6 November 2025

Why invest in Portugal in 2025?

Are you looking for a clear, stable and consistent real estate investment? In 2025, Portugal ticks many boxes: soothed market, solid rents in well-connected cities, and quality of life that attracts sustainably. The Portuguese economy remains solid, with a 1.8% growth forecast in 2025 according to the Bank of Portugal and a public debt falling to 88% of GDP.

In this guide you will discover reliable benchmarks and up-to-date practical advice, for a successful real estate purchase in Portugal – with a focus on the outskirts of Lisbon (Montijo), where the ratio of purchase price/ rental rents remains one of the most efficient in the country.

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Panorama of the Portuguese real estate market (2025)

The Portuguese real estate market has left the euphoric phase. It is becoming more selective, therefore healthier for the disciplined investor. The key is no longer to “buy everything everywhere”, but to choose the right good, in the right place, at the right price.

In 2025, real estate prices in Portugal rose by about 15% over one year, according to European data, an increase driven by the economic stability of the country and the still sustained foreign demand. Here are the major trends to remember:

Price: high in the center of Lisbon, more affordable on the outskirts and in several municipalities of the district of Setúbal (Montijo, Seixal, Alcochete). Porto remains intermediate.
Rents: supported by employment, higher education, expatriation and commuter mobility.
Profitability: the most readable gross profitability is often obtained outside the hypercenter, where the price/rent gap is optimized.
Rental request: solid on T2/T3 formats (2 to 3 rooms), suitable for active households.

Average real estate prices and profitability in Portugal in 2025

Zone	Average purchase price	Monthly rent type T2	Estimated gross profitability	Dominant rental profile	Main advantages
Lisbon (centre)	> 6 000 €	> 1 500 €	3,0 – 4,0 %	Executives, expatriates, high income	International influence, high liquidity at resale
Lisbon periphery (Montijo, Seixal, Alcochete)	2 400 – 2 700 €	950 – 1 200 €	4,5 – 5,8 %	Families, commuters	More affordable prices, new programs, quick access to Lisbon
Porto (intra-muros)	3 500 – 4 500 €	1 100 – 1 300 €	4,0 – 5,0 %	Students, young professionals	University and tertiary demand, neighborhoods in requalification (Bonfim, Campanhã)
Algarve (urban)	3 000 – 4 000 €	1 000 – 1 200 €	3,8 – 4,8 %	Seasonal residents, expatriates, retired	International attractiveness, climate, lifestyle image

Caption:
Prices per square meter correspond to new, recent or renovated goods, located in the most dynamic urban areas. For unrenovated old dwellings, the values can be 15 to 25% lower, depending on the condition and location. Gross rents and profitability are estimated on the basis of long-term rentals, excluding tourist furnished rentals.

The best regions and cities to invest in

The objective is simple: combine accessibility, profitability and market depth.

Lisbon (intra-muros)

In inner-city Lisbon, real estate investment takes on a patrimonial dimension. The capital offers excellent liquidity for resale, international influence and an exceptional diversity of jobs. In return, high entry prices compress profitability. This positioning is especially suitable for the patrimonial investor in search of stability and long-term valuation.

Periphery of Lisbon (south & east bank)

The outskirts of Lisbon, Montijo, Seixal, Alcochete, respond to a different logic: more affordable prices, new programs and fluid access to the capital.

Result: a better correlation between price and rent, thus a more visible profitability and controlled cash flow. It is the natural terrain for reasoned rental investment in Portugal, ideal for generating regular income.

Porto (metropolitan area)

Porto relies on a solid university and tertiary ecosystem, ensuring constant rental demand.

The districts in requalification, Bonfim, Campanhã, Lordelo do Ouro, offer a good compromise between yield and resale.

For those who aim for a balance between performance and liquidity, Porto remains a relevant choice on the Lisbon-Porto axis.

Algarve (urban)

The urban Algarve attracts for its lifestyle, its climate and its international notoriety. In return, the seasonality is stronger there, particularly for tourist accommodation. This territory appeals to the investor who is looking for a ‘lifestyle’ investment, combining seasonal profitability and long-term asset valuation.

