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Buying Guide Portugal 2019 Flipbook PDF
Buying Guide - Portugal 2019
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Buying Guide
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Buying Guide to
Portugal WITH
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Buying Guide
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WHERE TO BUY AND WHAT TYPE OF PROPERTY TO CHOOSE
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Buying Guide
Portugal Introduction to Portugal ortugal is the third most popular country for British buyers looking to purchase an overseas property, and is having a bit of a moment as far as attracting international buyers. There are currently has over 60,000 British expats living inland and on its Atlantic and Mediterranean shores - we have long been attracted to its climate, picturesque sandy beaches, fantastic golf courses and the genuinely welcoming attitude of its nationals that makes Portugal such a natural choice for Brits looking to purchase a home in the sun. What has changed is that many other nationalities have also begun to discover this - along with the relatively new tax benefits of the country - so the Portugal of today (or certain parts of it) is much more cosmopolitan that it was a decade ago. Portugal’s main cities, Lisbon and Porto, are prime examples of this, but
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WHERE TO BUY AND WHAT TYPE OF PROPERTY TO CHOOSE
also the Algarve, which also caters for those looking to push the boat out too, with many stylish villas and other luxury homes up for sale across the nation. That said, there is something wonderfully simple, laid-back and authentic about the Portuguese way of life and it’s possible to live very affordably in many parts of it, eating locally caught fish, and drinking wines of the region. Those venturing to the north of the country will discover attractive and mountainous countryside where villagers still enjoy a distinctly oldfashioned way of live. Southern regions, on the contrary, bask in globally renowned beaches and a more laidback way of living. It really has everything. Economically, Portugal has been emerging as a confident, reliable and industrious nation, unlike perhaps Italy. It has been creative in solving its problems, showing the world how
to attract international buyers via its “golden visa” and tax-friendly policies, for example, which are gaining new residents from countries such as France and China. For anyone planning to buy a holiday home now which may become a permanent home in later life, then post-Brexit there may be a few changes and you could be required to take out private healthcare rather than having free access to the state system, but your right to own and enjoy your property in Portugal will continue to be unaffected. ¤
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Eligible for Portugal’s non-habitual resident regime? Find out how much tax you could save. The non-habitual resident regime provides significant tax advantages for your first 10 years in Portugal, and can be an opportunity to dispose of UK assets and take advantage of UK pension freedoms. Everyone’s situation is different so you need personalised advice. Blevins Franks provides integrated tax, investment and pension advice and creates tailored solutions designed to provide peace of mind.
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Buying Guide
Portugal Portugal & Brexit he UK is still a fully paidup member of the EU so if you are planning to move to Portugal permanently there is a very good argument to do so before we leave. Under international law, you will have been deemed to have acquired rights by simply being resident in Portugal and it is highly likely you will retain these rights once we leave. While the host country is under no obligation to provide services such as healthcare, it is again likely the UK will reach an agreement with other EU countries for a reciprocal arrangement as it would be in the interests of the EU to look after their citizens given the 3.5 million EU nationals in the UK. If you’re buying a holiday home
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and not planning to live in Portugal permanently then very little changes, once the UK leaves the EU it would be possible for Portugal to impose additional or higher taxes on British owners, for example on a house sale, because the basic right for a Brit in the Algarve to enjoy the same tax treatment as a Portugal national will have been lost. What is unlikely however is that Portugal would impose anything overlydraconian to deter British buyers, given we account for a substantial proportion of Portugal property purchases by overseas buyers. At the time of writing it has made very positive statements about the future treatment of Britons, deal or no deal. ¤
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Y O U R P R O P E R T Y L A W E X P E R T S I N P O RT U G A L
Paula Meireles ENGLISH-SPEAKING PORTUGUESE PROPERTY LAWYER
H O W C O N V E YA N C E I S C A R R I E D O U T I N P O RT U G A L IDENTIFYING THE MAIN DIFFERENCES REGARDING THE PROCESS IN OTHER COUNTRIES P R O P E RT Y A N D F I S C A L M AT T E R S C O M M E R C I A L L AW FA M I LY L AW
Paula Meireles Law Office, Rua do Barranco, Urbanização Colina Verde, Lote 10, Loja B 8400-508 Carvoeiro, Lagoa, Algarve, Portugal
Tel: + 351 282 350 010 | Fax: + 351 282 350 019 Email: [email protected], [email protected]
Buying Guide
Portugal Contents 02 Introduction to Portugal 03 Portugal and Brexit
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Popular regions of Portugal Algarve Algarve Case Study 50 Years of Golf on the Algarve Algarve Case Study Silver Coast Lisbon Lisbon Case Study Madeira Madeira Case Study Porto A Market Snapshot A Buyer’s Guide to moving to Portugal Why are you buying? To buy old or new? Viewing Trips explained
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The Purchase Process Property Tax in Portugal Getting a Mortgage Mortgage Conditions Legal Guide to buying in Portugal Ongoing cost of ownership Transferring your money abroad
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4 Lifestyle Factors to Consider Shipping your belongings to Portugal Healthcare Wills & Inheritance Tax Retiring to Portugal: Extra considerations (pensions, settling in & healthcare)
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UK 0208 0047878 | PT +351 964991646 Lorna Watts Managing Director
Let our team locate your ideal property in the sun
Algarve Team Properties Real Estate Agency | Covering the Algarve | English Speaking Agents | AMI8373
We are a fully Licenced Real Estate Agency based in Albufeira and Loule and have been in operation since 2003. Predominantly an internet based company, which allows us to tailor our client's requirements perfectly, and pre-arrange a Property Tour with only suitable properties that meet or exceed the client’s needs. Specialists in the Sale and Re-Sale of good solid Rental Properties for buyers looking for a great Investment and a healthy annual Rental income. Our team offer a friendly and Professional Experience to all our clients, including advice on all aspects of the buying process. Algarve Team Properties are supported by a great team of Lawyers, Banking institutes and accountants. We work with many Well Established Holiday Resorts who have both Apartments and Villas for sale which are ideal for holiday Rentals, providing buyers with a great investment opportunity! Call or email us for further information. Let us help to make your dream a reality!
www.algarveteamproperties.uk
[email protected]
Buying Guide
Portugal Popular Regions of Portugal panning roughly 600km from north to south and 200km east to west, Portugal certainly has a lot to offer to British buyers. It’s a country submerged in vibrant and modern cities (most notably the technology hotspot of Lisbon), tranquil fishing villages and local communities that hold true to its traditional roots, such as those situated on the island of Madeira. Portugal is a country that is truly unique both geographically and culturally. As the westernmost country of mainland Europe, it contains some of the world’s most stunning golf courses, globally-recognised beaches on both its Mediterranean and Atlantic coasts, and a climate that matches southern Spain and even southwest Australia (believe it or not). So, with many benefits to living in Portugal, where exactly do you start your search? If you’re looking for a bit of inspiration, you can read up on the most popular locations throughout this guide. ¤
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Algarve Silver Coast Lisbon Madeira Porto
Portugal truly has everything to offer for aspiring overseas homeowners; fantastic food; stunning sceneries and picturesque properties – what else could you ask for?”
