Buying in Lisbon vs the UK: costs and taxes

Lisbon charges you more to buy a second home than a main one, then very little each year. England charges you more to buy if you live abroad or own a home anywhere else, then more again each year if it's a second home.

The short version

Anyone can buy in Portugal, with no foreign-buyer tax. On a EUR 360,000 flat, IMT is about EUR 15,040 (about £12,530) as your main home or EUR 16,100 (about £13,410) as a second home, plus stamp duty of about 0.8% [7].
Back home, a £300,000 house costs £11,000 in stamp duty if you buy while living abroad, and £26,000 if you also keep your Lisbon flat [1].
Lisbon's IMI is the legal minimum, 0.3% of the property's tax value, after the council voted to keep it for 2026 [8]. Second homes in England can pay double council tax [2].
Portuguese banks lend up to 90% on a main home and 80% on anything else under Banco de Portugal limits from 1 August 2026 [9].
A new UK–Portugal tax treaty applies to UK income tax and capital gains from 6 April 2026 [6].

Pound conversions use the Bank of England spot rate of 5 November 2026 (£1 = EUR 1.20).

What a Brit can buy in Lisbon, compared

Portugal doesn't restrict foreign buyers. A Brit can buy a flat in Campo de Ourique, a renovated townhouse in Graça or a family place out in Cascais on the same terms as a Portuguese buyer. You need a Portuguese tax number (NIF), and a lawyer of your own to check the land registry certificate, the tax record and the licence of use. Buying no longer gets you a golden visa, so a flat isn't a residence route on its own. Our guide to buying property in Lisbon covers the CPCV promissory contract, the deposit and the deed.

Portuguese ownership is outright. Flats are held under propriedade horizontal, where each owner owns their flat and a share of the common parts, with a condominium paying for the lift and the roof. There's no freeholder and no lease ticking down, unlike most flats in England and Wales.

Back home, anyone can buy too: houses are usually freehold, flats usually leasehold. The big differences are the timing of the commitment, since a signed CPCV with its deposit binds you far earlier than an English exchange does, and the tax.

Upfront costs side by side

We've used a EUR 360,000 flat in Lisbon, which is about the same money as a £300,000 house back home at our rate.

	Lisbon (flat, EUR 360,000)	England (house, £300,000)
Foreign-buyer surcharge	None	2% if you weren't in the UK for 183 days in the 12 months before buying [1]
Main purchase tax, your main home	IMT: 8% minus EUR 13,763.35 = about EUR 15,040 (about £12,530) [7]	SDLT at standard rates: £5,000 [1]
Buying while living abroad, no other home	IMT on the second-home table: about EUR 16,100 (about £13,410) [7]	£11,000 [1]
Keeping or buying another home anywhere	About EUR 16,100 [7]	£20,000 if you're UK resident, £26,000 if you're also non-resident [1]
Stamp duty on the purchase	Imposto do Selo at about 0.8%: roughly EUR 2,880 (about £2,400)	Included in SDLT
Other fees	Lawyer, notary or Casa Pronta, land registry; mortgage stamp duty if you borrow	Solicitor or conveyancer, searches, Land Registry

IMT is charged on the higher of the price and the property's tax value, using the 2026 tables for mainland Portugal [7]. The main-home table only applies if it really will be your permanent home; a non-resident buying a holiday flat pays on the other table. Budget roughly 7% to 8% on top of the price all in.

England works the other way. Stamp duty is mild on a modest first purchase, then the 2% non-resident surcharge and the 5% higher rate stack. The higher rate counts residential property worth £40,000 or more anywhere in the world, including your Lisbon flat [1]. If you buy as a non-resident and then spend 183 days in the UK within a year, you can claim the 2% back.

Scotland and Wales do their own thing. Scotland charges Land and Buildings Transaction Tax with a flat Additional Dwelling Supplement for second homes, and Wales charges Land Transaction Tax with its own higher rates. Neither has a 2% non-resident surcharge.

Financing: Portuguese bank or UK lender?

