Published on and written by Cyril Jarnias
The Portuguese real estate market is changing its face, but it remains one of Europe’s most interesting playgrounds for a French investor. Prices are rising quickly, the influx of foreign buyers shows no signs of slowing down, taxation is being reorganized, and the rules of the game—particularly for non-residents—are becoming more technical. In other words: in 2026, you can no longer invest in Portugal as a simple “tourist.” You need to understand the numbers, the tax mechanisms, and the new market reality… but the opportunities are still there.
This article covers the key points for French investors: where to buy, expected returns, project financing, new tax rules, and Portugal’s competitiveness compared to Spain and France.
A market highly sought after by foreigners, with the French leading the charge
The first thing to keep in mind in 2026 is that Portuguese real estate is clearly driven by international demand. Data from the Idealista platform shows that certain regions have an impressive share of foreign views on sales listings, with French buyers playing a major role.
In the districts and islands most consulted by foreigners, the figures are striking:
| District / Island | Share of foreign views on listings |
|---|---|
| Madeira Island | 42% |
| Faro (Algarve) | 36% |
| São Miguel Island (Azores) | 34% |
| Viana do Castelo | 30% |
During the analyzed period, France is the country generating the most international views on properties for sale in Portugal. French buyers even dominate foreign demand in eight districts: Viana do Castelo, Bragança, Vila Real, Guarda, Leiria, Braga, Aveiro, and Porto. In Porto, for example, 15% of international visitors come from France, ahead of the United States (12%) and Brazil (9%).
The market share of British buyers in foreign demand in the Algarve, highlighting the diversity of investment sources.
For a French investor, this means two very concrete things. First, the liquidity risk is reduced: there is depth in international demand for resale or rental. Second, competition is real in the best locations, which requires being well prepared, especially in terms of financing and taxation.
Prices still competitive… but rising sharply
Portugal remains one of the most affordable real estate markets in Western Europe, especially compared to the United Kingdom or France. Price data, however, shows a spectacular increase in recent years.
Nationally, the median transaction price reached approximately €2,050 to €2,111/m² in 2025, with an annual increase of around 16 to 18%. Over twelve months, prices have jumped by about 15 to 18%, placing Portugal among the most dynamic markets in Europe. Estimates for 2026 still anticipate a progression of 5 to 8% over the year, with a more cautious scenario at 4% and a high scenario around 10% if supply remains limited and rates ease.
Focus on major cities and key regions
In metropolitan areas and highly demanded zones, price and rent levels provide a tangible idea of the investment effort required. The aggregated data on apartments by size gives a useful overview for a French investor.
Average purchase prices by property type
| City / Region | 1 bedroom (€) | 2 bedrooms (€) | 3 bedrooms (€) |
|---|---|---|---|
| Aveiro | 109,000 | 166,000 | 216,000 |
| Braga | 117,000 | 178,000 | 232,000 |
| Cascais | 295,000 | 450,000 | 588,000 |
| Coimbra | 92,000 | 140,000 | 183,000 |
| Faro | 192,000 | 292,000 | 382,000 |
| Funchal / Madeira | 195,000 | 298,000 | 389,000 |
| Lagos | 241,000 | 367,000 | 480,000 |
| Lisbon | 321,000 | 489,000 | 638,000 |
Even in prime areas, such as Lisbon or Cascais, price tags often remain lower than those in Paris or the French Riviera for comparable properties, although some micro-neighborhoods in Lisbon (Chiado, Príncipe Real) have now reached levels above €5,000/m².
Approximately 80% of national real estate transactions (excluding ultra-prime areas) fall within a range of €120,000 to €350,000.
Price explosion, but a “soft landing” predicted
After several years of post-Covid euphoria, experts now speak of a soft landing. Growth remains strong, but the dynamic is becoming more stable and more regional. We observe:
Expected price trends by geographic segment
An expected national annual increase of around 2 to 5% in the medium term.
Stronger growth (3 to 7% per year) in premium areas of Lisbon and the Algarve, supported by scarce supply and an international clientele.
Faster progress in secondary cities and inland areas, boosted by a shift from Portuguese households and value-seeking buyers.
The key is the structural imbalance between supply and demand. Construction struggles to keep up, hampered by high costs and a labor shortage, while demand remains very strong, driven by both Portuguese and foreigners.
Rental yields among the most attractive in Western Europe
The other pillar of Portugal’s appeal for a French investor is yields. 2025–2026 data shows gross yields generally between 5% and 7.5% for long-term rentals, with significantly higher peaks in certain segments.