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HOW TO BUY PROPERTY IN PORTUGAL
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Love Portugal, Buy Portugal
LOOKING TO BUY PROPERTY IN PORTUGAL? Whether you are looking for a villa on the coast, a city centre apartment or a plot of land to build your dream home, we have access to thousands of properties throughout Portugal.
Buy Portugal focus on the sale of property on the Silver Coast, Algarve, Lisbon, Blue Coast, Porto and throughout Portugal. We are long established property consultants with over 12 years’ experience in the Portuguese property market. Operating completely independently of any owner or developer, Buy Portugal will assist you in finding a property, most suited to your requirements. Whatever kind of property or budget, the team are on hand to help and guide you on your property adventure - call us and see!
Tel: (UK) 01925 414422 | www.buyportugal.com
Buying Guide
Portugal The Algarve
he Algarve remains the major draw for British buyers in Portugal by some stretch. Not only does it offer the fantastic Mediterranean climate, but it’s one of Europe’s top golfing destinations, along with boasting fabulous beaches along its 120km length. A two-hour flight from the UK, it’s also an accessible weekend destination, with a good supply of flights into Faro airport. Whether you want high-class restaurants, five-star holiday resorts, dramatic beaches, traditional fishing villages or authentic inland villages, it’s got it all. It attracts fewer tourists than the Costa del Sol in Spain, and is much less developed as a result. This is part of the appeal for British families, retirees and holiday home buyers. But where are the hotspots for property hunters? The Algarve divides naturally into three sections: Eastern Algarve, Central
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Algarve and Western Algarve and prices vary, along with the landscape.
Eastern Algarve This section, between Faro and Spain, is the least developed of the three tranches of coastline. Characterised by the sandbars and lagoons of the Ria Formosa Natural Park, this area’s principal hotspot is the former fishing of Tavira that has evolved into a cosmopolitan river side town. Increasingly sophisticated fish restaurants line the river banks of this attractive town with atmospheric Moorish style buildings and from here you get the boat out to the sandbanks. In Tavira you should expect to pay from around €100,000 for a one-bed apartment or €150k plus for a villa. Other hotspots include Vila Real de San Antonio (good marina) and Castro Marim for those who want to be close to the Spanish border. The latter is a small
village with a lot of history and you can buy a three-bed golf villa on Castro Marim Golfe resort for under €500k.
Central Algarve The central Algarve region around Vilamoura is especially popular with buyers, and this, the most developed and highly populated section, offers many possibilities. Vilamoura itself, a purpose-built resort with a 1,000-berth marina and golf course at its heart, is home to luxury hotels, a casino, sports facilities and beach clubs. It’s close to the airport and you can pick up a large modern villa with frontline golf views for €600,000.
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Buying Guide
Portugal The Algarve (continued) Nearby Albufeira is a handy 30-minute transfer from Faro airport: there’s an old town of cobbled streets lined with restaurants, bars, cafes and shops; an attractive marina with and sandy beaches - plus a new fashionable W branded hotel resort being built during 2019 and selling apartments too. The town offers something for everyone, budget-wise, and is a holiday rentals hotspot (according to HomeAway.co.uk) because it attracts both snowbirds in winter and families in summer. You can buy a one-bed apartment from around €130,000, twobeds from around €150,000, or nearer €500,000 for a quality three-bed with sea views in the Old Town. Inland, Loule is rather a popular town to be near. Here, two-bed apartments cost around €150,000, or a small detached villa for €200,000. The nearby busy town of Almancil is handy for both Faro airport (15 minutes) but also the two big-name resorts: Quinta do Lago and Vale do Lobo. Properties in Almancil don’t come with the premium of being on a worldclass resort: you can buy a three-bed townhouse for €250,000-€300,000. At the upmarket golf resort of Quinta do Lago entry level is around €165,000 for an apartment, €500k for a villa (up to €20 million+), although you can get some great individual price reductions. At Vale do Lobo, there are some striking contemporary style villas (typically €5m-20m) and entry level is a little higher: around €250,000.
Western Algarve Generally viewed as a bit less developed than the central Algarve, especially as you head to the Atlantic seaboard, this area is one of lovely fishing villages and wide, sweeping beaches. Lagos (pronounced Lar-gosh) is the stand-out hotspot – an attractive yearround town with great fish restaurants, lively night-life, great town beach and a reasonable sized ex-pat community. Prices rose faster during the boom (from a lower base) than in the Central Algarve and fell faster during the subsequent bust – maybe 30-50 per cent. You can buy a one-bed apartment for around €100,000 or a villa from around €250,000. Nearby Praia da Luz is a very popular resort, with similar pricing, and great for families. If secluded fishing villages are your thing, check out the laid-back little town of Salema where the beach is its focal point (three bed townhouses from around €250,000); or Burgau and Sagres. Or those seeking a rural retreat might check out Monchique, an engaging market town of cobbled streets and a ruined monastery in the Serra de Monchique. It’s so far north that prices drop quite considerably: a two-bed villa costs from around €120,000 and there are typical Algarvean townhouses with white-washed walls and bands of colour. ¤
Discover more of the Algarve by using the interactive map on aplaceinthesun.com
WHERE TO BUY AND WHAT TYPE OF PROPERTY TO CHOOSE
HOW TO BUY PROPERTY IN PORTUGAL
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LOOKING TO LIVE IN
CARVOEIRO PORTUGAL Selling with us:
Buying with us:
Nuriza Portugal Properties is a real estate agent that keeps in regular contact with their sellers to ensure every opportunity is taken to attract the prospective buyer. Our team can arrange for one of our property listing experts to advise you on:
Nuriza Portugal Properties know the amount of time and effort which goes into searching for the perfect property. This is why we have created three easy steps:
• Your property’s market value • Support in arranging all required legal documentation. • Photography and videos of your property • Marketing your property online • Promote your property at property shows and within other foreign markets
• Step 1. Pinning down the ‘location’ (this often is the heart of the matter) • Step 2. Viewing all ‘property’ matches • Step 3. Providing all necessary ‘information’ in order to purchase property in Portugal. Following these steps along side one of our property experts, we are sure to find the one!
