Buying property in Lisbon: Guide for investors
Lisbon should still be near the top of your list in 2026 if you want a European capital with strong lifestyle pull and steady property demand. The city remains a magnet for remote workers, students, and travelers, and that mix keeps both resale value and rental demand healthy. But buying property in Lisbon in 2026 comes with a few new rules and market realities you should know before you move.
Below is an updated guide to buying property in Lisbon as an investor, refreshed for 2026 and aligned with what buyers are seeing on the ground right now.
1. What are the requirements to buy a property in Lisbon?
Portugal continues to be open to overseas buyers. There are no nationality based limits on purchasing in Lisbon. You will need:
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A Portuguese tax number, called NIF
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A local bank account for payments
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Proof of funds and source of funds checks through your bank and solicitor
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If you finance, most banks still ask for around 20 percent down for non residents, sometimes more depending on profile
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A lawyer and a licensed real estate agent are strongly advised for due diligence and contract steps
Portugal ended the real estate route for new Golden Visa applications, so buying property in Lisbon no longer qualifies you for Golden Visa residency on its own. Investors who want residency typically use the investment fund or business routes instead. Any site suggesting that a Lisbon home purchase gives Golden Visa benefits in 2026 is outdated.
Lisbon still operates with a fast moving offer culture. Quality stock in central zones often receives multiple bids. If you find a place that fits your strategy, be ready to reserve quickly.
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2. Is buying property in Lisbon a good investment in 2026
Macro backdrop
Portugal is expected to keep growing through 2026, supported by private consumption and investment linked to EU recovery funds. Public forecasts point to roughly two percent real GDP growth in 2026, with investment remaining an important driver.
Tourism demand stays high
Portugal set fresh tourism highs in 2024, with 31.6 million guests and 80.3 million overnight stays, and growth continuing into 2025. Lisbon is a major share of that demand. Lisbon recorded about 8.5 million total visitors in 2024, up on 2023, which keeps both short term and long term rental demand strong.
Price trend
Prices in Lisbon stayed elevated through 2025, with many sources putting average city pricing in the mid 6000 euros per square metre range and higher for new or prime renovated homes. In 2026, the market is expected to remain supported by limited supply in central areas and stable foreign demand, even if growth is calmer than the surge years.
Yield reality
Lisbon yields are lower than many secondary Portuguese cities, but still solid for a prime capital. Typical gross yields for apartments in Lisbon sit around 3.8 to 4.7 percent, with smaller units sometimes higher, especially outside the most saturated tourist streets.
3. Taxes when buying property in Lisbon in 2026
As a buyer, assuming this will be your first or second property, you’ll pay 3 taxes:
- transfer tax: IMT – Imposto Municipal sobre as Transmissões Onerosas
- annual property tax: IMI – Imposto Municipal sobre Imóveis
- stamp duty: Imposto de Selo
For rural land, a 5% flat rate is levied, while commercial property and building plots attract a 6.5% rate.
In addition to the IMT, you’ll also have to pay the stamp duty which is 0.8% to 10%, and the IMI (Imposto Municipal sobre Imóveis), between 0.3 and 0.45% for urban properties in Lisbon and other cities and towns.
There is a big caveat to this – if you are a resident in, or are running your business from any tax havens, you’ll pay 7.5% IMI.
In Lisbon, you’ll pay a flat rate of 28% tax on rental income, though this can be mitigated by Portuguese residents that are on the lowest tax rate of 14.5% if you add the rental income to your other annual income.
If you have not taken advantage of the Non-habitual resident scheme, you are restricted to the 28% tax bracket on your rental income as a non-resident. If you apply for the Non-habitual resident status you’ll pay a flat rate of 20% for 10 years. In addition, rental income from residential rentals is taxed at 25% for contracts signed or renewed from October 2023 onwards.
If you are a Portuguese resident, you may also be liable for capital gains tax when selling your property. This is calculated at 50% of the profit made on the sale.
However, certain conditions allow you to avoid paying this tax , for example, if you’ve owned the property for over 5 years or reinvest the proceeds into another property for primary permanent residency.
4. How to find a property in Lisbon?
There are many great ways to locate property in Lisbon. Here are a few suggestions:
- Idealista is a property portal that specialises in Portuguese homes
- OLX is an international community hub (of Portuguese origin) and marketplace where you can find everything from cars to properties.
