Risks and pitfalls of buying property in Portugal

Many UK citizens are attracted to Portugal for its lifestyle and climate, often looking to buy a home near the water. However, like any overseas investment, buying property in Portugal comes with specific challenges that should not be overlooked.

In this guide, we’ll look at some of the common pitfalls of buying property in Portugal. We’ll help you prepare for potential risks and show you how to avoid them.

If you’re also looking for ways to save money on currency exchange during the buying process, consider opening a Wise account. With Wise, you can send large transfers for low fees* and benefit from mid-market exchange rates, making it a great option for secure international payments.

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Pitfalls of buying property in Portugal

Buying property abroad can be an exciting experience, but it also comes with unexpected challenges, even for experienced buyers. From unfamiliar regulations to hidden costs, there are many ways things can go wrong. To help you avoid these issues, here are some common pitfalls to keep in mind when purchasing property in Portugal.

Overlooking the Golden visa programme changes

Portugal’s popular Golden Visa programme has seen significant changes in recent years, and many buyers may not realise how these changes affect residency eligibility.¹

Until October 2023, investing in real estate was one of the qualifying options, but this is no longer the case. If you were planning to obtain residency through property purchase, it’s important to be aware that the rules have now changed.¹

Unexpectedly high condominium fees

Many foreigners buying property in Portugal forget about the ongoing costs of owning it, especially condominium fees. These fees are monthly payments that cover the upkeep and repair of shared areas and services in apartment buildings.²

Condominium fees are calculated based on the size of the property, its share of the building and the level of luxury. For instance, if your apartment represents 5% of the building, you will pay 5% of all shared expenses.²

In luxury developments, monthly fees can reach several hundred euros. They are often higher in newer buildings because they include premium features such as spas, gyms and landscaped gardens.²

Buyers should always ask about the current condominium fees to understand what they cover and whether any extra payments are planned.

Not researching local water supply issues

Water availability can vary greatly across Portugal, especially in rural or coastal regions where droughts have become more common. Some areas, such as the Algarve and the city of Lagoa, have faced summer water restrictions that limit activities like watering gardens, filling swimming pools, or washing cars.³

If you’re buying property in Portugal, know that these measures can affect how you maintain outdoor spaces and even basic household water use. It’s important to check whether you’ll need to manage your own water supply system and understand the related costs to avoid unexpected expenses later on.³

Ignoring seismic risks

Parts of Portugal, such as the Azores and Lisbon, experience seismic activity. This is partly because Portugal is near the border of Eurasian and African tectonic plates. Some older buildings and houses may not meet modern seismic standards, which can be a safety hazard.⁴

Before buying, it’s crucial to verify that the property meets current building standards and to check whether any earthquake protection has been added. This will give you peace of mind and save you from unexpected expenses in the future.

Misunderstanding the caderneta predial details

The caderneta predial is a document issued by the Portuguese tax authority that provides information about a property. This includes the property’s size, location, classification and ownership details. Misunderstanding its content can be a serious mistake for foreign buyers, since it may lead to legal or financial issues.⁵

This document is particularly important since it can reveal discrepancies between what is built and what is legally registered. For example, a house may advertise a larger living area than what appears in the appears in the caderneta predial, meaning part of the property could be illegal construction.⁵

Buyers shouldn’t rely solely on the seller’s word and must carefully check this document. It’s best to hire a local lawyer to verify that the details from the document match the property listing.

Language barrier

Although English is commonly spoken among real estate professionals in Portugal, many important documents and communications are still in Portuguese. Legal contracts and land registry forms, in particular, use formal language that can be challenging even for native speakers.

Relying only on informal translations from your agent can lead to misunderstandings of important terms or obligations. A bilingual legal advisor can be very helpful in navigating both language and cultural differences, ensuring that contracts are clear and reducing the risk of disputes.

Hidden structural problems

Buying an old, charming Portuguese property may seem like a dream, but it can carry hidden risks. Even if the exterior looks fine, issues like mould and damp may be present inside, which could impact the structural integrity over time. These issues are more common in regions with high humidity and more rainy winters.

Some houses may have undergone superficial renovations to appear attractive to foreign buyers, masking deeper problems. Foreign buyers often skip professional surveys to save money, but the cost of repairs can easily outweigh the savings.

Before buying, it is essential to carry out a detailed inspection, particularly for older rural homes or properties that have been left vacant for some time. Hiring a qualified surveyor can uncover hidden problems helping you avoid costly repairs later.

Misjudging seasonal tourism impact

One of the most common pitfalls when buying property in Portugal is not visiting during both peak and off season. Popular tourist areas can look significantly different throughout the year, which might be hard to see on initial visit.

In peak seasons, popular cities and regions might become overcrowded and noisy. On the other hand, some amenities might not be available during the off-season periods.

If you’re not able to start the buying process a year in advance and see for yourself, make sure you ask the locals and your realtor about these issues.

Currency conversion

Buying property in Portugal from abroad means that your overall costs can be influenced by fluctuations in exchange rates. A property that initially seems affordable can quickly become significantly more expensive if the exchange rate moves against you.

Relatively small shifts in the exchange rate can translate into thousands of euros, particularly when purchasing more expensive properties. Many buyers find it helpful to use a specialist money transfer service, helping to protect your investment from unexpected financial swings.

Save on currency conversion fees with Wise when buying property abroad

When buying property in Portugal, pitfalls can quickly derail your plans. One important factor to plan for is how you’ll transfer large sums between the UK and Portugal. Using a convenient, secure and low-cost* service like Wise is a great option.

With a Wise account, you can send money internationally at low fees* and mid-market exchange rates. There’s even a dedicated service for large transfers, suitable for overseas property purchases.

Sign up with Wise

Sources used:

Sources last checked on date: 24-Oct-2025