Contact us now and get your property tour booked! Our experts are waiting to help!
www.nurizaproperties.com Mobile: +351 933 463 083 | +351 282 148 888 | [email protected] Urb. Colina Verde Lote 10 - Loja C, 8400-508 Carvoeiro - Portugal Nuriza - Portugal Properties | AMI: 11516 | Nuriza - Properties, Sociedade de Mediação Imobiliaria Unipessoal Lda
Buying Guide
Portugal
CASE ST UDY
We bought on the Algarve to enjoy early retirement Martin and Diane Bee moved to the Algarve from Cheshire in autumn 2016. They found their home – a quinta-style villa in Loulé which they share with their two cats – through Ideal Homes in spring that year. Diane has since started working locally, while Martin, an IT contractor, has been commuting back to the UK, although not for much longer. “We chose Portugal as it ticked all the boxes for somewhere warm, cheap and enjoyable to enjoy early retirement, and things are turning out well. As alternative options, we looked as far as Central America and Borneo as well as other European countries,” Martin says. “Since buying our villa, which had a purchase price of €305,000 and has its own pool, we’ve pretty much gutted and modernised the whole of the interior. The only things we haven’t changed are a bath and one air-con unit. We did some of the work ourselves; otherwise we used local
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tradespeople, which we found relatively easily through word-of-mouth. “We feel lucky with the location we picked. Loulé offers easy access to the airport, coast and hills, while being relatively tranquil and not too touristy. There are some holiday homes here, but most of the properties around us are lived in. “Right now, I’m still working, which means commuting back to Manchester from Faro every other week, typically flying out on a Monday and back on the Thursday or Friday. But my plan is to retire and to really start enjoying life here. Next week I’m having a meeting with someone about the non-habitual resident (NHR) tax scheme, which offers new residents special tax benefits. Diane found a job soon after we moved over and has worked for the local estate agency for about a year now, something she really enjoys. Our income also includes rent from buy-to-let properties in the UK.
HOW TO BUY PROPERTY IN PORTUGAL
“One of the things that really struck me about living here is how cheap it is. In the UK our council tax used to be around £200 a month, while here it’s about £400 for the whole year. We don’t have gas, our water comes from our own borehole and our electricity bills are about £70 a month, so you can see how cheap our living costs are. “Becoming a resident was a straightforward process, helped by the fact that most people around here speak a bit of English. In fact, when Diane went to the local doctor’s recently, she was seen by a Russian GP who spoke a few languages. When I’ve retired, I plan to do a two-week crash course in Portuguese, to help get me started. “We’re not worried about Brexit. Portugal indicates that expats on both sides will be looked after. I don’t think Portugal can afford to lose all the revenue that expats bring here”. ¤
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Buying Guide
Portugal Over 50 years of golf on the Algarve he golden anniversary of golf has been celebrated on the Algarve and the region’s lush fairways are busy. Golf might be declining as a sport worldwide, but around 1 million rounds of golf sre still played on the Algarve. Fifty-odd years after Penina Hotel & Golf Resort in Portimão opened as the Algarve’s first golf course (designed by Sir Henry Cotton, the three-time Open champion), there are now more than 40 to choose from – with obvious benefits for local homeowners. “You are rarely more than a 10-minute drive from a fairway in the Algarve,” said Chris White, founding director at Ideal Homes Portugal. “Our clients vary from those looking for a villa with golfing access to golfers who buy in lesser-known villages. “You could have a budget of several million or just over €120,000 and still have instant access to perfect greens. Almost all of our clients want to know where the nearest course is and not just because they play, but often they are
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letting the house and golf attracts more holidaymakers.” With the property market on the up and attractive mortgages, we look at the best buying spots for an Algarve golf pad.
Golden Triangle and central Algarve For proximity to the largest choice of championship golf courses in the Algarve, and arguably in Europe, look no further than the “Golden Triangle”. It includes the upmarket resorts of Vale do Lobo, with two courses, Quinta do Lago, with three courses, and Vilamoura, one of Europe’s largest single residential tourist communities, with five courses. The short transfer from Faro airport makes these resorts even more appealing. “Quinta do Lago is one of the most highly regarded golf and residential developments in Europe,” continued Chris, who sold a villa in Vale do Lobo to celebrity entrepreneur Duncan Bannatyne.
“When playing golf on these resorts you could brush shoulders with the rich and famous, and off the course these stunning locations are beachside, offering the perfect place to relax.” Multi-million-euro villas are the jewel in the crown of Quinta and Vale do Lobo, but apartments and townhouses are available for less than €500,000, depending on location and proximity to the fairways and beach. Vilamoura is as much about being by the sea as on the fairway. “It has Portugal’s largest and most popular marina and some of the finest beaches in Europe,” said Tony Santos at Re/Max Vilamoura. “We have a great product there, the Residences at Victoria Clube de Golfe, which caters to both golfers and the leisure market.” Victoria Clube de Golf is one of five championship courses in Vilamoura created by the developer Oceanico. Another is Millennium, also with a choice of frontline golf homes. The benefits of being on a resort include direct access to golf, often with discounts on green fees, and other amenities, plus the availability of complete property management. There is also the option to buy outside a resort and still be just a short drive from golf courses. Still in the central Algarve but away from the Golden Triangle, prices are noticeably cheaper. Chris White tips Salgados Golf and Oceanico’s Amendoeira Golf Resort, both near the family beach resort of Albufeira: “At these, a round of golf will cost less and property prices are far more affordable.” Equidistant from Albufeira and Vilamoura is Pata de Baixo where you can buy a four-bedroom townhouse on a small development for less than €350,000; or a more upmarket option in this area is the Pine Cliffs Resort, which occupies a stunning clifftop location.
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Buying Guide
Portugal Over 50 years of golf on the Algarve (continued) Western Algarve Historic Lagos, with its world-class marina and pretty old town, is the focal point of the western Algarve, with its beaches nestled beneath the cliffs. On the edge of Lagos is the Boavista Golf Resort & Spa, set around its championship course, where property options include have included fractional. For another option James d’Orey Charlton at Cerro Novo suggests the Carvoeiro area: “You can get some fantastic good-value properties there. You can be within a development but also very close to traditional fishing villages. Carvoeiro itself is a lovely village known for its coastal walks and great atmosphere, while its location allows you to benefit from all that the Algarve has to offer.” The Carvoeiro area is home to the Pestana Golf Resort, which includes the Vale da Pinta and Gramacho golf courses. You can buy outright with golfview apartments for around €200,000, or more for a townhouse or villa.