- Local Estate Agents: Many local estate agents will have an extensive list of properties in Lisbon
- Engels & Völkers is an international estate agent with a strong presence in Portugal
- Castelhana is another international estate agent with a wide variety of properties listed in Lisbon and across Portugal as a whole.
- Portugal Homes are luxury estate experts in Portugal with over 30 years of experience.
5. Where to buy property in Lisbon?
There are many neighbourhoods to choose from in Lisbon, each with its own unique character. When deciding where to buy property in Lisbon as an investor, it’s important to consider what type of tenant you’re hoping to attract.
For example, students may look for a property close to the University of Lisbon in Campolide or Entrecampos. In contrast, young professionals prefer a more central neighbourhood like Baixa or Chiado. Families might look to the suburbs like Carnide or Loures.
Of course, each area has pros and cons, so it’s important to do your research before making a decision. We’ve covered a few of the highest-yield locations below.
Graça
Graça is a popular neighbourhood with tourists and young professionals alike. It’s located on one of Lisbon’s seven hills, offering great city views.
The average price of properties for sale in Graça, Lisbon, is €6,411 per square metre. Properties in Portugal tend to be categorised by square metre rather than square foot, as is common in many other parts of the world.
In 2025, the rental yield in Graça was around 5%. This is also an impressive yield for Lisbon’s central areas and one of the best within the city itself, given that several other areas offer yields ranging from 3% to 3.5%.
Yet, properties in Graça and other areas (including Alfama and Bairro Alto) cannot open new short-term rentals due to oversaturation. It’s part of the city’s response to combat having too many short-term rentals and not enough long-term options for residents. Graça is, therefore, better for long-term rentals or other property non-rental investments.
Chiado
Chiado is Lisbon’s most central neighbourhood, making it an excellent choice for those looking for a property close to the city’s best amenities. It’s also one of Lisbon’s most expensive areas to buy property, with the average price at the start of 2025 sitting at €7,725 per square metre.
Rental yields in Chiado tend to be slightly lower than in Graça, typically around the 3% mark.
Bairro Alto
Bairro Alto is one of Lisbon’s most vibrant and lively neighbourhoods. It’s known for its nightlife, with bars and clubs open until the early morning hours. This makes it a great choice for investors looking to rent to students or young professionals.
In terms of purchase price, the average cost of properties in Barrio Alto, Lisbon, sits between the price of similar properties in Graca and Chiado, two of the city centre’s most upmarket areas. At the start of 2025, you can expect the price of a property in Barrio Alto to be €6,758 per square metre.
Like Chiado, you can expect rentals to yield around 3% or slightly higher. Long-term rentals tend to do better in this area than short-term rents, which is something to bear in mind.
Estrela
Estrela is a leafy, residential neighbourhood located in central Lisbon. It’s popular with families and offers a more relaxed atmosphere than some of the city’s other neighbourhoods.
Though historically regarded as a more affordable part of the city, Estrela has recently become much more expensive, with the average purchase price now comparable to that in Chiado. As of the start of 2025, the average cost of property per square metre in Estrela is €7,337.
Rental yields in Estrela are typically quite high, often over 5%.
Lapa
Lapa is another central neighbourhood that’s popular with families and young professionals. It’s located close to Estrela and has a similar atmosphere.
Like Estrela, Lapa has seen a surge in price in recent years, becoming significantly more expensive per square metre. For instance, in 2025, the average purchase price of a property in Lapa is now €7,253, very similar to Estrela. You can expect rental yields here of between 3.5% and 4.5%.
Alfama
Alfama is one of Lisbon’s most historic neighbourhoods and is known for its traditional architecture and cobbled streets. It’s a popular tourist spot, making it a great choice for investors looking to rent their property to holidaymakers. Alfama is not allowing short-term renting licenses, but long term renting is allowed.
Another of Lisbon’s more central regions, Alfama properties command a high price per square metre, with an average of €7,300 at the start of 2025. Like in several other parts of the city, rental yields in Alfama tend to be somewhere between 3% and 4%.
6. What are the pitfalls of buying property in Lisbon?
Any investor needs to be aware of specific potential risks when buying property in a new city or country.
In Portugal, the first thing to be aware of is property debt, which we covered in our Buying Property in Portugal blog, which we strongly recommend you familiarise yourself with. However, any Portuguese property lawyer will check for such obligations before allowing you to proceed.
