Common Mistakes Foreign Buyers Make in Portugal (and How to Avoid Them)

Buying property in Portugal is exciting — but it can also be tricky, especially for foreign buyers. From misunderstandings about contracts to unexpected taxes, there are several pitfalls that can turn your dream purchase into a stressful experience. In this post, we’ll cover the most common mistakes buyers make and, more importantly, how to avoid them.

1. Trusting the Wrong Agent — or Just a Website

Not all real estate agents in Portugal work in the best interest of the buyer. Many focus on serving the seller, and property websites often contain outdated or duplicate listings.

How to avoid this:

• Work with an agency dedicated to buyers, like Private Luxury Collection.

• Ask your agent how they source properties — off-market listings and trusted networks are key.

• Avoid sending random messages to agents from public listings; organized guidance is essential.

2. Rushing into a Promissory Contract (CPCV)

The Contrato Promessa de Compra e Venda (CPCV) is legally binding. Once you sign and pay your deposit (usually 10%), backing out can be costly.

Avoid mistakes by:

• Always having an independent lawyer review every clause.

• Understanding penalties for both buyer and seller.

• Ensuring financing, licenses, and conditions are explicitly detailed in the contract.

3. Misunderstanding Taxes, Inheritance Laws, and AL Licenses

Portuguese taxes and regulations can surprise foreign buyers. Common pitfalls include:

• IMT: Property transfer tax

• Stamp Duty: Transaction tax

• IMI: Annual property tax

• Inheritance laws: Portugal has a “forced heirship” system, affecting estate planning

• AL licenses: Required for short-term rentals, increasingly restricted in some areas

How to avoid issues:

• Get a pre-purchase tax consultation.

• Discuss inheritance planning with your lawyer.

• Verify AL license eligibility before purchasing if rental income is part of your strategy.

4. Banking, Currency Exchange, and Legal Shortcuts

Foreign buyers often lose money on poor exchange rates, high bank fees, or by cutting legal corners.

Steps to protect yourself:

• Use dedicated currency exchange services for better rates.

• Open a Portuguese bank account with guidance from your lawyer.

• Hire an independent lawyer experienced in Portuguese real estate.

Your Path to a Smooth Purchase

Portugal offers incredible opportunities for property investment and lifestyle, but success depends on avoiding common mistakes. With the right team, smart questions, and careful planning, you can purchase confidently and enjoy your new property.

📥 Pro tip: Download our free checklist of common mistakes and how to avoid them (link in show notes).
📞 Next step: Book a consultation with a buyer’s agent or lawyer who truly understands your needs.