Eastern Algarve Fewer golf courses mean that the less developed, quieter eastern Algarve
attracts fewer golfers because generally they want a good choice of courses to play within easy reach. As a result, prices can be more affordable, unless you buy at the Monte Rei Golf & Country Club near Vila Nova de Cacela. Occupying 1,000 acres of countryside, it has been rated Portugal’s best golf course, which means that multi-million-euro villas at Monte Rei aren’t unusual. Your money goes further in the pretty town of Tavira and the surrounding villages, where the local course at Benamor offers another option for playing golf. You can get a four-bedroom villa in the beach town of Cabanas de Tavira for around €500,000. The east’s other resort option is Castro Marim Golfe and Country Club, next to the nature reserve of the same name and with views of the Guadiana River to the east and the sea to the south. Phases of development around its 27hole golf course include linked villas with private pools from €400,000 and village houses with a communal pool and garden for less than €400,000; or for a bit more, choose a self-build villa plot. ¤
NEXT LOCATION: THE SILVER COAST
WHERE TO BUY AND WHAT TYPE OF PROPERTY TO CHOOSE
HOW TO BUY PROPERTY IN PORTUGAL
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Buying Guide
Portugal
C AS E S TUDY
A place for family and friends to enjoy in the golden Algarve
Susan and Mike Bloomfield from Bury, north Manchester, had long dreamt of a home in Portugal. After appearing on the TV show last year, they bought a twobedroom house for £151,000 in Algarve’s “golden triangle”. Susan, 54, tells their story. “We contacted A Place in the Sun as we were looking to buy a property in Portugal and wanted a ‘home from home’ in a warmer climate,” says Susan, who works for the police. “Mike, at 55, is retiring from the fire service and the goal is to spend longer periods of time out there rather than just one or two weeks and to have somewhere for our children [aged 24, 28 and 36] and grandchildren to use. “We have been visiting the region for over 20 years and know the central Algarve well, especially Vilamoura and Albufeira, but were keen to explore more. Initially our budget was £120,000 and we wanted a traditional home, with its own entrance, not an apartment in a complex full of tourists. But for outside space – more important than the number of bedrooms – we soon realised we would have to up
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the budget to £150k-£160k. Being able to draw down a lump sum from my pension meant we didn’t have to get a mortgage. “We bought the third property we saw on the TV show because it had everything I had pictured in my mind. We are still pinching ourselves. It’s a semi-detached converted farmhouse with two bedrooms, a lovely open fire, its own courtyard and plunge pool and a garage for the bikes and golf clubs. It cost £151,000 (€172,400) from a private seller. “The location is great. We are 15 minutes outside Loule and the same to the airport, or a 20-minute cycle to the beach. There is privacy but we can walk to our local town of Almancil, and the resorts of Quinta do Lago and Vale do Lobo are nearby. A Dutch/Portuguese couple with a horse and goats live in the adjoining property and we have had drinks with them already. “We did learn from the process that it’s wise to use a currency broker, as the exchange rate changed during the purchase process and the difference between €1.14 and €1.19 to the pound
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equated to £5,000-£6,000. Even though the UK owner agreed to sell it to us in sterling, a Portuguese property has to be sold in euros and administered by the Portuguese, so we couldn’t get around losing out a little to the exchange rate. “But we love the property and have been out every month. We get cheap flights there – from £25 each way with Ryanair – and it’s very reasonable when we are there. There’s an Aldi and Lidl on our doorstep and a bottle of wine costs €2. It’s going to be used a lot by family and friends and it’s great because my daughter, who is a teacher, has been able to spend six weeks there in the summer holidays – something she wouldn’t have been able to afford to do.” ¤
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Buying Guide
Portugal Silver Coast f you like your seaside beauty spot with a bit more drama than the Mediterranean usually offers, a bit more lush than southern Spain and a bit more traditionally Portuguese than the Algarve, then the Silver Coast will be right up your alley. The Silver Coast (Costa de Prata) begins just north of Lisbon and stretches around 150 kilometres to beyond the coastal town of Nazaré. There is no set definition though, and some claim it continues all the way up to Porto, another 150 kilometres north. Development lagged decades behind the Algarve and was further delayed by the financial crisis. Now, however, the Silver Coast is shaping up for another boom period, with prices on the rise. It is an utterly gorgeous and dramatic stretch of coastline; wild and beautiful sandy beaches and lagoons, backed by cliffs and rocky headlands, hot enough in summer but warm in winter too. Although relatively unknown and definitely unspoilt, this coast makes the news each year when the world’s
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craziest surfers flock here to ride the world’s biggest waves. Although most famous for the beaches, the Silver Coast is part of rural Oeste Portugal. It’s not unusual to see locals riding on a donkey to their farms and vineyards. There are mountain ranges just a little inland offering all sorts of outdoor activities. Golf is more popular nearer the coast and several courses have been built in recent years to tempt us away from the Algarve. Praia d’el Rey, near Obidos, is the most famous.
Nazaré You see Nazaré in the world’s press most years; it’s the town in the foreground of all those dramatic “surfer rides world’s largest wave” shots. In 2014 all records were smashed when a surfer rode a 100 foot wave – the same height as a ten storey building. The town itself has around 15,000 people.
Peniche Peniche is a medium-sized town sitting out on a small but spectacular headland
with the sea on three sides. It has an attractive harbour, photogenic white windmills and long sandy beaches popular for all windsurfing-type sports. The town has almost 30,000 people in the area and has always been a busy fishing port. It is also a popular surfschool location.
Caldas da Rainha An historic spa town of 27,000 people, Caldas is 10 km inland. With museums and exhibition centres plus a bustling centre of shops of cafes, it’s buzzing in summer but there’s plenty to do and see in winter too. Nicely renovated apartments start at just over €100,000. There’s a network of villages around that offers semi-rural Portuguese life but with access to local services and transport links – the bus from Caldas to Lisbon only takes an hour.
Obidos Buy a property on the Silver Coast and you can guarantee you’ll be showing al your visiting British friends around this dramatic medieval walled town. It’s not only a local highlight but one of Portugal’s most visited places. It has traditional restaurants serving local fish in the narrow-cobbled streets and wonderful views from its
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Buying Guide
Portugal The Silver Coast (continued) battlements – perfect for spotting a nice place to buy! Best of all is the beautiful and dramatic Obidos Lagoon nearby, cutting inland from the little beach resort at Foz do Arelho. Sao Martinho do Porto is a lovely little town set round a lagoon, it has been built up with holiday apartments in recent years but is a good choice for those wanting something purposebuilt and easy to look after and rent out. Two-bedroom apartments and townhouses go for around €150,000. Mafra is a substantial town of 76,000 people with a huge baroque palace at its heart. A few kilometres away on the coast is Ericeira, a town of some 10,000 people and a major beach and surfing resort. It’s a popular weekend break destination for Lisboetas.
