5 August 2025

Buying property in Portugal: the 7 most common mistakes and how to avoid expensive consequences

Buying a house or apartment in the Algarve of Portugal is a long-cherished dream for many. But there are some pitfalls lurking between wish and reality. Whether wrong assumptions, missing documents or misunderstandings in the process, the risks of buying real estate in Portugal are often underestimated.

To ensure that you are prepared in the best possible way, we will show you the most common stumbling blocks in this blog post and give you concrete tips on how to avoid them safely.

1. No legal examination of the property before the purchase
2. Miscalculation of incidental purchase costs and ongoing expenses
3. Assumption: "I can simply rent out the house to tourists"
4. Purchase through unlicensed intermediaries
5. Wrong price expectations by comparison with other countries
6. Waiver of a building surveyor
7. Contracts in Portuguese without professional translation

1. No legal examination of the property before the purchase

A common misconception: Many people think that everything will be checked at the notary appointment anyway, as you might know it from other countries. In Portugal, however, this is not the case: the responsibility for the legal review lies with the buyer and his lawyer.

Possible risks can be, for example, that the house was built on agricultural or non-buildable land, parts of the building are not approved or registered in the land register, or that there are open land charges, mortgages or rights of use of third parties, e.g. communities of heirs.

✅ Our tip:
Hire a Portuguese lawyer (Advogado) early on to check all aspects in your interest. In particular, he should examine:

Land Registry (Registo Predial)
Cadastral documents (Caderneta Predial)
Building plans and usage permits
Energy certificate (Certificado Energético)

2. Miscalculation of ancillary purchase costs and ongoing expenses

As in other countries, in Portugal, the pure purchase costs of the property are not everything. First-time buyers in particular are surprised when the ancillary costs, taxes and fees are offset or when it comes to running costs. Roughly speaking, you can expect fixed costs of about 7 - 10% of the purchase price in Portugal. You are also welcome to read our blog post: "Incidental costs: Taxes and fees when buying property in Portugal in 2025" and find out in detail and broken down what fixed and also ongoing costs you can expect.

✅ Our tip:
Before buying, make a complete list of ancillary costs and also ask for the current IMI (Annual Property Tax in Portugal) value. If you would like to rent out the property later, we have created a guide on how to calculate the yield here and also explain the costs and taxes incurred there, among other things : "Return on investment for a holiday home in the Algarve: costs, taxes and calculations explained simply."

3. Assumption: "I can simply rent out the house to tourists"

Be careful with the AL license: Especially in recent years, the laws regarding tourist rentals have been adapted again and again and without a valid AL license, the property may not be offered on Booking, Airbnb & Co. If there is already a rental license for the property, in many cases it can simply be transferred to the new owner.

✅ Our tip:
Deal with the current legal situation and ask for an existing license. Our blog post "Rental and AL licenses in the Algarve in 2025: everything you need to know about the latest changes" gives you an overview of the current regulations and general requirements for tourist rentals in Portugal.

4. Purchase through unlicensed intermediaries

Not everyone who calls themselves a "real estate agent" is actually entitled to broker real estate in Portugal. Without the so-called AMI license (issued by the Portuguese Institute of Real Estate and Construction INCI), no brokerage activities may be carried out. If this license is missing, there is neither a legal basis for the activity nor a guarantee of seriousness or liability. In the past, it has already happened that down payments for the same property were taken by several interested parties at the same time.

✅ Our tip:
Ask for the AMI number (Real Estate Broker's License) or look at the real estate agent's website, where it must be listed visibly, usually at the bottom of the page. Only work with registered agencies that are legally active in the local market.

5. Wrong price expectations by comparison with other countries

A house with sea views in a good location in the Algarve is not realistically to be expected for 300,000 €, even if online portals sometimes give a different impression. In sought-after coastal towns, prices for houses with pools and sea views usually start at around €800,000. Apartments with two bedrooms and good building fabric in comparable locations usually start at around €450,000.

However, those who have a smaller budget can also find alternatives in the interior of the country. There are simple houses for about 180,000 €, but you should allow for a drive of about an hour to the Algarve coast.

✅ Our tip:
Create a realistic requirement profile, prioritize your wishes (e.g. location vs. condition and equipment) and get advice based on real comparable properties. Rule of thumb: The closer to the sea, the higher the price, even if the building fabric does not always keep up.

6. Waiver of a building surveyor

In Portugal, there is no legal obligation to submit a building appraisal when buying a property. Many buyers therefore rely solely on a viewing or photos. In the case of new buildings, this is usually not a problem. In older buildings, on the other hand, caution is advised. Moisture damage often occurs there, for example in basements or on north-facing facades. Outdated electrical installations without RCDs are also not uncommon. In addition, there may be deficiencies in the thermal insulation, and in some cases insulation is even completely missing.

✅ Our tip:
If you are unsure, have a building surveyor prepare an appraisal. He examines:

Substance, roof, facade
Pipes, insulation, windows
Conformity with building regulations

7. Contracts in Portuguese without professional translation

Most contracts, from the reservation form to the promissory contract to the notarial deed of sale, are written exclusively in Portuguese in Portugal. While for the notary deed a translator is obligatory, it is not for the other contracts and agreements. Many foreign buyers sign these documents without understanding the content in detail. This entails risks: misunderstandings can arise, for example, in the payment modalities, in the case of unclearly worded clauses on liability for defects or in the case of imprecise regulations on withdrawal from the purchase contract.

✅ Our tip:
Nowadays, there are many document translation tools online. Nevertheless, have unclear clauses translated by your lawyer. This is the only way you know exactly what you are getting into.

Conclusion: Good preparation is the best insurance

Buying property in Portugal is certainly feasible and often a worthwhile investment. But it takes care, a realistic budget and local expertise. The biggest mistakes are caused by time pressure, exaggerated expectations or the lack of professional support. If you pay attention to these points and don't fall for supposed "bargains", nothing stands in the way of your new home in the Algarve.

We accompany buyers in a legally secure, transparent and personal manner through the entire purchase process with honest advice and a network of experienced lawyers and tax experts.