In 2026, Idealista estimates the average gross yield on residential investments at around 6.3 to 6.9%. Net yields frequently stand between 5.4 and 5.8% nationally, once charges and taxes are taken into account. This is clearly above what is achievable in France in many major cities, where margins are often eroded by taxation and rent controls.
Examples of gross and net yields by city
| City / Type | Gross yield 1 bed | Net yield 1 bed |
|---|---|---|
| Aveiro | 6.4% | 5.0% |
| Braga | 6.0% | 4.7% |
| Cascais | 4.6% | 3.4% |
| Coimbra | 8.8% | 6.9% |
| Faro | 5.2% | 4.0% |
| Funchal | 5.7% | 4.3% |
| Lagos | 4.5% | 3.1% |
| Lisbon | 4.6% | 3.5% |
We can see that the best price-to-rent ratios are not necessarily where French people instinctively buy most. Coimbra, for example, combines moderate purchase prices and solid rents, with net yields close to 7%. Other secondary markets like Braga, Aveiro, Setúbal, and Vila Nova de Gaia also show very interesting profiles, with lower entry points than Lisbon or Cascais, but credible rental demand.
Conversely, Lisbon, Cascais, Oeiras, Lagos, and some neighborhoods of Porto are excellent for capital appreciation, but less performant in pure yield terms, as acquisition prices have risen sharply.
Long-term vs. short-term rentals
2025–2026 data shows that short-term tourist rentals in tourist areas can generate gross yields 15 to 35% higher than long-term rentals. In Lisbon, Porto, or the Algarve, gross yields of 6 to 10% are not uncommon for well-managed seasonal rentals.
But this performance premium comes with:
– stricter regulations in some cities;
– sometimes strong seasonality (especially in the Algarve and on some islands);
– higher management costs (cleaning, turnover, booking platforms).
The 2026 market remains favorable for short-term rentals, but it is essential to factor in regulatory risks and dependence on tourism. For a French investor seeking stability, long-term rental, especially in university cities or growing employment areas, remains an excellent risk/return compromise.
Portugal, Spain, France: the real estate match from a French investor’s perspective
For a French person in 2026, the most natural alternative to Portugal remains Spain, with France serving as a wealth comparison point. The three markets have very different profiles.
Price comparison and growth prospects
| Country | Average price large city (€/m², order of magnitude) | Expected annual growth | Positioning |
|---|---|---|---|
| Portugal | Lisbon ~€5,922/m²; Porto ~€3,628/m² | +4.3 to +5%/year | High-growth market, still below French prices |
| Spain | Barcelona ~€5,000/m²; Seville ~€3,100/m² | +2 to +4%/year | Mature market, very dynamic in tourist areas |
| France | Paris ~€10,560/m²; Lyon ~€5,950/m² | +1 to +2%/year (stabilization) | Heritage market, expensive and highly taxed |
Spain offers sometimes higher gross yields (5.2 to 7.8% on some costas) thanks to a massive tourist volume, but:
– acquisition costs are higher (buyer fees often 10–14%);
– transfer taxes (ITP) are heavier (6–10%, depending on the region);
– prices have already risen sharply in the hotspots.
Portugal displays average purchase costs representing 6.5 to 9% of the price of residential properties.
In France, the investor benefits from an ultra-protective legal framework, but suffers from:
– heavy taxation on rental income and capital gains;
– a real estate wealth tax (IFI) of 0.5 to 1.5% beyond €1.3 million;
– net profitability often diminished by charges and complex tax regimes.
From a “return/risk” perspective, investor surveys cite Spain as the market offering the best return/risk ratio in Southern Europe (45% of votes), closely followed by Portugal (38%), while France receives no votes in this category. Portugal thus appears as a sort of “dynamic safe haven,” smaller than Spain but with strong appreciation potential, and more profitable than most French markets.
Buying in Portugal: key steps and specifics for a French buyer
Despite strong foreign demand, Portugal remains a country where foreigners – including non-residents – can buy without particular restrictions. A French person can acquire 100% ownership of a property in their own name, anywhere in the territory (mainland, Madeira, Azores), with no quota or mandatory local partner.
NIF, bank account, lawyer: the indispensable trio
Before even making an offer, three elements are essential:
1. Obtain a NIF (Número de Identificação Fiscal) This is the Portuguese tax number, mandatory for any legal or financial operation: property purchase, bank account opening, electricity contract, etc. A non-resident must appoint a fiscal representative in Portugal, which can be their lawyer or a specialized provider (annual cost often between €80 and €150). The NIF is obtained from the tax authorities (Finanças), either directly or through a representative.
