Why buy real estate abroad: global perspectives, accurate calculation

Real estate remains one of the few stable long-term investment instruments in times of economic fluctuations. Against the backdrop of unstable inflation, currency fluctuations, and unpredictable stock assets, investments in “concrete” assets maintain demand, preserve capital, and generate income. However, the investment itself does not generate profit — money is not made by the asset itself, but by a well-thought-out strategy of its selection, purchase, and use. To understand how to choose real estate for investments, it is necessary to consider not only the price but also the expenditure structure, the growth prospects of the area, rental demand, and the property’s economy in figures.

Area Potential: How to Choose Real Estate for Investments

Location parameters determine the price per square meter, the speed of asset liquidation, and the stability of rental income. In cities with high business activity, properties near transport interchanges, universities, medical centers, and technoparks demonstrate an annual price growth of 8–12%. For example, in St. Petersburg in 2023, apartments near the metro station “Komendantsky Prospekt” increased in price by 17.3% due to large-scale construction and infrastructure projects. Similarly, the districts of “Dyatkino” and “Shushary” added an average of 11% due to an influx of young families and active construction.

In Moscow, the highest price growth was recorded in Novokosino, Kommunarka, and Vykhino thanks to new MCC stations and the expansion of highways. For instance, in Kommunarka, the average price increased from 197,000 rubles to 232,000 rubles per square meter in 18 months. Millionaire cities like Kazan, Novosibirsk, and Yekaterinburg show price growth within 6–10% annually in promising neighborhoods where IT parks, logistics centers, and new educational institutions emerge.

To accurately determine how to choose real estate for investments, an investor must analyze a complex set of factors: not only infrastructure and transport but also the structure of development, population density, current housing supply volumes, and the speed of apartment sales in the chosen location. Figures form the basis of the strategy.

Investment Format: Studio, Apartment, Condo, or Commercial Property

The property format dictates the target audience, level of expenses, and payback period. One-bedroom apartments remain the most stable type of rental property: the payback period in cities with a population of over 1 million is on average 11.2 years. Studios up to 25 m² in new buildings in Moscow yield 6.5–7.2% annually, especially with short-term rentals through aggregators. In Kazan, studios up to 20 m² in the residential complex “Salavat Kupere” pay off in 9 years with a yield of 7.8%.

Condos, despite the lack of registration and higher taxes, can yield 8–9% annually with the right location. For example, in the residential complex “Level Streshnevo” in Moscow, a 27 m² condo rents for 56,000 rubles per month with a price of 7.9 million rubles, providing a yield of around 8.5%.

Commercial real estate requires significant investments but provides a stable income stream. For instance, a 48 m² store in the residential complex “Svetolyubovo” in the Moscow region generates a net income of about 62,000 rubles per month, ensuring a yield of 10.1% with a purchase price of 7.2 million rubles. Formats with property management companies are one of the most comfortable ways to generate income, especially in the short-term rental segment: companies like “Sutochno Business” ensure an 80–90% occupancy rate per year.

Income Formula: How to Choose Real Estate for Investments

An investor relies on clear figures: income = rental flow minus tax, depreciation, and downtime. For example, a studio for 4.5 million rubles in the residential complex “Letniy Sad” is rented out long-term for 32,000 rubles, with utility and ongoing expenses totaling around 3,800 rubles, a self-employment tax of 4%, resulting in an annual yield of 6.2%. With a 15% price increase over two years, an additional return of 7.5% can be obtained upon sale, creating a total yield of around 13.7%.

An investor does not rely on miracles — an investment works if factors such as vacancy period (on average 1.5 months per year), furniture wear and tear, unforeseen repairs, and adjustments to the market rental rate are considered. In practice, only 22–25% of private investors in Russia conduct a full-fledged property economy, so it is important to use calculation formulas:

1. Yield = (Annual rent – expenses) / Purchase price.
2. Payback period = Purchase price / Annual net rent.

To correctly determine how to choose real estate for investments, scenarios should be calculated in advance: optimistic (full occupancy), basic (80% occupancy), pessimistic (downtime and rate reduction).