Purpose-built Resorts Praia d’el Rey Golf and Beach Resort is the best known of the developments, situated between Peniche and Obidos Lagoon. It was started in the 1990s and comprises a thousand privately-owned properties set around a five-star hotel with sports facilities and a golf course. You can buy two-bedroom apartments from around €280,000 or villas up to €4milion. Quintas de Obidos is an estate of just 79 properties with a unique selling proposition, it is dedicated to equestrianism. The multimillion-euro
villas are set around a lake, just south of Obidos Lagoon, with a country club and stabling for your horses. Captain Mark Phillips bought a villa here. Royal Obidos Spa and Resort has
nearly 600 properties, a mixture of villas, apartments and hotel suites, plus a hotel, spa, tennis club and an 18-hole golf course designed by Seve Ballesteros. Campo Real is a luxury golf and equestrian resort at a place called Torres Vedras, a little way inland from the coast and nearer to Lisbon than the other resorts. It is operated by the Dolce group. ¤
NEXT LOCATION: LISBON
WHERE TO BUY AND WHAT TYPE OF PROPERTY TO CHOOSE
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Buying Guide
Portugal Lisbon isbon is buzzing. The most westerly capital city in mainland Europe and also the warmest in winter it’s a city where residents can go surfing in the Atlantic in their lunch break. Lisbon is stuffed with year-round character and now fashionable restaurants and hotels. This explains why for some buyers - and investors - it beats the more seasonal charms of the Algarve. The value in Lisbon’s historic property stock is undeniable. “For a capital city of a Western European nation Lisbon’s prime real estate still offers value on a global stage,” confirms Paul Tostevin of Savills. “Mainstream residential prices are two thirds of those in Madrid, one third of Berlin’s and one tenth of London yet Lisbon also offers a higher quality of life than all three based on its low cost of living, low crime, pollution levels and pleasant climate.” One explanation for this growth is that from 1974 until 2012 rents in Lisbon were frozen. The city centre was largely left alone with no one keen to invest in property that provided
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no significant yields. When that protectionist law was changed in 2012 developers finally saw the value in restoring Lisbon’s beautiful buildings with many proving adepts at preserving the historical charm of beautiful facades while thoroughly modernising interiors. The combination of good investment potential and a winning lifestyle has encouraged a truly international mix of buyers to consider Lisbon. Chinese buyers in particular have been buying through Portugal’s successful Golden Visa scheme, introduced in 2012 and giving non-EU residents spending €500,000 or more on property a route to an EU passport. Property prices have been outperforming the national average: they rose by an astonishing 30 per cent from 2013 to 2016 but this growth has slowed. In 2018 this was very clear - and maybe it’s Porto’s turn to see a boom?
City centre appeal Lisbon is a compact city built on seven scenic hills. The smartest and priciest area of the city centre is around the grand boulevard of Avenida Liberdade.
This is where renovation of historic buildings began and early buyers included Portuguese football superstar Cristiano Ronaldo. For lower prices head to classy Lapa, hip Chiado by the river with appealing late nineteenth century architecture, bohemian Barrio Alto or newly emerging Santos where a seafront location and an energising mix of design shops and entrepreneurial startups is attracting youthful buyers. All these areas are an easy walk from each other and linked by public transport. Most centrally of all in the prime tourist area of Baixa, where prices are now hefty.
Outside Lisbon: Cascais Thirty minutes from Lisbon airport the former fishing village of Cascais has always appealed as a classy escape from the city. “Cascais is not only a perfect summer destination but also a great place to spend time in winter with an active year round community,” says Nicola Duarte of Nduni Property (nduni-property. com). “The wonderful weather of hot summers and mild winters allows residents to play so many sports. Also Cascais is ten minutes from enchanting Sintra - a UNESCO World Heritage Site - and a short walk from several beaches, museums and palaces and fine restaurants.” The centre of Cascais has apartments priced from €3,000 per square metre. “Before Cascais was well-known the rental season lasted from May to September but recently investment in the area has significantly increased tourism, extending the season,” says Silva. “The properties that rent best are those within a one-mile radius of Cascais centre and also close to the beaches with air conditioning, views, balconies and pools. Owners can generally achieve a 5 to 7 per cent return on investment. ¤
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Buying Guide
Portugal
C AS E S TUDY
We bought on the Algarve as an investment The Wadsworths had never heard of Cascais before Pat started working for a swimwear designer and was tasked with setting up a subsidiary in the affluent suburb of Lisbon in the 1990s. Over a series of regular work trips, when Tony would pop over for the weekend to make a bit of a holiday of it, their love of the area grew, says Pat, now 61. “We’d always dreamt for buying a home abroad, probably in France, but one of these weekend trips to Portugal we suddenly had a Eureka moment and both agreed that we should buy in Cascais instead. It would make sense that we had a base there so I wouldn’t have to keep staying in hotels.”
Getting a city bolthole They bought a two-bed ground-floor apartment in a small block of seven properties in the centre of Cascais with a little balcony for £160k in 2002. Cascais is a former fishing village that has evolved into a popular residential area for retirees and commuters from Lisbon. Offering traditional architecture, beaches, good restaurants and nine championship golf courses nearby (in neighbouring Estoril in whose Hotel Palacio writer Ian Fleming drank martinis and found inspiration for his James Bond novels) it appeals to lifestyle buyers rather than investors. “It was perfect for weekends and school holidays, when we’d bring our grandson over with us - after Tony retired in 2002 he took on full-time childcare - and we loved our cosmopolitan mix of neighbours. In fact we love the fact that Cascais is very international and not a British enclave,” says Pat, who adds that it is any easy half-hour
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drive from Lisbon airport. Not wanting to enter the Portuguese fiscal system - it’s quite bureaucratic, says Pat they didn’t rent out their home, but it was great for remote working for five years when they began to think of upsizing. “When Tony’s commitments back at home finished, and the family was growing up, we decided to sell our apartment and move out of town to get more house for our money,” says Pat. “It was the recession but we got the money back on the apartment and we bought a four-bedroom, three-bath house in Murches, a village six or seven minutes outside Cascais and only five minutes to Guincho beach wellknown for surfing. It’s on a development of 12 properties, with whom we share a pool.”
