Question 1

Why are homes so expensive in Portugal?

Accepted Answer

Because for more than a decade Portugal built very few new homes while demand grew fast. Between 2000 and 2010 an average of 79,564 new homes were completed a year; between 2015 and 2025, 16,283. At the same time the population grew by 824,914 people between 2021 and 2025, almost all through immigration. Construction costs, tourism, short-term rentals, low interest rates until 2021 and foreign demand in some regions added to that imbalance. The Banco de Portugal finds that demand passes through more to prices where supply is more rigid.

Question 2

How much have house prices risen in Portugal?

Accepted Answer

House prices rose 17.6% in 2025, the largest annual rise in the INE series, and 16.5% in Q2 2026 compared with a year earlier. Between 2015 and 2025 the index rose 164% in annual averages, against 53% in the euro area. Eurostat ranks Portugal second in the EU, after Hungary.

Question 3

How much does a square metre cost in Portugal?

Accepted Answer

The median price of homes sold in Q2 2026 was €2,445/m², across 37,854 sales. This is a national median: values are much higher in Lisbon, Porto and the Algarve, and much lower in the interior.

Question 4

How much does it cost to rent a home in Portugal?

Accepted Answer

The median rent on new leases was €9.50/m² in the 12 months to March 2026, more than double the €4.39/m² of 2017. In the municipality of Lisbon, the median in Q1 2026 was €17.42/m².

Question 5

How many new homes are built each year in Portugal?

Accepted Answer

27,301 new homes were completed in 2025, the highest figure since 2011, but still far below the 125,708 of 2002. Licences reached 42,066 dwellings in 2025, which points to more completions in the next few years.

Question 6

Are foreigners buying up homes in Portugal?

Accepted Answer

It depends which foreigners. Buyers with tax residence abroad took about 5% of the homes sold in 2025. Counting also the foreign nationals who live in Portugal, foreign citizens made 27.6% of purchases by households, and most of them live here. The effect of non-residents is mainly local: the Algarve, Lisbon and Madeira. On average they paid more: €335,640 (EU) and €470,277 (outside the EU), against €234,120 for buyers resident in Portugal.

Question 7

What is the effect of immigration on house prices?

Accepted Answer

Immigration was a large demand shock: the population grew by 824,914 people between 2021 and 2025, for 95,294 new homes completed. At 2.5 people per household, that is about 330,000 households (an illustrative calculation). The Banco de Portugal estimates that 1% more demand raises prices by 0.52% to 0.64%, but it does not isolate the share due to immigration. And prices were already rising before the large wave of migration.

Question 8

Do the NHR regime and golden visas still exist?

Accepted Answer

Not for new applicants. The Non-Habitual Resident (NHR) regime was closed by the 2024 State Budget and replaced by IFICI, which is narrower. The property route of the golden visa ended in 2023, with the Mais Habitação programme; other routes, such as investment funds, remain.

Question 9

How much IMT does a non-resident buyer pay?

Accepted Answer

Since 2026, home purchases by non-residents pay a flat IMT (property transfer tax) rate of 7.5%, without exemptions. There are exceptions: the buyer is already tax resident, becomes resident within two years, or rents the home at a moderate rent for at least 36 months.

Question 10

What is the 6% VAT on residential construction?

Accepted Answer

It is a reduced VAT rate for building and renovating homes for owner-occupation or rent, for works whose process started between 25 September 2025 and the end of 2029, with ceilings on sale prices and rents. Since a building takes two to four years, the effect on completed homes should only appear from 2027.

Question 11

What support is there for young people buying a home?

Accepted Answer

Young people up to 35 are exempt from IMT and stamp duty on purchases since August 2024, and there is a public guarantee on mortgages, increased to €2.3bn, for contracts until the end of 2026. The IMF and the Banco de Portugal warn that this support adds demand without adding supply.

Question 12

Will house prices fall in Portugal?

Accepted Answer

No institution publishes five- or ten-year house price forecasts, and this investigation does not either. The IMF considers that prices "look stretched", but that the risk of a short-term correction is contained. The Banco de Portugal projects growth in housing investment of about 2% a year until 2028. As long as far fewer homes are built than demand requires, the pressure on prices is likely to remain. The scenarios for 2030 and 2035 are in the conclusions.

Question 13

How many homes is Portugal short of?

Accepted Answer

A study by the European Commission's Joint Research Centre estimates that by 2035 Portugal needs about 465,000 new homes, mostly in the Lisbon and Porto regions. At the 2025 pace, the decade would produce about 273,000. It is a third-party estimate.