If you want to buy a property in the Algarve, thorough preparation is essential. This includes analysing your desired property, including price, specifications, and the timeframe for viewings and purchase, as well as researching the available properties. In Portugal, a distinction is made between properties for permanent residence, second homes, holiday homes with an official rental license (AL), and properties located in a tourist complex with a condominium and communal pool. Purchase costs and usage conditions also vary depending on the type of property.
If you're not yet familiar with the Algarve, a tour from east to west is recommended. It's advisable to work with an experienced, licensed real estate agent (AMI number). The agent should know the Algarve well, be up-to-date on the latest real estate laws, and understand all the important property documents. Real estate agents in the Algarve don't automatically work as part of a network as they do in other countries. The agent is paid by the owner, not the buyer. It's absolutely essential to give the agent a very detailed briefing.
You should always view at least 3, and no more than 6 to 8 properties, as too many options can be confusing. A real estate agent should also be able to provide a professional, market-appropriate valuation and have contacts with banks, lenders, architects, appraisers, and law firms. When applying for a mortgage, it's important to be informed about the associated costs and conditions. Approval depends on your age, stated assets and income, whether you are a resident or non-resident, the Euribor interest rate, and whether you have life insurance. If you want a mortgage, it's advisable to obtain preliminary information regarding loan approval to be certain of the amount the bank will grant. There are fixed and variable interest rates, which the lender will explain in a personal consultation.
The purchase costs are between approximately 6 and 8%, the legal fees vary and must be negotiated with the respective lawyer.
It is advisable to arrange two viewings to get a better feel for the property and the region. Houses in the Algarve are built differently than in Northern Europe, due to the mild climate. If you are unsure about the quality of the house, you can hire a property surveyor. The surveyor is paid by the buyer and will prepare a technical report. If this report is satisfactory, price negotiations can begin. The real estate agent knows the seller's asking price and the market, so they can help the buyer make a reasonable offer. Once the buyer and seller have agreed on a price, the next step is to choose a lawyer, which is necessary for the property purchase. The lawyer will request the property documents for review through the real estate agent. A Portuguese tax identification number (NIF) is required for the purchase. You can apply for this yourself at the tax office or request it through your lawyer.
According to the law, here are the important house documents:
- Cadastral certificate
- Residential and building permit from the municipality
- Property certificate from the tax office
- Energy certificate
- Original floor plans from the municipality
It is common practice to conclude a preliminary contract with a down payment of approximately 10% to secure the property. This preliminary contract must already include all important information about the property, as well as a timeframe for when the notarization is to take place. The seller's lawyer or the seller themselves must compile all important property documents or request them from the relevant authorities before signing the preliminary contract. Depending on the property and its location, direct neighbours may have a right of first refusal and can exercise it. This is the responsibility of the seller or their lawyer. Shortly before the notarisation, the real estate agent should inspect the property again to ensure that all furniture is present according to the inventory list and that the electricity, water, and gas meters have been read and provided to the buyer's lawyer. During the notarisation, the notary reviews all documents from the buyer's lawyer regarding the property, receipt of payment, and the seller's and buyer's personal information. In the case of a mortgage, the relevant bank also participates in the notarisation. The notary must verify that the seller has properly fulfilled all payment obligations. All parties receive a notarised purchase agreement upon completion, which the notary reads aloud beforehand in Portuguese. The lawyers, not the real estate agent, later translate the purchase agreement into the languages of the seller and buyer. Congratulations on your purchase of a property in the Algarve, Portugal.
Real estate agency Togofor-Homes Lda, Algarve/Alentejo, AMI 6902
Susanna Gross Sales & Marketing Manager
Copyright June 2026