Although not legally mandatory, opening a bank account in Portugal is almost essential for making deposits, paying IMT, stamp duty, and notary fees. The bank requires a passport or national ID, the NIF, proof of address, and proof of income.
3. Engage a bilingual lawyer and real estate agent A Portuguese lawyer is strongly recommended. They verify the legal status of the property (titles, mortgages, debts, easements), check contracts, and represent you if you are not on site. Fees are generally between 1 and 1.5% of the price, plus VAT (23%). On the real estate agent side, commissions are paid by the seller (3 to 6% of the price + VAT). For the buyer, using the seller’s agent is therefore free. If you mandate a buyer’s agent representing only your interests, they may charge 1 to 2% of the price.
The purchase process, step by step
Once these prerequisites are in place, the typical process goes like this:
Key steps include searching via portals like Idealista.pt, Imovirtual.com, or Casa.sapo.pt, followed by a purchase offer, due diligence by a lawyer (checking the land registry, caderneta predial, licenses, energy certificate, absence of debts), signing the promissory contract (CPCV) with a deposit of 10-20%, finalizing financing, signing the final deed before a notary or via Casa Pronta with payment of the balance and taxes, and finally registering with the land registry and tax authorities.
The CPCV is a very important particularity of the Portuguese market. In case of unjustified withdrawal:
– if the buyer withdraws, they lose their deposit;
– if the seller withdraws, they must return double the deposit.
This mechanism strongly secures the process for a serious buyer.
Financing: how Portuguese banks handle a French buyer in 2026
Good news for a French investor: Portuguese banks readily finance non-residents, in euros, with durations similar to what is found in France.
Rates, durations, and minimum down payment
In 2025–2026, average rates on new mortgage loans are around 3 to 3.5%, with peaks at 4–4.5% depending on profiles, and prospects for normalization toward 3–3.6% if the ECB continues monetary easing. The products offered are standard:
– variable rate indexed to Euribor (6 or 12 months) + bank margin;
– fixed rates for a few years, then switching to variable (a mixed formula).
Regarding loan-to-value, the rules are clear:
The maximum financing granted to non-residents for a real estate investment, requiring a 30 to 40% down payment.
The maximum term for a non-resident is generally 30 years, with repayment required before age 75. Processing fees are around 1 to 1.5% of the loan amount, plus the property appraisal value (€300 to €650), often a required life insurance, and a stamp duty of 0.6% on the loan amount.
Solvency rules are strict: the regulator sets a cap on the debt-to-income ratio at 35% of gross income, and banks often prefer to stay under 50% of net income, including existing debts.
Total cost of an acquisition: don’t underestimate the fees
In addition to the price and down payment, a French buyer must factor in a purchase cost budget which, for a standard residential property, typically falls between 7 and 10% of the price, possibly 6–8% on smaller amounts.
For a €300,000 apartment, for instance, one typically observes the specific characteristics and trends related to this purchase price.
– IMT (transfer tax): between €16,000 and €20,000, depending on use (primary vs. secondary residence) and the applicable scale;
– stamp duty on the purchase: 0.8% of the price, i.e., €2,400;
– notary and land registry: approximately €1,000–€1,500;
– lawyer’s fees: around 1 to 1.5% of the price, i.e., €3,000 to €4,500 + VAT.
Simulations show a total fee budget of around 7–9% for a €300,000 property, which remains lower than the overall cost of an acquisition in France or Spain, where the bill can rise to 10–20% of the price.
Taxation in 2026: what a French investor absolutely must know
This is the big topic of the moment. Lisbon has deeply overhauled its tax regimes in 2024–2025. The famous Non-Habitual Resident (NHR) status, which many French dreamed of, is closed to new entrants. It has been replaced by a much more targeted scheme, IFICI – sometimes called NHR 2.0 – reserved for very specific profiles (researchers, innovation professionals, tech entrepreneurs, etc.).
For the majority of French real estate investors, this regime is no longer accessible nor truly relevant: it already taxed Portuguese rental income, and the new scheme only targets certain professional incomes.
End of the classic NHR and new IFICI regime
The “historical” NHR offered for 10 years:
– a flat rate of 20% on Portuguese professional income;
– significant exemptions on foreign-source income (dividends, pensions, foreign rents, etc.), under certain double taxation conditions.