Legal and Financial Parameters: From Document to Tax

Mistakes during the transaction and operation stage can nullify even the most promising investments. Object verification includes:

1. Extract from the Rosreestr with the current ownership status.
2. Verification of title documents, especially when buying on the secondary market.
3. Commissioning certificate, building permit, technical passport.
4. Cadastral value — it affects the tax, especially when buying condos and commercial properties.

Starting from 2023, the tax rate on residential properties is up to 0.3% of the cadastral value, and for condos and commercial properties, it is up to 2%. For tenants through individual entrepreneurs or self-employed individuals, the tax rate is 4% (individuals) and 6% (legal entities). When selling real estate within five years, it is necessary to pay personal income tax at a rate of 13% on the profit if not using tax deductions.

To reliably determine how to choose real estate for investments, an investor should formalize contracts considering future tax perspectives: registering as an individual entrepreneur helps reduce the tax burden when renting out multiple properties, while the self-employment regime is suitable for renting out a single apartment.

Digital Infrastructure: Investments Without Physical Presence

A modern investor uses a digital ecosystem rather than a realtor. Platforms like DomClick, CIAN PRO, and SmartDeal automate property selection, market analysis, and location comparison. Smart algorithms consider profitability parameters, ownership costs, rental indices, and the presence of property management companies.

For example, the platform “Samolyot Invest” offers studio purchases with a yield starting from 7.1%, including rental and maintenance services. “PIK-Arenda” provides properties with full occupancy, repairs, and tenant support. Using CRM systems (e.g., RentMate or Flatsharing Pro) allows for rent payment control, reports, property status monitoring, and contractor management.

In a single application, an investor manages 3–5 properties, tracks income, conducts repairs, and signs contracts remotely. Investments are no longer dependent on geography and physical control. To precisely understand how to choose real estate for investments, digital services should be included in the strategy from the very beginning.

5 parameters when choosing a property:

1. Location with a stable price growth of at least 7% per year and active construction.
2. Property with full finishing, ready for rental, without legal risks.
3. Format up to 35 m² suitable for long-term or short-term rental.
4. Possibility of working through a property management company or digital platform.
5. Predicted yield above the inflation rate (6% and above per year).

Conclusion

Real estate does not forgive superficial choices. Only a comprehensive analysis of the area, accurate economic calculations, a format with predictable demand, and intelligent tax planning allow for building a successful investment portfolio. The answer to how to choose real estate for investments lies not in intuition but in strict logic, real numbers, data analysis, and selecting a strategic management partner.

Portugal continues to attract investors from all over the world due to its favourable tax system, warm climate and stable property market. Purchasing a home in this country entitles you not only to a comfortable stay, but also to additional benefits with proper planning. Before buying, it is necessary to carefully study what property taxes Portugal imposes on residents and non-residents, as well as how to optimise the financial burden.

Portugal’s tax system: general principles

Portuguese tax legislation is governed by the Serviço de Finanças, which establishes compulsory payments for owners. The structure of the system includes both mandatory one-off contributions and annual fees depending on the characteristics of the property.

There are three main taxes to consider when purchasing a home:

1. IMT (Imposto Municipal sobre Transmissões Onerosas de Imóveis) – for property transfers, charged on purchase.
2. IMI (Municipal Property Tax) – ежегодный.
3. IS (Imposto de Selo) – stamp duty, which is paid when a transaction is concluded.

In addition to these fees, tax residency status affects the amount of mandatory deductions.

Buying a property in Portugal: taxes and additional costs

There are significant costs involved in formalising a property title. The first mandatory fee in Portugal is the IMT property transfer tax, which varies from 0% to 8% depending on the price of the property and its type. For example, when buying a property worth up to 92,407 euros, the fee is not charged, while for luxury apartments – over 1 million euros – the rate will be 7.5%.

Next is the stamp duty (IS), which is paid when signing the sale and purchase agreement. It is calculated as 0.8 per cent of the value of the property and is payable in a lump sum. In addition, it is necessary to take into account notary and registration fees, which can vary from 500 to 2,000 euros depending on the complexity of the transaction.