In Portugal, the Banco de Portugal's recommendation sets the limits. For credit assessments from 1 August 2026, banks can lend up to 90% of the lower of the price and the valuation on your own permanent home, and 80% on a second home or investment [9]. Monthly debt payments should stay under 45% of net income, with a small allowance for exceptions, and terms run to 40 years if you're 35 or under, 35 years if you're older [9]. These are ceilings, and banks are usually tighter with non-residents and income paid in sterling, so expect a bigger deposit.

Back home, a UK mortgage while you live in Lisbon is possible, but many high-street lenders won't count euro income. Specialist lenders will, usually with a bigger deposit and the FCA's foreign-currency loan rules in the background. Our guide to UK mortgages for Brits living abroad explains them.

Owning it: property tax and running costs

In Lisbon, IMI, the municipal property tax, is charged on the property's tax value (VPT), usually well below the market price. The council voted to keep the legal minimum of 0.3% for 2026, according to press reports, though derelict buildings under an unfinished repair order pay 30% more [8]. A flat with a tax value of EUR 200,000 pays about EUR 600 a year (about £500). Owners of very valuable portfolios can also pay AIMI, an extra charge on the combined tax value above a high threshold. Add condominium fees and insurance.

In England, council tax is by valuation band. Since 1 April 2025 councils can charge a premium of up to 100% on second homes; in 2025, 211 of 296 authorities did so, all at the full 100% [2]. A UK house left empty while you're in Lisbon can cost double.

Letting your UK home brings in the Non-Resident Landlord Scheme. If your usual home is abroad, your letting agent (or a tenant paying more than £100 a week) takes basic-rate tax off the rent each quarter unless HMRC approves you to receive it gross [3]. You apply on form NRL1 and still file a Self Assessment return. Our guide to renting out your UK home explains it. As a Portuguese resident you declare the rent in Portugal too, with relief under the treaty.

Tax when you sell

The Portugal side

Since 1 January 2023, non-residents selling Portuguese property are taxed like residents: half of the gain is added to their other Portuguese income and taxed at the progressive IRS rates, instead of the old flat 28% [10]. For a Brit selling a holiday flat with little other Portuguese income, that can work out cheaper than the old flat rate, depending on the size of the gain. Portuguese residents selling their main home can get relief if they reinvest the proceeds in another main home, with conditions. Keep every invoice from the purchase and any works: they reduce the gain.

The UK side

Selling a UK home while you live in Lisbon. Non-residents pay UK capital gains tax on UK property and must report every sale to HMRC within 60 days of completion, even with no tax to pay [4]. For 2025/26 and 2026/27 the rates are 18% and 24%, with a £3,000 annual exempt amount [5]. Private residence relief can cover your years living there, but it's general information and the rules for years abroad are tight. See our guide to selling UK property as a non-resident.

Selling the Lisbon flat once you're back in the UK. As a UK resident you're taxed on gains anywhere in the world, and Portugal can tax gains on Portuguese property too. The UK and Portugal signed a new double taxation convention on 15 September 2025, replacing the one from 1968. In the UK it applies to income tax and capital gains from 6 April 2026 [6]. Portugal taxes first, and the UK normally credits the Portuguese tax against your bill. Work the gain out in pounds, at the exchange rates on the purchase and sale dates. A tax adviser who knows both countries can check how the new treaty applies to you.

Which makes sense for whom

On a two-year contract or a digital nomad visa. Rent. Buying costs of 7% to 8% and a binding CPCV deposit don't suit a short stay.
Retiring to Lisbon or Cascais. Buying a main home can make sense: the lower IMT table, low IMI and relief on reinvesting. Sell the UK house first if you can, and report the sale to HMRC within 60 days.
Keeping the UK house as a let. Sort the NRL1 before the first rent comes in, and check your mortgage allows letting.
Holiday flat, home base in the UK. You'll pay IMT on the second-home table, and when you next buy in the UK you'll pay the 5% higher rate.

Want to compare notes with people who've just bought? Ask in our community group for Brits in Portugal.

Buying in Lisbon vs back in the UK: IMT, IMI and a brand-new tax treaty