It is strongly advised that a foreigner employ the services of a reputable lawyer experienced in foreign real estate transactions before attempting to buy property in Portugal.

Real Estate Agencies are required to be licensed, insured and bonded under Portuguese law. Ask to see the license prior to going out with an agent to view properties.

It is a good idea to rent or lease in an area before you make the commitment to buy.

The basic approach to purchasing property is as follows:

- Hire a lawyer. The lawyer will draw up a preliminary purchase contract, or offer, which both parties must sign. This is witnessed and registered at a Notary Office.
- Have the lawyer arrange a title search at the Town Hall to ensure that the property and its construction match what is on record in the Land Registry.

- Ensure that a Habitation License is on file if the house was built post-1951.
- Obtain a tax number from the local Tax office. Passport or ID card required.
- Pay the agreed upon earnest money deposit, typically between ten and thirty percent of the sales price.
- Sign the final contract (Ecritura de Compra e Venda) in the presence of a Notary Public, and pay the balance of the purchase price. The Notary will record the transaction in the Land Registry, and will file the necessary tax document (Cadernata Urbana) with the Tax office.

Added March 2007 by Susan:
We were just in Portugal with the purpose of obtaining a tax id number so as to purchase a house. No one had ever memtioned that we also need someone to "sponsor" us. It could have been any willing national, a real estate agent, a bellhop , a person from a cafe etc...... So that seems to be a forgotten tidbit that is important when having to wait in a very long line for the id no. only to be refused.