Annual property tax in Portugal (IMI)

Once contracted, owners are required to pay an annual fee known as IMI. Its rate is:

• 0.3% to 0.45% for urban facilities,
• 0.8 per cent for agricultural land,
• 7.5% for real estate registered in offshore jurisdictions.

The amount of tax is based on the cadastral value, not the market price of the property. For example, if you own a flat in Lisbon with a price of 200,000 euros, the annual fee will be between 600 and 900 euros. There is a benefit for new residents: exemption from IMI for 3 years for dwellings up to 125,000 euros if they are used as a primary residence.

Portugal’s exceptional tax regime: NHR programme

To attract foreign capital, the government has developed the NHR (Non-Habitual Resident) system to minimise the tax burden on income earned abroad.

The main benefits are:

1. 0% inheritance and gift tax on real estate in Portugal for immediate family members,
2. 10% commission on pension payments,
3. 20% levy on income from the activities of highly qualified professionals (e.g. IT, finance, medicine).

NHR status is granted for 10 years, after which the commitment is reviewed.

Property taxes for non-residents in Portugal: features and key rates

Foreign investors acquiring property in the country face different tax conditions than local residents. Taxation varies depending on the nature of ownership of the property – rental, sale or long-term ownership without income. The main liabilities include tax on rental income, capital gains on sale and annual property tax (IMI).

Charge on rental income: 28% of profit received

If the property is rented out, a non-resident of Portugal is liable to pay 28% tax on rental income. The amount is charged on the net income after deducting allowable expenses, which include:

1. Utility bills (if paid by the landlord).
2. Housing maintenance and repair costs.
3. Fees to management companies (if the property is rented through an agency).

For example, if you rent a flat in Lisbon for €1,500 per month (€18,000 per year) and have allowable expenses of €3,000, your taxable income would be €15,000 and tax would be €4,200. There are no progressive tax rates for non-residents, so optimisation of payments is only possible through proper cost accounting or registering the property through a legal entity.

Capital Gains Tax: 28% of the difference between purchase and sale

When selling property, non-residents are required to pay a commission, which is calculated as the difference between the purchase and sale price less allowable expenses.

Example of calculation:

1. The original cost of the flat is 300,000 euros.
2. The selling price is €450,000.
3. Costs for renovation and legalisation of the transaction – 20 000 euros.
4. The taxable base is EUR 130 000 (450 000 – 300 000 – 20 000).
5. The final tax is €36,400 (28% of 130,000).

Residents of the country can reduce the tax burden if they reinvest in new housing, but there is no such benefit for foreign investors.

Tax liability that arises each year

The fee is charged annually and is calculated on the basis of the cadastral value of the object.

IMI rates depend on the location of the dwelling:

1. For urban properties, 0.3%-0.45%.
2. For agricultural plots, 0.8 per cent.
3. For objects registered in offshore jurisdictions – 7.5%.

For example, if the cadastral value of a flat is €250,000, the IMI would be €750-1,125. The authorities of some municipalities provide incentives to new owners, exempting them from paying the commission for 3 years, but this rule does not apply to non-residents.

Investing in real estate: benefits for investors

Portugal continues to attract foreign investors due to sustained growth in property prices, strong rental demand and favourable tax conditions:

1. High rental demand. The country’s main cities of Lisbon, Porto and the Algarve remain popular with tourists and expats, keeping rental demand strong. In central Lisbon, the average rental rate for a one-bedroom flat is €1,500-2,000 per month, giving an annual yield of 6-10%.
2. Golden Visa Programme. Investors purchasing property in the country for an amount of 500,000 euros or more (or from 280,000 euros in regions with low population density) can apply for the Golden Visa – a residence permit with the possibility of obtaining citizenship after 5 years.

Results

Foreign investors planning to buy property should take into account the peculiarities of taxes in Portugal. Commissions for non-residents in the country are higher than for residents, but competent use of preferential regimes allows to minimise costs. Optimisation of tax liabilities requires a professional approach and planning, so it is recommended to consult with lawyers and qualified specialists before buying.