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Buying : Common Scams & Red flags

When planning to rent or buy property anywhere in the world, you are potentially susceptible to possible frauds and BIG red flags in the real estate market. Unfortunately, Portugal is no different and with the country currently being a hotspot for foreign real estate investment, chances of fraud also tend to increase.

Today we’ll cover some red flags you should be aware of when considering renting or buying a property in Portugal.

Buying Property


One thing you should know right off the bat is that the Real Estate Market in Portugal is severely unregulated.

This lack of diligence results in some listings advertised not even being ready to be sold for whatever reason - sometimes is the lack of proper licensing papers, sometimes things are put up for sale without the authorization of all of the owners, etc.

Another thing quite frequent is illegal constructions and extensions (I’ll get more into extensions in the next point) not being disclosed to the buyer.

Illegally built pools are usually the star culprits of this because of how frequent we encounter this. If you buy a property with an illegal pool, you will have to demolish it.

However, the worst thing it can happen to the buyer is finding out later that the whole house was illegally built and unfortunately in some cases it may not even be possible to legalize it.


Let’s say the official property listed is a 2 bedroom town house but the previous owners illegally extended it to make it a 4 bedroom house. When I say illegally, I mean that these alterations were not declared and licensed in the Town Hall. In these situations, the whole property is technically now illegal and although you can register these alterations, the process of it is very complicated and more often than not, it won’t even be possible to license them.

We always recommend having a lawyer working with you when you are in a buying property process.


There is a Portuguese law that states that any debts regarding a property are to be passed along to the next owner. Any property with debts and mortgages associated with it will be “inherited” to you if you buy that property, for this reason it is extremely important that you make sure everything is liquidated before any transaction happens. This can only be done by legal professionals.

When it comes to mortgages usually it’s the Bank that participates in the transaction and in the confirmation that a mortgage has been terminated. For this reason, when you buy a property with a mortgage, you will always see a Bank agent at the final deed.


Often you will see ads for properties that still have tenants and it’s usually tenants protected by old contracts which are very hard to terminate. This could potentially be a problem, unless you have an agreement present beforehand.


One thing to keep in mind if you are interested in a particular auctioned property is that sometimes it’s not the whole property that is being auctioned, just part of it. This can happen in situations where a property is inherited by more than one person, so multiple people own the house, which means that if one of those people are in debt, only their part is being auctioned off. It can happen to half of the house or even ⅙ or more of the house.


While not really a scam, it’s definitely something that you should keep an eye out for. If you buy a property in a project stage, while it can be much cheaper, it can be a big risk for two reasons:

  1. Construction timelines are rarely met, so construction will most likely take longer than it is expected to.

  2. If the business selling goes bankrupt, you will lose your money and you cannot get it back.

Not to say that this is not a good deal, it can definitely be, but you must be willing to accept the risk of waiting for the construction to be complete and to make sure the company selling is absolutely trustworthy and safe.

Another thing to point out is that listings for properties not finished, will often be advertised with 3D images of the final product, which can sometimes be misleading.


Sometimes businesses buy properties and open real estate related subsidiary companies because it is much more profitable and advantageous tax-wise to have a property listed under the business name.

The issue with this lies solely on the fact that if they decide to sell the company but the property, they will convince potential buyers into buying the company instead of the property. This is a huge red flag because buying the business can bring a lot of problems like debt and taxation problems. It is fairly often to see this happen with tax havens and offshore businesses, when a business is registered in a tax haven but sometimes advertise the property but in reality you are being sold the company.


In Portugal getting a real estate license is honestly too easy and the process is facilitated.

I say the process is facilitated because all you have to do is a small training in misappropriation of funds. Furthermore, there is no verification of qualifications of the potential agent whatsoever.

It’s important to check the licensing of the agency and agents you are planning to work with and you can do so HERE


These red flags and oversights are something that if missed can cost you a lot of money! That’s why we always stress the importance of hiring legal professionals to assist you both with rental, buying and investing processes.

With Savvy Cat Realty we have a strict business model when it comes to spotting these red flags and scams and we work closely with our legal team to make sure our clients are not being scammed, never losing unnecessary money or simply just to avoid all the headaches.

We work for YOU and our goal is to be your trustworthy right hand in Portugal.


Start simple and without compromising! A Call with Ana is a great way to clear all your doubts and concerns around relocating and Real Estate in Portugal.


Hope this article was helpful, any questions you might have feel free to contact us! We are always available at if you need any assistance ;)



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