To remember: Lisbon’s center embodies heritage value; the Lisbon periphery (Montijo/Seixal/Alcochete) delivers the best gross profitability on family residential; Porto offers a balance between yield and liquidity; the Algarve brings lifestyle and seasonal appeal, at the price of a finer management.

Zoom Montijo: a new market in full development

Montijo is now establishing itself as a solid alternative to Lisbon, driven by its accessibility, quality of life and the upscaling of its new residential programs. The ferry and the Vasco da Gama bridge make it possible to reach the capital in less than thirty minutes, which attracts more and more active people and families wishing to enjoy a more serene environment without leaving the Lisbon employment area. The real estate offer is distinguished by modern new residences, often designed according to the most recent energy standards (class A or higher). Bright apartments, terraces, private parking and green spaces: these programs meet the standards sought by Portuguese families and expatriates in search of comfortable and functional accommodation.

In terms of investment, Montijo combines two rare assets:

Note: the future Montijo airport project, still under study, strengthens the medium-term valorization prospects.

In summary, investing in Montijo means securing a new asset, efficient and sustainable, capable of generating a regular rental return while offering a long-term asset recovery, all within a balanced living environment, just a stone’s throw from Lisbon.

The steps to secure an investment in Portugal

Buying a property in Portugal requires rigor and anticipation. To preserve profitability and avoid unpleasant surprises, it is better to proceed step by step, with a clear method.

1. Define your strategy:

Commencez par préciser votre objectif : constitution de patrimoine à long terme ou génération de cash-flow immédiat. Privilégiez les formats T2 ou T3, très demandés sur le marché locatif portugais, et intégrez dans votre budget le prix d’achat, les frais annexes, l’ameublement et une réserve de trésorerie.

2. Obtain the NIF (Portuguese tax number):

It is an essential step for any real estate purchase. Without this number, no deed signature is possible.

3. Negotiate a banking pre-agreement:

Compare the French (fixed rates) and Portuguese offers (often variable but better suited to the local market). Portuguese banks generally require a higher contribution, and carefully check the financial soundness of the file.

4. Search and compare the goods:

Don’t limit yourself to visits. Check the quality of the building, the condition of the condominium and the actual amount of charges. Build your projections on actually practiced rents and recent comparable sales in order to anchor your profitability assumptions in the concrete.

5. Perform a full due diligence:

Have a local lawyer accompany you to check the cadastre, urban planning, mortgages, energy certificate and potential debts. This step is essential to eliminate the majority of legal risks.

6. Sign the CPCV (promise of sale contract):

This document sets the conditions of the transaction, the deposit (10 to 30%) and the suspensive clauses. The authentic deed then completes the sale and allows the official registration of the property.

7. Put the property for rent:

Choose the appropriate type of lease, carry out an inventory, set a security deposit and take out non-occupying owner insurance (PNO). Adjust the rent to the reality of the local market and plan a month of rental vacation every two to three years to make your simulations reliable.

By following this rigorous framework, you secure your transaction, anticipate costs and ensure the reliability of your rental income, while benefiting from a clear legal framework and a still buoyant market.

Taxation in Portugal 2025, the essential points to know

Taxation remains a pillar of real estate investment in Portugal. It evolves regularly and must be verified before any signature.

Rental income and income tax:

Rents received by non-residents are taxed in Portugal, according to the applicable regime. The deductibility of charges depends on your status (resident, non-resident, type of lease). It is advisable to integrate taxation from the business plan phase: better a conservative estimate of the net than an overly optimistic projection of the gross.

Golden Visa (update):

The residential real estate route is no longer accessible to obtain a residence permit. Investors seeking to achieve this objective must now consider other options, such as investment funds or innovation projects. For a rental investment in Portugal, the essential remains the quality of the asset and its net profitability after tax.

Usual Resident (RNH) — new executive:

The former tax regime, very advantageous for expatriates, is no longer open as it stands. It has been replaced by a more targeted system, with specific conditions. Foreign investors, particularly French ones, must therefore check their eligibility before planning a tax expatriation.