Upgrading to a four bed villa The couple bought the property - which has a lovely 100m2 terrace - for £250,000 through their agent - through whom they also sold their apartment. They pay £80 a month condo fees for the upkeep of the gardens and pool, as well as council tax of €1,100 a year (and utilities). Since Pat retired last year they have been able to spend longer periods at the villa and essentially split their time roughly 50/50 between their four-bed detached home in Essex and Portugal. “We love both homes, and can now choose to spend time at either. But when we are in Portugal we do the same sort of things we do at home - we shop, cook, clean, go for walks - and have the same set of books,
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CDs, DVDs,” says Pat, who is very keen to emphasize the fact their life is “not one long holiday”. “But they do have the opportunity to go for walks along the beach, meet friends for coffee, have Portuguese lessons and also have a few lunches at local restaurants, including their favourites, O Faroleiro on Guincho Beach and Restaurante Nortada at Praia Grande, 30 minutes drive north.” “We can live cheaper here than in the UK if we eat seasonally and don’t frequent the tourist restaurants, and our outgoings are around €300-400 a month,” adds Pat. “But then of course we have to pay the bills on our Essex home too, so running two properties is not cheap. But 25 years ago we never dreamed we’d be able to afford to live as we do now.” It’s also warmer in winter of course, and the restaurants don’t close down as they do in seasonal holiday areas, which was why they prefer the Lisbon area to the Algarve. “We think the Algarve is one long stretch of holiday makers, it’s not real life. There are lots of expats playing golf and tennis and it’s a bit like Chiswick-on-Sea!” suggests Pat. “Here we have a lot of people working who commute into Lisbon so it’s a very different feel. We have Italians and South Africans as neighbours, there are also quite a few Scandinavians and Russians who have bought to take advantage of Portugal’s Golden Visa scheme [residency permits with property purchases of €500k or more for non-EU investors] or tax benefits [zero income tax for pensioners].”¤
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Building your dream villa Building Building your your dream dream villa villa
Contact: [email protected] Portugal (Madeira): +351 9666 77630 Contact: [email protected] Contact: [email protected] Portugal (Madeira): +351 9666 77630 Portugal (Madeira): +351 9666 77630 DOWNLOAD e The 23 pag D Ade gui OW perNtyLO D pro sit vieD puag A e n23 LO Nyo W Ohe DwTh de uite gsi wtyeb ou prer e ro pTh 23 pag e sit vid u yo n wrohe ui g e p prerwtyeb te si sit ou when you vi te si eb w our
Buying Guide
Portugal Madeira he subtropical Madeira Islands are growing as an overseas property destination, located in the Atlantic Ocean, around 500 miles south west of the Algarve and 275 miles from the west African coast. Madeira is known as the Pearl of the Atlantic for its year-round flowers and is Europe’s most revisited island destination. The main island (where 98% of the population live) measures 35 by 15 miles and has many high mountains and a stunning coastline. More than 60% of Madeira is a unique nature reserve with UNESCO World Heritage status. With a lush subtropical feel and many dramatic mountain and levada walks (minicanals or aqueduct systems), nature is all around. The island has a unique flora and abundant flowers earning a deserved reputation as a gardener’s paradise. Other pluses are direct flights of only three-and-a-half hours from the UK and low-cost carriers have joined the airline fray, with flights from only £45. No riff-raff, no sandy beaches (but there are beautiful rocky lido’s formed across the island) or big loud discos makes this a quiet and sophisticated experience for homeowners. Madeira, due to its quite exceptional year-round subtropical temperatures, was ideal for growing sugar cane and the island made a fortune in the then ‘white gold’, which was later to be replaced by the Madeira Wine industry. Today, Madeira with its Portuguese influence and friendly people is a growing destination for those searching for a quiet and safe escape in the sun, to either call home or to have as a yearround island getaway. Property tends to be a bit pricier than the equivalent on the mainland of Portugal, but you can buy older, authentic Madeiran homes right through to newly built places. New build
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and off plan in-particular are a popular choice for a hassle-free option. You can pick up a two-bedroom, older cottage in a quiet village for €350,000, but remember that most Madeirans don’t build pools (what’s wrong with just swimming in the sea? they ask). A two-bedroom apartment in the heart of Funchal is around €395,000. For €650,000 you can pick up either an older three-bedroom villa with sea views in the ever-popular Ponta do Sol area, or a newer three-bedroom house with a pool in Funchal for €875,000. Madeira is a charming all year
island, where average temperatures tend to be a constant 20 to 25 degrees. The beautiful, cosmopolitan capital of Funchal is graced with a vast number of diverse restaurants, coffee bars and modern shopping centres and unlike many destinations, the vast array of restaurants are open all year round, ensuring an excellent lifestyle. Madeira (due to its good climate) is also home to a staggering number of classic cars and classic car events, indeed the cultural events in Madeira are all year round with the world’s biggest New Year firework display topping it off. ¤
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Buying Guide
Portugal
CASE ST U DY
Life is sweet in Madeira Seeking some easily reached winter sun? Liz Rowlinson meets a British couple who have moved full-time to the subtropical Atlantic island of Madeira… It was the British winters that really got Gary and Glenys Flint down about their life in Cookham Dean, Berkshire. Knowing they wanted to take early retirement – and without children to worry about in their decision making – the couple decided to sell up and rent in the UK while they researched where to move to abroad. “I don’t think we were actually suffering from SAD [seasonal affective disorder] but we were always miserable in the winters and found commuting into London for our jobs stressful, so we decided to move to somewhere sunnier,” says Gary, 52, who used to be in the corporate world. “Having made the decision to go, we tried northern France first. But we visited in winter and found ourselves in six inches of snow. We were offered everything from cow sheds to chateaux, but we weren’t going to swap bad winters for even worse ones!” After rejecting Spain and a few other locations due to the presence of snakes (Glenys cannot tolerate the possibility of them popping up in the garden) and the
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Caribbean as being too hot, they went on holiday to Madeira and loved it. They went back three more times and decided it felt right. “The temperate climate, the friendly, laid-back people, the way of life, the architecture, the feeling of security, it was all part of it,” says Gary. The island has one of the lowest crime rates in Europe. They were lucky enough to come across a local builder three years ago, and the resultant three-bedroom villa with stylish infinity pool is a great example of the sort of contemporary, luxury property that you might not associate with Madeira, an island full of traditional quintas and farming estates tucked between banana or sugar cane plantations. Madeira wine is a bigger export than sugar (or white gold) on the island these days. Their villa is fittingly on the “banana line”, the point up the mountain on which it is warm enough to grow the fruit. And it enjoys 180-degree views of the sea. “If you want to be cooler, you go higher up the hill, but we chose a level where it is warm enough to avoid not having central heating,” says Glenys, 55, who used to be in fashion. Built on a plot of 860m2, the 400m2 house is surrounded by terraced gardens and includes a self-contained onebedroom apartment which they rent out for holiday lets (they needed to obtain an AL or Alojamento Local number for this) – and advertise on Home Away. “The income from the rentals allows us to live here without working and we get all sorts of nationalities,” says Gary. “We have just got a booking for four weeks from an American who normally goes to the Caribbean but whose usual place was hit by the hurricane.” The couple spend their time cleaning, pottering around, walking their dog, hiking along the levadas, or terraces cut into the hillsides, and Glenys paints in her studio in the garden. They also enjoy mixing with
