The purchase of homes in Portugal by foreigners has once again become the focus of political and real estate sector debate, after the AD Government – within the scope of the “shock plan” it launched to try to resolve the housing crisis – announced an increase in the IMT (Municipal Property Transfer Tax) for these buyers, in the case of those living outside the country. But the truth is that, as official INE data shows, non-residents in Portugal do pay more for the houses they purchase, but they represent only a small part of the homes sold nationwide. Over the past seven years, they have never accounted for more than 8% of total transactions, and this share has been decreasing to new lows since the end of golden visas and changes to the Non-Habitual Resident (NHR) Regime – measures implemented by the previous Socialist government.

On Thursday, September 25, Prime Minister Luís Montenegro announced a set of housing measures. Included in this package, which aims to increase the supply of homes at affordable prices, is the increase of the Municipal Property Transfer Tax (IMT) on the purchase of homes by citizens not residing in Portugal, thus excluding emigrants and resident foreigners. However, the amount of the penalty for these investors, via an increase in the tax, has not yet been disclosed by the Executive.

It was in this context that idealista/news delved into data from the National Statistics Institute (INE) to find out what the actual weight of foreigners residing outside the country is in the purchase of houses in Portugal. In the second quarter of 2025, non-resident citizens bought a total of 2,107 homes (-14.5% compared to the same period last year), which corresponds to 4.9% of the total homes sold in the country. And this was indeed the lowest share of foreigners in transactions since 2021.

Houses sold in Portugal to residents and non-residents
Number of homes sold to residents / Number of homes sold to foreigners
(Chart omitted – idealista/news, source: INE, created with Datawrapper)

The timeline going back to 2019 shows that the share of foreigners never exceeded 8% of the total homes sold in the country – in other words, residents in Portugal have always accounted for the vast majority of purchases. The maximum share of international investors in the total number of transactions was recorded in the summer of 2023, just before the end of golden visas for real estate investment and at a time when home purchases by the Portuguese were still low, affected by high interest rates (Euribor was around 4%), along with low average savings levels and high inflation.

Since that “hot” summer, the trend has been clear: foreigners who do not reside in Portugal have been losing weight in home purchases, a decline that was also aggravated by the end of the old Non-Habitual Resident (NHR) regime and its replacement by a more restrictive one at the start of 2024. In addition, the Portuguese regained purchasing power with falling interest rates and inflation, reflected in a higher number of residential property purchases starting in the spring of last year.

Although the amount invested in housing by foreigners from abroad is more representative in the national total than the number of transactions, a cooling of their weight has also been observed in recent years: it fell from about 13% of the national total at the end of 2023 to just 8% in the second quarter of 2025. Investment in home purchases in Portugal by foreigners totaled nearly €825 million between April and June this year, down 5% compared to the same period last year.

Foreigners buying homes in Portugal
Weight of homes purchased and amount invested by foreigners relative to the national total
(Chart omitted – idealista/news, source: INE, created with Datawrapper)

And those who have been withdrawing the most from the national residential market are buyers living outside the European Union (EU) – such as Brazilians and Americans, for example. The same INE data reveals that these families and investors bought 995 homes in the second quarter of 2025, 18.6% fewer than in the same period last year, with investment also falling 8.4% to around €463 million. During the same period, foreigners living in the EU also bought fewer homes (-10.5%, totaling 1,112 transactions), which ultimately resulted in a slight decrease in the total invested (-1% to €362 million).

It remains to be seen what impact the increase in IMT announced by the Government will have on foreign home purchases in the country if it is approved by Parliament – it should be noted that the AD coalition does not hold an absolute majority. Meanwhile, the new version of the immigration law, which may also affect real estate transactions, has already been approved in the Assembly of the Republic, but still needs to be reviewed by the President of the Republic – and Marcelo Rebelo de Sousa may once again send it back to the Constitutional Court.

When presenting this measure, Miguel Pinto Luz assured that “Portugal will not cease to attract foreign investment,” describing it as “a measure of fairness that will bring more equity and redistribute wealth more effectively,” while rejecting the idea of blaming foreigners for rising housing prices.

But this vision differs from those in the sector. In fact, the growing withdrawal of foreign investment from the country is the main concern pointed out by various professionals in the field, who argue that international citizens do not buy the same homes as the Portuguese, generally ensuring transactions with much higher values and driving the economy.

Foreigners buying homes in Portugal
(Freepik illustration)

Foreigners buy more expensive homes than the Portuguese – but the difference has been narrowing

The same time horizon from INE (covering the last seven years) shows that foreigners have always purchased homes at higher prices than the Portuguese. The greatest difference was recorded at the end of 2021, when international buyers paid more than double the price for a home (around €345,000) compared to residents in the country (€166,000).

Since then, the difference between the average price of homes purchased by foreigners and Portuguese has been decreasing due to rising housing costs in the national market. In the second quarter of 2025, the average value of homes acquired by foreigners was 69% higher compared to the average of those bought by Portuguese.

This period also marks new historic highs in the average prices of homes sold to both Portuguese (€232,000) and foreigners (€391,000), after they grew annually by 15% and 11%, respectively.

Prices of homes bought by foreigners and residents
Average prices of homes bought by foreigners and residents in Portugal (euros)
Difference between average prices of homes bought by foreigners and residents (%)
(Table omitted – idealista/news, source: INE, created with Datawrapper)

Breaking it down by the tax residence of international buyers, significant differences can be observed. Those living outside the EU have been buying much more expensive homes than those residing within European borders. Between April and June this year, the difference was 43%, with buyers outside the EU paying on average €465,000 for a home. Meanwhile, buyers residing in the EU paid an average of €325,000 for a home.

All in all, international citizens living outside the EU bought homes worth double the price of those purchased by residents in Portugal. Meanwhile, buyers living in the EU acquired homes 40% more expensive than the Portuguese. INE data thus suggests that foreigners – especially those living outside the European Union – tend to focus on the more premium residential market, not directly competing with the majority of Portuguese buyers.