Its extinction is gradual but real: it is no longer open to new installations, except in complex transitional cases. People who obtained NHR before the cutoff dates continue to benefit from it until the end of the 10-year period, but new arrivals must now deal with:
In Portugal, you can choose either the standard income tax regime (progressive scale up to 48% with surtaxes for high incomes) or the IFICI (NHR 2.0) regime, which offers a flat rate of 20% on eligible professional income for 10 years, subject to activity conditions (research, innovation, startups). The latter does not apply to rental income or real estate capital gains.
In other words, buying an apartment in Portugal in 2026 no longer provides any automatic tax advantage. Real estate investment and the question of personal tax status are now disconnected.
IMT: the major new development for non-residents
The government introduced a major reform for 2026: a flat IMT rate of 7.5% on most residential acquisitions by non-residents. This rate does not apply if:
– the buyer is already a Portuguese tax resident;
– or if they become one within two years of the purchase;
– or if the property is intended for residential rental with a monthly rent not exceeding €2,300, subject to signing a lease within 6 months of acquisition and renting for at least 36 months out of the first 5 years.
For a French person buying a second home or a vacation property with no plan to become a tax resident in Portugal, this reform significantly increases entry costs, especially above certain price thresholds.
At the same time, the IMT scales remain progressive for residents, with bands ranging from 0% (below approximately €106,000 for a primary residence) up to 7.5% above €1.15 million. IMT is therefore the key transfer tax to anticipate in your financial planning.
Taxation on rents, capital gains, and ownership
In portfolio, taxation remains something to watch, but it is not dissuasive on a European scale.
Rental income is subject to a flat rate of 28% for non-residents, with a reduced rate of 10% planned from 2026 for moderate rents up to €2,300 per month, and taxation on 50% of income for legal entities. IMI (property tax) ranges from 0.3 to 0.45% of the cadastral value, typically €500 to €2,000 per year. AIMI (surtax on high-value real estate assets) applies above €600,000 in cadastral value per person, with progressive rates, but exempts commercial properties and agricultural land. Capital gains on real estate are taxed at 28% for non-residents, with possible exemptions if reinvested in moderate rental properties.
Double taxation and the France-Portugal tax treaty
For a French person, the France-Portugal tax treaty plays an important role. It notably provides that:
– real estate income (rents, capital gains) from properties located in Portugal are taxable only in Portugal;
– certain French financial income may be exempt in Portugal if already taxed at source in France (with reduced withholding rates on dividends and interest).
France, for its part, retains the ability to tax capital gains on its own properties, but not on Portuguese properties owned by a Portuguese resident. For a French investor who is a non-resident of Portugal, the risk of double taxation on Portuguese rents and capital gains is therefore limited, provided their tax situation is well structured.
New incentives for affordable rental: a strategic angle for investing
One of the major directions of Lisbon’s policy is to promote “affordable” or moderate rental, in a context of a housing crisis for local households. For a French investor with a long-term approach, these schemes can transform the net profitability of a project.
“Moderate” rents and the RSAA regime
Two main axes characterize the 2026 reform:
In Portugal, rent ceilings are considered “moderate” up to €2,300, i.e., 2.5 times the monthly minimum wage. The RSAA (Simplified Affordable Rental Regime) offers full exemption from personal or corporate income tax on rents for long leases (at least 3 years for a primary residence) not exceeding 80% of the median rent per square meter in the municipality.
In parallel, projects that enter into a contract with the IHRU via the new Rental Investment Contract (CIA) benefit from massive reductions: IMT exemption on purchase, IMI exemption for 8 years then reduced by 50%, AIMI canceled, 6% VAT on renovation work, etc., provided that at least 70% of the area is reserved for residential rental and rent caps are respected.
For a French investor targeting a “social” or mid-market wealth and rental strategy, this framework can be remarkably effective in improving after-tax net yield, while aligning with Portuguese public policy objectives.
Which types of locations to favor in 2026?
Portugal in 2026 is no longer the uniform market it was ten years ago. It is segmenting, with very different trajectories depending on the region.
1. Ultra-prime areas: Central Lisbon, Cascais, luxury Algarve
In these sectors, prices are high, competition is strong, but international market depth remains exceptional. Here you will find:
Selection of high-potential areas with attractive rental yields and capital gains
Neighborhoods like Baixa, Chiado, Príncipe Real, or Avenida da Liberdade with gross yields of 3.5 to 4.5% and appreciation of around 50% over five years.
High-end villas and apartments for expats, gross yields of 4 to 5.5% and value increases close to 48% over five years.