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the large expat community, most of whom are fellow Britons, Germans and Austrians. They have most things they need in their local town of Ribeira Brava, including supermarkets, banks, doctor and a tax office. The island has a population of nearly 255,000 and the fourth highest doctor: patient ratio in Europe. What is their favourite place? Jardim do Mar, just along the south coast, says Gary. “It’s a quaint little-pedestrianised village with good eateries and a good promenade,” he says. “It’s near Calheta, a place with man-made beaches – made from imported Moroccan sand – that is popular with German expats.” For good sandy beaches, the couple take a 2.5-hour ferry to the neighbouring island of Porto Santo, a great day trip. “We are hoping that the ferry that used to run a round trip via Madeira, Tenerife and Portugal is started up again as that would really open things up for us. As Portuguese residents, we get a government rebate on ferry fares, flights and also healthcare costs. There are plenty of flights to the UK each day from Madeira.” And after Brexit? “We are not worrying and will find a way around it,” says Gary. “There are 210,000 Portuguese citizens in the UK – including many from Madeira in the hospitality business – so there will be some kind of deal. Maybe we might need to have private healthcare.” The couple recommends that expats do not miss the deadline for applying for the non-habitual residency tax benefit that is available for new arrivals who spend more than 183 days in Portugal in the tax year. “You need to apply within a year of arriving, or you miss out,” he counsels. “It’s really worth doing from a tax perspective, yet many expats are still not aware of its existence.” Apart from missing her British yoga teacher, Glenys has no regrets about leaving the UK. “We love Madeira and have no intention of going back to Britain. ¤
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Buying Guide
Portugal Porto f the Algarve is a little sleepy for you and yet you love the culture of Portugal you might want to consider the country’s second city of Porto. Love Lisbon but can’t afford to buy there now? Again, try Porto. This charming location, which is a Unesco world heritage site, is the gateway to the beautiful Douro Valley which is a wine tourism destination in its own right. While once visitors queued for the scenic cruises along the Douro river and the city’s 300-year-old port houses owned by British families including Taylor, Warre, Graham, Cockburn, Symington and Dow, on the south bank of the river, the centre is now being rediscovered by both tourists and property investors. The granite city – with six bridges spanning the Douro river including the Maria Pia bridge, by Gustave Eiffel –is easy to navigate, full of cobbled streets, with a buzzing riverside of pavement cafés. The fact is that Baixa, the historical centre of Porto, had been rather abandoned by many of the locals. For years and some of its streets have the feel of a ghost town. Street upon street of once-elegant townhouses, their façades of colourful ceramic tiles broken and dirty, have lain empty since the 1950s. Since then the population of the heart of the city dropped from 500,000 to 50,000 – a fraction of Porto’s total of 215,000. Locals who could afford to moved to the upmarket suburb of Foz (where the international schools are and villas cost €1 million-plus) which is closer to the Atlantic coast; or to apartment blocks in the nearby fishing village of Matosinhos, close to the main beach of Porto and its good surf schools. But the regeneration of Baixa is now underway, and whole blocks of scaffoldclad medieval townhouses bought up by local and foreign developers. They are
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acquiring four-storey townhouses for about €600,000 each, renovating them into four large apartments, or up to eight studio units, and either selling them to private buyers, or renting them out on Airbnb. As more and more tourists arrive – there’s a shortage of attractive apartments to stay in the city that has become a mini-break destination. The Portuguese national airline TAP fly regularly, as do British Airways and Ryanair. Stylish new restaurants, artisan coffee shops and gin bars are also popping up in Baixa, and even some of the Foz locals are rediscovering this part of their city. So why the change? The improvement of the city, which was a European capital of culture in 2001, began when Portugal hosted the 2004 Uefa European Championship football tournament. The following year its international airport was upgraded into the stylish, modern terminal that it is today. Tourism figures have jumped considerably since 2013 and now there is a shortage of hotel beds as well as rental apartments.
In Lisbon they are taking advantage of Portugal’s Golden Visa scheme (offering residence permits to non-EU citizens with purchases of €500,000 or more) but the Golden Visa buyers are discovering Porto too. JK Rowling found inspiration for the Harry Potter novels at the city’s neo-Gothic Lello bookshop while she was living nearby. The British have long been the biggest population of expats since they arrived for the port trade more than three centuries ago, and their influence is felt across the city. ¤
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Buying Guide
Portugal The Portuguese Property Market: A Snapshot ortugal is the more laidback and solidly reliable country of the Iberian Peninsula, and its property market has never experienced the peaks and troughs of Spain. Although buying a home in Portugal has historically been all about the lifestyle rather than the return on investment, this has begun to change in recent years. So what is happening and why? After the boom years and the 2007 market peak, property prices fell in the popular coastal resorts, just as they did across most of Europe. Whilst hot spots that had overheated in these years suffered drops of up to 40-50 per cent - these were seen on parts of the western and central Algarve - other areas tended to be hit less hard, because over-supply of new developments has never been an issue as suffered by the Spanish Costas. The market bottomed out in 2013/14 and since then stabilsation has been followed by price rises of varying rates. The shortage of properties coming onto the market continues to underpin prices, with house prices increasing by around
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by 5% (on average) per annum. The fact that mortgage availability has been improving, along with domestic demand, has also helped. In Portugal the market for overseas buyers is relatively somewhat simple to summarise - there’s Lisbon (has boomed; now slowing), Porto (beginning to boom), the Algarve (steadily increasing) and then is the rest of the country, characterised by fragmented rural areas with few overseas buyers, or secondary areas of interest such as the Silver Coast, Alentejo and Costa Verde (near Porto). Price growth has slowed down in the capital Lisbon, a location that has been unique in Portugal. There prices increased by a hefty 30 per cent between 2012 and 2015 but have since slowed and they are not expected to grow by the same rates as other regions that are way behind in terms of average prices and level of demand. Prices have risen to €10,000 per sq m in districts such as Chiado, but other popular districts are half that. So who is buying? The British
do remain players, along with Scandinavians and other northern Europeans, and the number French has especially been increasing in both Lisbon and the Algarve. The successful golden visa scheme of Portugal has attracted many Chinese, Turkish and Brazilian buyers to Lisbon, but not a huge number to the Algarve. Meanwhile the non-habitual residency scheme has also attracted wealthy buyers from a variety of countries, including the UK. To look at the British buyers’ favourite market, the Algarve, a little more closely, demand has diversified in recent years to include its western and eastern fringes, rather than the central section where the region’s development started. Now parts of the western Algarve around the popular Lagos - offer prices similar to those of the popular stretch around Albufeira and Vilamoura. Prices tend to be highest around the “golden triangle” around the resorts of Quinta do Lago and Vale do Lobo, where villas can rise up to €20 million plus. Buyers who don’t wish to pay a premium for the big-name resorts have looked around Loule, near which breakfast TV co-hosts Philip Schofield and Holly Willoughby own holiday homes. In recent years the eastern Algarve has been catching up in price growth, fuelled by French buyers looking for homes for €300,000 or less. For even greater affordability, look behind the coast where your money will go even further - and village life will likely be more authentic. ¤
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Buying Guide
Portugal A Buyer’s Guide on Moving to Portugal ou may have recently read an article on aplaceinthesun.com where we spoke with Richard and Amy from Cumbria, who were preparing for their exciting move to the Algarve. Since then, Amy (pictured) has been giving her personal tips on moving to Portugal and highlights crucial factors to consider including healthcare, pet-relocation and seeking employment.