Corporation Tax:

The 2025 budget forecasts a decrease to 19%, a positive signal for companies and investors wishing to develop an activity in Portugal.

Quality of life & cost of living in Portugal: a real driver for demand

If Portugal attracts so many investors, it is because it combines profitability and quality of life—a rare duo in southern Europe. Behind the numbers and economic stability, the country also embodies a way of life that appeals to families, active people and expatriates.

Quality of life: the country enjoys a mild climate, an easily accessible coastline and perceived high security. The health system combines public and private provision, and many international schools welcome foreign families. Transport infrastructure facilitates mobility (Montijo ↔ Lisbon ferries, buses, fast routes). The presence of international communities and the practice of English facilitate integration.
Cost of living: more affordable than in France outside the hypercentre, with competitive rents, transport and services. The daily newspaper maintains an excellent quality/price ratio, especially in peripheral areas.

For the investor, these non-financial assets become an economic lever : they attract long-term workers and expatriates, reducing the risk of a rental vacancy.

Financing: the checklist for a successful rental investment in Portugal

Financing plays a central role: it can strengthen the performance of your rental purchase… or weaken it if the monthly payments are not well calibrated. In Portugal, where loans are often variable rate and the contribution required more important, the preparation upstream makes all the difference. The objective remains simple: that rents largely cover your credit charges, even in case of a rate increase.

Checklist financing Portugal:

Compare several offers — request at least two French banks (often competitive on fixed rates) and two Portuguese banks, which know the local market better but generally require a higher contribution.
Simulate the sensitivity of rates — test an increase of +0.5 to +1%. If your cash flow remains positive, the project is well dimensioned.
Evaluate the rent/monthly payment coverage — a ratio of 120 to 130% constitutes a healthy safety threshold for preserving profitability.
Plan a safety margin — keeping the equivalent of three to six months of charges (credit, maintenance, rental vacancy) allows you to absorb the vagaries of the market.

By applying this simple discipline, you secure your financing, protect your profitability and manage your project over the long term—with complete peace of mind.

Conclusion

In 2025, the Portuguese real estate market remains a safe bet for prepared investors. Fitch has also upgraded the country’s sovereign rating to A, welcoming its budgetary stability.

Success is based on four principles:

Buy at the right price: rely on realistic comparables.
Choose the right area: Lisbon periphery (Montijo) or Porto for solid profitability.
Anticipate real costs: integrate charges, taxes and vacancy from the business plan.
Manage funding with caution: aim for a rent/monthly payment ratio of 120–130%.

Portugal is no longer a land of ‘real estate coups’, but a market of coherence and discipline.

Well prepared, a residential purchase in Portugal — and notably in Montijo—can offer a stable income, a sustainable valuation and an envied living environment.

FAQ: Why invest in 2025

Why invest in Portugal in 2025?

Because the Portuguese real estate market is more rational, that the quality of life attracts sustainably, and that the rental incomes remain solid in well-connected areas. The outskirts of Lisbon and Porto offer a good balance.

Which regions are the most attractive?

Lisbonne centre (valeur patrimoniale), périférie (Montijo/Seixal/Alcochete) pour larentabilité, Porto pour l'équilibre, Algarve si vous acceptez la saisonnalité.

Quelles demarches administrators?

NIF pre-agreement banking hunt & comparable due diligence (cadastre, urban planning, mortgages, energy certificate, copro) CPCV lease act/state of affairs. This is the safest framework.

How are rents taxed?

The rental income are taxed in Portugal according to your status (resident/non-resident). Add IMT to the purchase, annual IMI, stamp duty and fees. The net after tax should guide your decision.

Do the Golden Visa and RNH still exist?

The Golden Visa no longer goes through residential real estate. The historic (RNH) usual resident has been replaced by a targeted framework. Check your eligibility before structuring an expatriation.

What type of property to favor?

A recent T2/T3 , close to transport/schools, with parking. It is the most readable format for a rental investment in Portugal.

France or Portugal for the credit?

Compare. Sometimes France offers a competitive fixed rate; in Portugal, the local asset is better understood but the variable is more frequent. Stress-test always your monthly payment.

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