What Canadians Need to Know About Buying Property in Portugal
In recent years, many Canadians have begun exploring international property markets as alternatives to Canada’s increasingly expensive and competitive real estate scene. With high property prices in major cities like Toronto and Vancouver, tighter borrowing rules and new restrictions on foreign property ownership, some Canadians are looking abroad for lifestyle changes, investment opportunities, or retirement options.
Portugal has quickly become one of the top destinations. It is relatively affordable by Canadian standards, and given the residency incentives, it’s no surprise that more Canadians are purchasing second homes or relocating there entirely. But before making the leap, it’s important to understand the considerations.
Legal Considerations for Canadians Buying in Portugal
The good news? Canadians face no restrictions when buying property in Portugal. You’re free to purchase as an individual or through a company and the process is relatively straightforward compared to many other European countries.
However, keep in mind:
- Legal representation is essential: Hiring a local lawyer (advogado) to conduct due diligence is strongly advised. They will check ownership records, licensing, outstanding debts and ensure the property complies with planning laws.
- Portuguese fiscal number (NIF): You’ll need to obtain a Portuguese tax identification number (Número de Identificação Fiscal) before signing any contracts or opening a bank account.
- Promissory contract and final deed: Once you agree on a price, a promissory contract (Contrato de Promessa de Compra e Venda) is signed, followed by the final deed (Escritura) when the sale is completed and registered.
Residency Options for Canadians
Owning property in Portugal does not automatically grant residency, but there are accessible pathways:
- D7 Visa: Ideal for retirees or those with passive income (such as pensions, dividends, or rental income). This visa requires proof of stable monthly income, private health insurance and accommodation in Portugal (either rented or owned). It remains a popular route for Canadians seeking a peaceful retirement or lifestyle change.
- Digital Nomad Visa: Designed for remote workers or freelancers earning income from outside Portugal. Applicants must meet minimum income requirements (around €3,280 per month as of May 2025) and show proof of remote work. This has become a top choice for Canadian professionals working online.
- Note on the Golden Visa: Once a popular option for property investors, the Golden Visa programme was restructured in 2023. Residential real estate no longer qualifies and the programme is now limited to investments in regulated funds, business creation, or cultural contributions. As such, it’s no longer a common route for most Canadian buyers.
Residency typically leads to permanent residence after five years and Portuguese citizenship may be possible after that, provided you meet the requirements, including language proficiency.
Tax Implications for Canadians
Understanding your tax obligations is critical. As a Canadian tax resident, here are a few things to consider:
- Double Taxation Agreement: Canada and Portugal have a tax treaty that helps avoid being taxed twice on the same income.
- Portuguese Property Taxes:
- IMT (Property Transfer Tax): Paid when you purchase, ranging from 0% to 8% depending on the value and purpose of the property.
- IMI (Municipal Property Tax): An annual tax based on the property’s tax value, usually between 0.3% and 0.8%.
- Capital Gains Tax: If you sell your property in Portugal, capital gains may apply. For non-residents, they’re subject to a flat 28% tax on the entire capital gain from the sale of property. For residents, they’re taxed on 50% of the gain, which is added to their annual income and taxed at progressive rates.
- Rental Income: If you rent out your Portuguese property, you’ll pay 28% tax on net rental income in Portugal. This income must also be declared in Canada.
It's wise to speak to an accountant or cross-border tax specialist familiar with both Canadian and Portuguese tax laws to ensure compliance and optimise your situation.
Final Thoughts
Portugal continues to stand out as an exceptional choice for Canadians exploring opportunities for relocation, investment, or retirement in Europe. Boasting a nice climate and high quality of life, along with the added benefit of attractive residency programs, the country offers a real balance of stability and opportunity. Portugal presents a well-rounded destination for those seeking a new chapter abroad.
As always, thorough research and professional guidance are recommended to ensure a smooth and successful transition.
