The southwest European gem of Portugal flanks the Iberian Peninsula, bordered only by Spain and the Atlantic Ocean and brimming with sun-soaked holiday destinations. From Porto to the Algarve, the ocean influences the culture and cuisine, so what if that lusted Portuguese lifestyle could be yours for more than just a few weeks of summer?
Over one million ex-pats call Portugal home, with cheaper living costs than much of Western Europe, lower crime rates, and higher quality of life. In fact, ten percent of the Algarve’s population comes from abroad, with over 77,000 foreigners residing in the regional capital of Faro. But why move to Portugal and buy a villa, when you could build your dream home yourself?
Our guide looks at just how much it costs to build a villa in Portugal, whether you’re making a move overseas, getting your hands on a holiday home, or simply investing in the lucrative property market. From the cost of land to the materials and your rights as a foreigner, it’s all here. Let’s get started.
How much does it cost to build a villa in Portugal?
Thinking about building a villa in Portugal? We don’t blame you. With sizzling year-round temperatures, low costs of living, and never much more than two hours from the sea, the allure of this southern European country is undeniable. Property is always a good financial investment, whether you plan to make use of your holiday home yourself or get it on the rental market, and constructing your dream home yourself just might be even more budget-friendly than buying. So how much does it cost to build a villa in Portugal?
There are a lot of things to consider when starting a build yourself, and a whole host of factors that will affect the final costs, many of which could be completely out of your control. For that reason, it’s a good idea to have some hefty savings to back you up and you should always be prepared for your project to go over budget.
That said, Portugal can be very cheap as construction costs go, with some of the lowest salaries in the EU. Land prices will vary a lot more depending on where you choose to build, but it can still be much cheaper on average than in other Western European countries.
Before we break down all of the costs that go into building your own villa, you can make some calculations, based on the size of property you plan to build, to figure out just how much you need to budget, or whether or not you’re getting a good deal from potential contractors. In Portugal, the starting price for constructing a new build to European standards is around €500 per square meter, going up to around €1,500 per square meter in popular resort areas due to higher salaries and demand, all depending on the materials used.
Renovation figures, which could include adding extensions or loft conversions, average at around €200-400 per square meter, depending on their nature.
For the build alone, you should expect to spend a minimum of €60,000 on a 120-meter squared property in Portugal, but closer to €90,000 if you want modern amenities, while building in a more popular area will set you back at least €180,000, before you’ve even purchased the land.
Buying Land in Portugal
Depending on where you want to build in Portugal, the land could cost you a lot more than the build costs. That said, there are 10s of thousands of cheap plots of land available for sale in Portugal, but the least expensive are located in less desirable rural areas. Still, thanks to Portugal’s unique geographical location, you’re never more than a few hour’s drive from the coast, so you might not be compromising too much if you want to save a few pounds.
Land in Portugal can cost less than €100 per square meter in rural areas and small towns, and you’re likely to get much bigger plots. For example, you could get your hands on a 300-square meter plot of land in the center of Marinha Grande, the small coastal town in the Leira District of Portugal, for just €15,000, and you could spend the same amount on a huge 12,500 square meter plot if you opt for Penamacor, the rural municipality on the Spanish border in central Portugal.
However, you could spend more than €2,000 per square meter on land in the most sought-after resorts in Portugal. For example, 1,300 square meters of urban land with planning permission on the bustling Lisbon coast, could cost you upwards of €3,500,000 due to developmental potential. And for a residential plot of just 108 square meters with approved planning permission for a 360 square meter property in the capital will set you back around €750,000.
Albufeira, on the sun-soaked southern coast, is one of the most expensive regions, after Lisbon. However, you could still get your hands on a 320 square meter plot of land for around €175,000, or if you have a luxury build in mind, a 2,000 square meter plot with permission for a 500 square meter property for €520,000.
Distance to the beach, proximity to hospitals, schools, and social conveniences, all affect the cost of land far more than the plot size, no matter where you buy. In Portugal, you can find land to suit any budget, but you might have to sacrifice amenities for a cheaper plot.
Building a Villa in Portugal: The Small Print
Purchasing land with planning permission already granted could save you a lot of hassle, disappointment, and wasted money. Still, you want to be careful if someone is willing to part with such a plot because it could mean their project couldn’t go ahead for other reasons.
Regulations can change all the time in Portugal with little notice so you should always go above and beyond when it comes to research before you think about buying land and planning a build. Each county in Portugal has its own building legislation, while national law applies to the development of protected areas like nature reserves, lake shores, ancient ruins, etc. There are a host of restrictions, requirements, and zoning plans within this broad legislative structure, and you could have a lot of bridges to cross when applying for planning permission.
In Portugal, building rules are so broad they’re described with the phrase “Cada casa é um casa”, meaning “each house is a different case”, so you can still do all your research and be let down by local restrictions. That doesn’t mean you should shy away from embarking on a building project though, you just might need some extra reserves of cash to ensure you’re prepared for all scenarios.
