Thinking of Buying in Portugal? What Canadians Should Know Before Making the Move
Portugal’s reputation as a destination for lifestyle, investment, and relocation continues to grow. For Canadians eyeing Portugal, especially popular regions like the Algarve, understanding the legal and financial landscape is essential. Portugal offers many advantages for international buyers, but it’s important to be well-informed about the process, particularly when it comes to legal procedures, residency pathways, and taxation.
Property Ownership in Portugal
There are no restrictions preventing Canadians from buying property in Portugal. Whether you're purchasing a holiday home or planning a permanent move, the process is relatively accessible. That said, Portuguese real estate law operates differently from Canadian norms, and it’s crucial to work with a local legal advisor to review contracts, titles, and municipal planning permissions before proceeding.
Understanding the Legal Process
Once you’ve found a property, the purchase typically follows three key steps:
Reservation – A small deposit to secure the property while legal checks begin.
Promissory Contract (Contrato de Promessa de Compra e Venda) – A formal agreement outlining terms, usually accompanied by a 10% deposit.
Deed (Escritura) – Final signing before a notary, where ownership is officially transferred.
Each stage involves due diligence, including land registry verification, tax checks, and confirming the build status (especially important in rural or older properties).
Residency Options for Canadians
If your goal goes beyond ownership to full-time living in Portugal, there are several visa options:
D7 Visa – Ideal for retirees or those with passive income (e.g. pensions, investments).
Digital Nomad Visa (D8) – For remote professionals working for non-Portuguese companies.
Returnee and Talent-Based Incentives – Under the revised “NHR 2.0” regime, select professionals and returning Portuguese citizens may access specific tax benefits.
Residency allows for longer stays and access to public services. After five years of legal residency, permanent residency or citizenship may become an option.
Tax and Reporting: Cross-Border Considerations
Portugal and Canada have a double taxation agreement, which helps prevent being taxed on the same income in both countries. However, tax residency in Portugal brings additional obligations, especially for those earning rental income or selling property later.
You’ll also need to comply with Canadian foreign asset reporting if your overseas property exceeds CAD 100,000 in value. Failing to disclose can carry penalties, so it's advisable to consult tax experts familiar with both systems.
Portugal’s tax rules have evolved in recent years, with the original Non-Habitual Residency (NHR) scheme replaced in 2024 by a more targeted version. This new model focuses on professionals in specific sectors and excludes most passive income exemptions. It’s still worth reviewing your eligibility before deciding.
Conclusion
Portugal remains a compelling option for Canadians looking at international property, but each step requires clarity. From legal contracts to residency choices and tax transparency, preparation is key. Working with informed professionals on the ground ensures you’re not only buying a property, but building a future that’s legally and financially sound.
