Portugal is a firm favourite with UK buyers, and a 2026 tax change makes planning the money side more important than ever. You agree a price in euros and pay it over one to three months, while your money sits in pounds, so the exchange rate decides how much the property really costs you in sterling, on top of taxes that have just risen for non-residents. The way to keep control is to plan the currency early, budget for the full euro cost, and fix your rate with Medlock & Thames rather than converting at your bank on completion day. This guide covers the currency side; for the full framework, see our guide to buying property abroad.
How does the Portuguese buying process affect your currency planning?
The Portuguese timetable has a clear shape. A small reservation deposit often takes the property off the market while your lawyer runs preliminary checks. You then sign the binding promissory contract, the contrato de promessa de compra e venda or CPCV, paying a deposit of typically ten to twenty per cent. Under Portuguese law the deposit carries real weight: if the buyer withdraws without cause they forfeit it, and if the seller withdraws they must return double. Completion, the escritura, then takes place before a notary or at a Casa Pronta service centre, usually thirty to ninety days after the CPCV, when the balance is paid by bank transfer. That gap between the CPCV and the escritura is the window in which the rate can move, so it is the period your currency plan needs to cover.
How much can the euro move before you complete?
Enough to matter on any six-figure purchase. In May 2026 the pound traded at around 1.158 against the euro, according to European Central Bank reference rates, and a move of several cents over a few months is normal. On a €375,000 home, the difference between roughly £323,800 at 1.158 and about £340,900 if the pound slipped to 1.10 is more than £17,000, for a property whose euro price never changed. You are not trying to forecast the market; you are removing that uncertainty from a purchase you have already committed to. A forward contract, which fixes today's rate for a future settlement date, lets you sign the CPCV knowing the sterling cost. For the mechanics, see how a forward contract works.
What will a Portuguese purchase cost beyond the price?
This is where 2026 changes the picture for UK buyers. Under the Construir Portugal package approved in February 2026, non-resident buyers of residential property now pay a flat rate of 7.5 per cent in transfer tax, the Imposto Municipal sobre Transmissões or IMT, regardless of the property's value. That is roughly double what many buyers would have paid under the old progressive scale, and because UK buyers are non-resident, it applies to them. On top of the IMT, every buyer pays stamp duty, the Imposto do Selo, at 0.8 per cent, plus notary, registration and legal fees. Total acquisition costs for non-residents now sit at around nine to eleven per cent of the price. Because all of these are euro costs, a weaker pound raises them too, so it is sensible to fix your rate across the whole budget rather than the deposit alone.
Which currency tool should you use?
You have three practical choices for a Portuguese purchase. A spot transfer converts at the rate on the day, which leaves a large completion payment exposed. A forward contract fixes today's rate for the future date, so you can sign the CPCV knowing the sterling cost, and for most buyers it is the right tool for the deposit and the balance. A regular payment plan suits ongoing euro costs, such as condominium fees or local taxes, once you own the property. Fixing the purchase with a forward and running the rest through a regular plan is the combination most buyers find works.
When should you fix your euro rate?
As soon as you are committed, which in Portugal usually means at the CPCV when the deposit falls due. In our experience, UK buyers focus on the property and only think about the exchange rate once the escritura is scheduled, by which point there is little room to plan. Fixing the rate at the CPCV stage means the figure you budgeted is the figure you pay. If you are still searching, open an account with a currency specialist in advance so you can act within hours when your offer is accepted.
How do you move the money to Portugal safely?
You will usually need a Portuguese tax number, the NIF, before you can transact, and the balance is paid by bank transfer at the escritura, so funds must arrive cleared and on time. A currency specialist can deliver euros to your lawyer or the notary on the date required, which avoids the delays and weak rates of sending a large sum through a high street bank at short notice. For a transfer of this size, speak to Medlock & Thames before you send anything.
Frequently asked questions
Do UK buyers pay more tax in Portugal now?
Yes. Since the Construir Portugal package in February 2026, non-resident buyers pay a flat 7.5 per cent IMT regardless of value, where residents buying a main home may pay less under a progressive scale. UK buyers are non-resident, so the flat rate applies.
When is the deposit due in Portugal?
At the CPCV, usually ten to twenty per cent of the price. That is typically the right moment to fix your rate for the balance due at the escritura.
Will I be taxed on a currency gain?
Possibly, depending on your circumstances, as currency can interact with UK and Portuguese tax rules. Take advice from a qualified tax adviser; this guide covers the currency and transfer side only.
Do I need a NIF to buy in Portugal?
Yes. You need a Portuguese tax number, the NIF, before you can transact, and usually a local lawyer to handle the checks. The purchase funds are paid by transfer at the escritura, and a currency specialist can deliver euros to your lawyer or the notary on the date required.
Related articles
This guide is part of our overseas property series. For the full framework, read Buying Property Abroad: A Currency Guide for UK Buyers. See also our guides to how a forward contract works, what it costs to transfer money abroad, and our country guides for France, Spain, Greece and Hungary.