There have been issues with scams involving Portugal’s popular Golden Visa scheme, where agents have produced fake listings and forged documents in order to secure deposits from unwitting buyers, however, in Lisbon the strong expat community helps to ensure that unscrupulous vendors are quickly exposed and shut down.
If you plan on opening a short-term rental, there are some limitations, such as the contention areas in Porto and similar contention areas in Lisbon.
7. Why buy property in Lisbon?
In the past decade, Lisbon has undergone something of a renaissance. The city has been revitalised, with new infrastructure, restaurants, cafes and bars popping up all over the place. This has made it an increasingly popular tourist destination, which in turn has had a positive effect on the property market.
Prices have been rising steadily for the past few years and are expected to continue. Furthermore, the impressive tourism numbers and rise in short-term rental platforms makes Lisbon an excellent choice for investors looking to capitalise on the city’s increasing popularity.
If you are new to the short-term rental market, a range of tools are available to help you calculate the daily rental rate of your property.
Lisbon is also a relatively safe investment when compared to other European cities. The Portuguese property market is not as susceptible to bubbles as other markets, making it a more stable option for savvy investors.
8. Can foreigners buy property in Lisbon?
Yes, foreigners can buy property in Lisbon. There are no restrictions on who can purchase property in Portugal.
However, it’s important to note that if you’re not a resident of Portugal, you will be subject to capital gains tax when you sell your property.
This is currently set at 50% (but calculated with individual income and expenses) if profit is not reinvested for permanent residency within 2 years.
9. Is it worth buying a property in Lisbon?
Absolutely! As we’ve seen, there are many reasons why buying property in Lisbon is a great investment. The city is growing in popularity, prices are rising, and the market is relatively stable.
Though the average rental yield in Lisbon isn’t as high as in some other attractive real estate destinations like Dubai, it’s aligned with Portugal’s national average of just under 5%. Some areas have an average yield of just over 3%, but others stretch to above 5%, so it’s worth checking this if you plan to invest in Lisbon property that will become a long-term rental.
10. Is now a good time to buy property in Lisbon?
When buying property, timing is everything if you’re looking for the best value for your money.
Prices in Lisbon have been rising steadily for the past few years and are expected to continue to do so.
So, if you’re thinking of investing in property in Lisbon, now is a great time to do it. Remember to think about the type of occupants you want on your property.
We’ve highlighted areas that are popular with tourists, students and young professionals, but you can work on smaller niches too.
For example, you could consider buying properties on the outskirts of Lisbon, or in neighbouring towns, such as Mafra, Torres Vedres, or Sintra – all areas with outstanding surfing and water sports.
Find out more about the best rental yields in Lisbon with our handy article.
11. Invest with GuestReady
Lisbon is a strong choice, but it is not the only place where Portugal and Southern Europe offer solid property opportunities. Depending on your budget, risk appetite, and rental strategy, you may want to compare Lisbon with other high demand cities and resort regions.
Here are a few options investors often consider alongside buying property in Lisbon:
Porto
Portugal’s second city continues to attract tourists, students, and tech talent. Prices are usually lower than Lisbon, and some neighbourhoods still offer slightly higher long term yields. As in Lisbon, short term rental rules depend on the parish, so always check local licensing before you buy.
Algarve
If your focus is holiday demand and seasonal returns, coastal Algarve towns remain a favourite. Villas and larger units can perform well in peak months, and year round occupancy is improving in areas with digital nomad appeal.
Madeira
Funchal and nearby areas have seen rising interest thanks to consistent tourism and a growing remote worker community. Entry prices can be lower than Lisbon, while demand for mid term stays is strong.
Spain and other European hubs
Some investors diversify into nearby markets such as Barcelona, Valencia, Malaga or Paris for a mix of lifestyle value and mature rental demand. Each market has its own licence rules and tax structure, so a side by side financial model matters.
If you are thinking about investing beyond buying property in Lisbon, GuestReady can help you compare markets, estimate revenue, and choose a location that fits your goals. Reach out and tell us which cities you are considering, and we will guide you through the best angles for each one.
Here at Guestready, we pride ourselves on being a leading short-term rental management company in Europe and Asia.
We offer a range of services to help property investors maximise their return on investment.
If you’re considering investing in Lisbon, contact us today to find out how we can help you achieve your investment goals and maximise your rental return.
