Compared to many other Western European cities, properties in Lisbon are very affordable. However, prices have been increasing in recent years.
Where is the best place to live in Portugal?
Lisbon is a dynamic, cosmopolitan city to live in Portugal. Elsewhere, Porto is a good place for history lovers, while the Algarve remains a firm favorite with expats, given its excellent weather and beautiful beaches.
What is the current state of Lisbon's real estate market?
The Lisbon real estate market exhibits robust growth, characterized by significant price increases due to heightened demand from tourism and tech sectors. However, affordability concerns are mounting, prompting speculation on future trends.
While rising interest rates and potential economic slowdown could lead to price adjustments, the sustained supply-demand imbalance suggests continued market resilience.
Long-term projections remain uncertain, requiring close monitoring of economic and financial factors.
Is buying property in Lisbon a good investment?
Investing in property in Lisbon can be a lucrative venture for various reasons. The city’s real estate market has shown a consistent upward trajectory, making it an attractive option for investors. Lisbon’s unique blend of historic charm and modern amenities, coupled with its growing prominence among Western European capitals, contributes to sustained demand.
Where to buy cheap property in Lisbon?
If you are looking for more affordable property options in Lisbon, certain neighborhoods provide a cost-effective entry into the real estate market. Areas such as Marvila and Beato, located in the city’s eastern part, are gaining attention for their emerging urban development and relatively lower property prices compared to more central districts. Additionally, parts of Alcântara and Ajuda on the western side offer affordability without compromising accessibility.