The new home loan program launched by the Portuguese government is attracting a large number of young foreign applicants. The policy allows Portuguese tax residents aged 18 to 35 to apply for a 100% home loan, while also benefiting from exemptions on IMT (Property Transfer Tax) and IS (Stamp Duty Tax). This measure aims to make homeownership more accessible for young people, as previous bank loan rates typically ranged between 85% and 90%.
According to data provided by banks, real estate agencies, and credit institutions, Brazilians and young people from Portuguese-speaking African countries (PALOP) are the main applicants for this program. Additionally, there are also some applicants from North America and Europe. However, although the policy is open to all Portuguese tax residents, different banks apply varying approval criteria for foreign applicants.
Portuguese nationals are preferred, while foreign applicants face stricter requirements
According to Novo Banco, around 10% of the approved home loans were granted to foreigners, of whom 90% were Brazilians, followed by Americans and young people from other countries. BPI and Bankinter have also received applications from foreign applicants, but in smaller numbers, primarily from Brazil. Some major banks, such as Caixa, Millennium BCP, and Santander, have not disclosed specific figures.
The credit institution Twinkloo has confirmed that banks are fiercely competing to attract young Portuguese applicants by offering discounts on interest rates, tax exemptions, and reductions on contract fees. However, for foreigners, even if they meet the home purchase guarantee requirements, they usually receive only 80% financing. Some banks also impose additional conditions for non-EU applicants, such as requiring them to have lived in Portugal for at least four years, or to demonstrate a stable long-term job and tax payment history.
Brazilians lead the applications
Thanks to tax exemptions and lower interest rates, the demand for home purchases has increased significantly over the past year. According to real estate agency ERA, since the beginning of this year, each branch receives an average of 10 monthly inquiries about home loans, while some high-demand branches receive more than 50 inquiries per month. The data shows that:
• 62.5% of applicants are Brazilians
• 19.2% are from PALOP countries, such as Angola and Cape Verde
• The remaining applicants include young people from France, Italy, Venezuela, and Ukraine
The president of ReMax, Beatriz Rubio, stated that many young foreigners are still unaware of this program, which explains the relatively low number of applications. According to her, as long as applicants meet the guarantee conditions, banks will assess loan approvals based on risk evaluation and repayment ability. However, the approval rate for foreigners is indeed lower than for locals.
Stable income and long-term residency increase approval chances
Currently, the possibility for foreigners to successfully obtain financing through this program depends on each bank's approval criteria. Although the policy itself does not impose nationality restrictions, some banks still prioritize Portuguese or EU applicants. Foreign applicants who hold Portuguese tax residency, have stable income, or have a long-term residence history in Portugal have a higher chance of approval.
As demand for housing continues to rise, property prices may keep increasing. For young buyers, carefully planning their home purchase within this policy window may become a crucial consideration.