Guide · Holiday homes

A holiday home in Portugal: the Algarve, Silver Coast, Madeira and more

As of November 2026 · about 7 minutes' read

Portugal is small but varied: the sunny coast of the Algarve, the rough Atlantic of the Silver Coast, the wide-open Alentejo and Madeira, where it is spring almost all year. Driving from Germany is too far. You will almost always fly, so how well the airport is connected matters. This overview helps you narrow down your choice.

Three questions before choosing a region

• How will you get there? Faro, Lisbon, Porto and Funchal have direct flights from many German cities, fewer in winter. Factor in the drive from the airport to the house. In the countryside little works without a hire car.
• When do you want to be there? The Algarve and Madeira have mild winters and are good for wintering. Further north the Atlantic gets cooler and the winter rainy.
• Do you want to let it? Then the length of the season matters, and above all the municipality's rules. In Lisbon, Porto and parts of the Algarve a new holiday-letting registration is hard or impossible to get.

The regions at a glance

The figures are rough guides. Prices vary widely within each region: right on the sea or in well-known places you pay many times what you would inland.

The Algarve

The Algarve is Portugal's best-known holiday region and has been popular with Germans, Britons and the Dutch for decades. The west around Lagos and Sagres has cliffs, coves and a younger crowd. In the middle are the big resorts and the “Golden Triangle” of Vale do Lobo and Quinta do Lago, one of the most expensive areas in the country. The east around Tavira is quieter, with lagoons, flat sandy beaches and somewhat lower prices. Inland you will find old farmhouses (“monte”) with land. Check carefully there whether the plot is registered as building land (“urbano”) and whether all extensions are approved. Water is scarce in the south, and in dry years there are restrictions.

Lisbon, Cascais and the Silver Coast

Lisbon and Cascais: An apartment in Lisbon or on the coast at Cascais and Estoril combines city and beach. Prices are among the highest in Portugal, and new holiday lets are blocked in many Lisbon neighbourhoods. Sintra, with its hills and palaces, is cooler and damper than many expect.

Silver Coast: North of Lisbon lies the Costa de Prata, with places such as Ericeira, Peniche, Nazaré and Óbidos. The Atlantic is rough here, the water cool, and the waves draw surfers. Prices are well below the Algarve. Summers are pleasant rather than hot, and fog often hangs over the coast in the morning. For anyone looking for peace and nature rather than a beach holiday, the region is a good alternative.

The Alentejo

The Alentejo is the large, sparsely populated region between Lisbon and the Algarve. Cork oaks, vineyards, white villages and plenty of space. Inland, houses and land are cheap, but summers there are very hot, often over 40 degrees. The coast is wild and barely built up. Around Comporta prices have risen sharply because of international buyers; further south on the Costa Vicentina they are more moderate. Much of that area is a nature park, so building is hardly possible. In the countryside you must keep a strip around your house clear of vegetation to protect against wildfires. This is the owner's duty.

Porto and the north

Porto is lively, cheaper than Lisbon and well connected. In the Douro valley vineyards line steep slopes, and in the Minho on the Spanish border it is as green as Ireland. The north suits those who enjoy food, wine and landscape more than beach holidays: the sea is cold and winter brings a lot of rain. Inland you will find old granite houses at low prices, often in need of renovation. Budget for insulation and heating, which many houses lack.

Madeira and the Azores

Madeira: The island is known for its even climate, around 18 to 25 degrees all year. It is steep and green. Many houses sit on slopes with a sea view, and access roads are narrow. Prices have risen markedly in recent years, especially in Funchal and on the sunny south coast. Madeira is popular with long-stay visitors and digital nomads.

Azores: The archipelago in the middle of the Atlantic is green, volcanic and quiet. Prices are lower than on Madeira. The weather changes quickly and it rains often. The journey takes time, and direct flights from Germany are seasonal only.

Holiday letting: the rules

Holiday letting in Portugal is called “alojamento local”, or AL. The rules were tightened in 2023 and partly relaxed again in 2024. Since then, the municipalities decide most things:

• Registration: Every holiday let needs an AL registration with the municipality. The number must appear in every listing.
• Municipalities can set limits: Municipalities can designate areas where no new registrations are granted. Lisbon and Porto do so in many neighbourhoods. An existing registration does not automatically pass to you when you buy.
• Apartments: For apartments, the owners' association can, under certain conditions, object to holiday letting. Check the building rules and ask the managing agent.
• Guest registration and tourist tax: You must report foreign guests to the authorities. Many municipalities, such as Lisbon, Porto and towns in the Algarve, charge a tourist tax, which you collect.
• Taxes: Rental income is taxed in Portugal. Your home country may also take it into account. Germany, for example, exempts it and, for property in the EU, does not use it to set the tax rate on your other income either; you still have to declare it.

Before you buy, ask the municipality (“Câmara Municipal”) whether a registration is possible for the address. How the purchase itself works and what it costs, including the new transfer tax for buyers not resident in Portugal, is explained in Buying a house in Portugal. The purchase cost calculator works out the costs for your price.

This article gives a general overview and is not a substitute for legal or tax advice. Prices, taxes and letting rules change and differ from municipality to municipality. Check them locally before you buy.