Planning permission consists of architectural drawings and various plans like electric, landscaping, acoustics, and thermal plans for your project. Submitting your plans will cost a minimum of €2,000, but you’re more likely to be granted permission on a plot of land with no existing buildings, permitted you submit a binding construction request to secure building rights and the land is not located in a protected zone.
An extra cost to consider on top of construction, land, and planning permission, is the installation of electricity. This costs around €1,000 per 100 meters of cable. If your new build is more than 600 meters from a transformer, it will be much more expensive. This is one of the downsides to buying cheap rural land. Building on rural land also limits your investment returns if you do plan to rent or sell your home after building.
Construction Costs in Portugal
As we’ve said, construction costs on the coast are much higher than those in the countryside. Building on rural land could be one-tenth of the price of building near the beach, but you’re less likely to produce a property that would make good returns if you did want to rent or sell. The average construction cost per square meter was updated to around €500 per square meter in Portugal, but the reality could be higher or lower depending on the house you want.
In really rural areas, located close to the Spanish border and therefore furthest from the sea, you could spend as little as €40 per square meter to build, and between €125 and €140 per square meter in small towns. In bigger towns, the construction price per square meter averages at €400 per square meter, while building in large cities will cost around €900 per square meter, and an average of €1,000 per square meter in upscale resorts.
This isn’t just about salaries, although contractors and buildings will charge more in more desirable locations, but also the materials on offer and the style of build that is favored in such sought-after spots is of a higher standard and therefore more expensive too.
You’ll also need to find an architect if you want the smoothest building process. The best way to work with reliable people is to obtain recommendations from trusty locals and friends. Estate agents could help you out but they might also take a commission from recommendations.
Most Portuguese architects speak English and their fees will be calculated as a percentage of the total cost of the work, this is usually around 10 percent which you shouldn’t reduce if you don’t want them to cut corners with your build. Make sure you consider your architect fees in your budget. If you’re building a mid-range villa in a coastal plot of land that you’ve already obtained, a 300-square-meter property will cost you at least €150,000 to build with planning permission, electric installation, and materials included. This means you should reserve €15,000 of your budget to pay your architect.
How to Move to Portugal as an Expat
When it comes to building property as a foreigner in Portugal, there are no special requirements or paperwork for nonresidents. All you need is a VAT identification number, or número de identificação fiscal (NIF) in Portugal. In fact, buying property or land to build on could make it easier to become a resident and you can benefit from Portugal’s tax-friendly laws, rather than the other way round.
The only other requirement for buying land in Portugal is that the land is registered for habitation, not agricultural purposes, and isn’t in a protected zone, but this is the same for the Portuguese as it is for foreigners.
Like we’ve said, rather than becoming a resident and then being able to buy property in Portugal, you can jump on the property market and use that as your way to earn residency. The only requirement of this is to stay in the country for a minimum of just 14 days every two years. That said, you don’t have to own property to move to Portugal as an ex-pat.
If you’re an EU citizen, you can freely relocate to Portugal. If you’re not, you can live in Portugal visa-free for up to 90 days, but if you want to stay longer you have to complete an application for a Portugal Residency Visa which is valid for around three months or a Resident Permit which is valid for one year. The first option acts as a temporary extension to give you enough time to acquire a Residency Permit which can be renewed every 12 months.
After five years of renewals, you can apply for your Permanent Residency Permit. However, owning a property or land lets you skip out all of the in-betweens and you can apply for permanent residency straight away.
Is Portugal safe for ex-pats?
Portugal is one of the safest countries in the world with low crime rates that are on a downward trend. Portugal ranks low for crimes of almost every nature and is one of the safest countries in the world for women too with limited sexual harassment reports. You should feel safe walking at night in most areas of the country, but petty crime is the only type that is not uncommon. Opportunistic thieves operate in touristy areas, so you should always keep an eye on your belongings, but moving to Portugal as an ex-pat is very safe. Even natural disaster risks are low.
How much does it cost to build a villa with a pool in Portugal?
On top of average construction costs of around €500 per square meter to build a villa in Portugal, you should reserve an extra €10,000 or more for a swimming pool if want a professional job. This figure includes excavation, concrete, lights, and surround, but the bigger the pool, the higher the cost. You might also need to submit extra planning permission for a pool construction project, but if you already know you want a pool, it would be wise for your architect to include it in your original building plans so you don’t have to pay for a second permission request.
Is property a good investment in Portugal?
Like anywhere in the world, property can be a good financial investment in Portugal. Portugal has risen in popularity as a holiday destination over the years and there’s currently more demand for accommodation than what is available. If you plan to rent out your property, spending a little extra to build or buy in Lisbon or Porto, could give you impressive rental yields even if you only retain occupancy in the high season.