Resorts like Quinta do Lago, Vale do Lobo, Lagos, or Vilamoura: gross yields up to 6–9% on tourist rentals, capital gains of 40% or more over five years.
These are interesting markets for long-term capital and personal use (second home, teleworking, retirement), less so for pure cash-flow logic unless targeting well-optimized short-term rentals.
2. High-yield secondary markets: Coimbra, Braga, Aveiro, Viana do Castelo
These cities and regions combine:
– still moderate purchase prices;
– robust rental demand (students, middle class, local workers);
– gross yields possibly reaching 7–9%, with net yields around 5–7%.
Data shows, for example:
Presentation of the best cities in Portugal for rental real estate investment, based on yields and demand.
Champion of rental yield in Portugal, with yields reaching up to 8.8% gross and 6.9% net on one-bedroom apartments.
Offers attractive gross yields of 5.6% to 6%, depending on the size of the property.
Stands out for notable foreign demand, with 30% international views, and solid yields.
For a French person seeking a long-term rental strategy, diversified and less dependent on tourism, these markets offer an excellent balance.
3. Islands and regions with a strong “lifestyle” dimension: Madeira, Azores
Madeira (Funchal) and the island of São Miguel (Azores) increasingly attract foreign buyers, especially teleworkers and retirees looking for mild climate and safety. Madeira, for example, shows:
– prices for a T1 around €195,000,
– gross yields of around 5.7% for a T1,
– a very high share of foreign views, especially on Madeira Island (42% of views on some listings).
These markets are interesting for a combination of personal use + seasonal rental, but are exposed to seasonality and lower market depth for resale.
Golden Visa, residence visas, and reality for the French real estate investor
A key point often misunderstood: the Portuguese Golden Visa no longer offers any benefit by purchasing real estate since October 2023. All real estate components (residential, commercial, direct, or via real estate funds) have been removed from the program.
In 2026, the Golden Visa still exists, but only through:
– investments in non-real estate investment funds;
– donations to cultural heritage or research;
– job creation or investments in Portuguese companies.
For a French person wishing to buy an apartment, rent it out, and live there a few months, the main residence paths to consider are now:
– classic residency (employee, entrepreneur, retiree, passive income via the D7 visa, etc.);
– standard tax residency (≥183 days per year in Portugal or main home as of December 31);
– the IFICI status for certain profiles of researchers or innovative professionals.
Real estate acquisition confers neither residency nor preferential tax status. However, it remains an excellent vehicle for preparing a medium-term move or diversifying assets outside France, with a path to European citizenship faster than in Spain (5 years of residence in Portugal vs. 10 in Spain).
In summary: why Portugal remains a top target for a French investor in 2026
For a French investor, 2026 no longer resembles the blessed era of NHR and real estate Golden Visas. The framework is stricter, prices are higher, the non-resident IMT has tightened entry conditions, and international competition is fierce in the most sought-after areas.
But on the flip side, Portugal’s fundamentals remain remarkably solid:
Portugal offers competitive real estate prices, attractive yields, and a stable framework for investors.
Prices still lower than Spain and well below France, especially outside prime micro-neighborhoods.
Net rental yields often above 5%, up to 6–7% in well-chosen secondary markets.
Sustained price growth, even if slowing, in a context of structural housing shortage.
Safe and politically stable environment, with a high level of English and good integration of foreign communities.
Real estate taxation less confiscatory than in many Western European countries, despite the brake on favorable regimes.
To take advantage of this context, a French investor should:
To optimize your investment, be willing to look beyond the Lisbon–Cascais–Algarve trio and explore cities like Coimbra, Braga, Aveiro, Viana do Castelo, or some emerging areas of Porto. Finely integrate the impact of the non-resident IMT and consider the question of future tax residency on-site or switching to “moderate” rental eligible for reduced regimes. Work with a bilingual lawyer and agent to secure the transaction, master due diligence, and optimize the acquisition structure. Calculate your yields net after taxes, taking into account IMI, condo fees, management costs, and Portuguese and French taxation.
Seen from Paris, Lisbon is no longer the well-kept secret of ten years ago. But Portugal remains one of the few markets in Western Europe where you can still combine:
– reasonable prices,
– attractive profitability,
– likely capital appreciation,
– and an enviable quality of life.
For a French person looking to diversify their assets, escape heavy national taxation, or prepare for a retirement in the sun without giving up security and the euro, investing in Portuguese real estate in 2026 remains a perfectly relevant strategy – provided it is approached with numbers, a long-term vision, and solid professional advice.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