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Healthcare “If you are a resident, you can access the national health service care and pay very minimal costs for treatment, just a small contribution. There are also private hospitals and clinics such as the Hospital Particular group. You don’t have to de-register from your GP surgery in the UK unless you are no longer a UK resident and have registered with the Portuguese national health service. Visit gov.uk/guidance/ living-in-portugal for more information.
Cars Start by ignoring most advice you’ll find on forums. Costs to import cars to Portugal have been challenged by the European court due to unfair valuation rules; any changes are yet to come into effect but for now, if you register a UK vehicle in Portugal within six months you don’t have to pay the ISV (importing tax). Equally, you can keep your UK plates for up to 183 days by driving out of Portugal for a day, enabling you to delay registration. If you want to use your vehicle for any commercial purposes, though, you need to register immediately. This government website gives reliable information and is translated into English: dgaiec. min-financas.pt/. Again, I stress: avoid looking at forums for definitive advice.
Buying property If you’re buying, use an independent
WHERE TO BUY AND WHAT TYPE OF PROPERTY TO CHOOSE
solicitor who will ensure that the entire property you are buying is clear of any inheritance claims; in the past, people would leave individual rooms to different family members. Factor in costs such as IMT (Transfer Tax) charged to non-resident purchasers. This ranges from 1 – 8 percent but is due to be replaced in 2018 by Stamp Duty at 50 percent less than IMT charges. Visit portugalproperty.com/ finance-related/taxes/ for further information.
Pets Ensure you get a pet passport and that your pet is vaccinated against rabies at least 21 days before departure. Microchipping is a requirement for the passport. More advice can be found at brittany-ferries.co.uk information/ PETS-travel-scheme or by speaking to TransFur International Pet Relocation.
Research Trips Set aside some of your budget for research trips; if you’re not keen on signing up with an estate agency or developer because you’re looking at resale homes then booking budget airlines early and using Airbnb create cheap options.
Property market
Faro’s airport expansion has increased capacity and the property market is booming, helped by tax and residency incentives for foreigners. Expect to be in a better position as a cash buyer or with a mortgage in place with a bank account and a fiscal number (this can be purchased from a town hall by showing your passport and driving licence).
Schools Children must be in school between the ages of 6 – 16; residents can access state schools but Portugal has excellent international day and boarding schools running the British curriculum in
Lisbon (St Julian’s), Porto (Oporto British School) and the Algarve (NOBEL International School Algarve). Visiting when school is in progress is a must. Some international schools are very small, private enterprises and one of our visits revealed that a secondary school had no science laboratories.
Residency As an EU resident, you can live in Portugal for three months before you need to obtain a five-year residency certificate from the town council. You have to show a UK Council Tax slip or other proof of residency in the EU. Thereafter you must apply for permanent residency.
Jobs If you work in hospitality, property management, property sales, tourism or even IT, job opportunities are good in the area – websites such as justlanded.com and angloinfo.com were a good starting point. Outside these areas, research the industries you are interested in and go directly to human resources managers through linkedin.com or by visiting in person if possible.” ¤
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Buying Guide
Portugal A key question to ask: WHY are you buying? s with buying anywhere abroad, you must ask yourself WHY you are buying and from this lots of other questions will follow. Do you want somewhere for regular holidays or do you want somewhere as an investment to pass on to the kids or do you seek a genuine second or semi-permanent home? Maybe you will need to cover your costs by renting it out too? Further choices include do you choose Rural or urban, New or old, amongst expats or mainly locals? Other key considerations include how far you want to be from an airport, beaches and key amenities such as supermarkets and a local restaurant. At least half of buyers we interview want to be within walking distance of cafes and
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restaurants because many people don’t want to be reliant on a car abroad. If you are relocating full-time with a family then schooling options will need to be investigated early on (and places applied for months in advance), whilst retirees will need to check on medical facilities and pharmacies. On the other hand if you are banking on renting out your property you will need to consider the ideal size and type of property, the sort of features that rentals might expect (outside space, use of a pool?) as well as popular locations. You should create a brief that sets out your list of requirements, from number of bedrooms, type of property to the features you wish to have. The following pages outline some key areas to consider…¤
“Consider the practicalities of owning a home abroad and how much time and money you are prepared to spend on your property. Upkeep costs are a key consideration, along with general costs on day-to-day amenities”.
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Buying Guide
Portugal To buy old or new? uying a “tried and tested” resale property you can see how the property works from a layout and position of the sun point of view. You might well get something that has been built in a great position that would not be available now. Equally, if a vendor is desperate to sell their home, you might get one at a great price compared to a new property of the same spec. But all said, there are several definite advantages of buying new if you can afford it:
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You can choose your fittings from a selection of options to make your holiday home bespoke. Sometimes you can tweak the layout too, not just tiles and fixtures. Better build quality. Improved building controls mean that new homes need to meet certain standards. They have to be well insulated, for sound as well as heating, more eco-friendly and comply with regulations for earthquake resistance. Modern layouts. The style will be contemporary with spacious living areas and outdoor terraces. On the minus side, the pay off for larger living areas does mean slightly smaller bedrooms. Cherry-pick the best location. If you’re hoping to make a return on your investment, choosing the best plot, with the best view, is always going to appeal to renters and also buyers when you want to resell. Less upkeep hassle and costs. Everything is new, you won’t need to budget for repairs – yet! Aftersales care. Buying when building work is ongoing means you’ll have the developers team will still be onsite. Any niggles or flaws in the property will be fixed easily. Ten-year warranty. New-builds come with certain guarantees so problems can be quickly solved. ¤
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Viewing Trips Explained onsider going on a viewing trip offered by an agent or developer but make sure you know what to expect and that you understand what’s involved. If your trip is being organised and possibly subsidized by an agent it’s not unreasonable to expect them only to show you properties on their books. If you prefer to do your own thing and see a wider range of properties then arrange your own trip and book in for a half day with agents representing properties you have found on property websites and see what else they have to offer and benefit from their local knowledge. Don’t feel pressurized into buying anything there and then – you need time to reflect away from the sun and snails! On any type of viewing trip it is handy to take records of each property so you can look back and compare with all the information (and pictures) you need. It can be useful to use a wish list of tick boxes, to rate properties 1-10, or list their pros and cons, after seeing each one, so you don’t confuse them. Make a note of things you want to follow-up with the agent on each. ¤
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Portugal How to buy a property in Portugal
----HOW TO BUY PROPERTY IN PORTUGAL 24 The Purchase Process 25 Property Tax in Portugal 27 Getting a Mortgage 28 Mortgage Conditions 30 Legal Guide to buying in Portugal 31 Ongoing cost of ownership 32 Transferring your money abroad
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Portugal The Purchase Process irst up, in Portugal it is important that you are aware that estate agents are licensed (or not!) so check that the one that you are dealing with is registered and possesses an AMI No - which means that that use certain forms of approved documentation to implement their functions in the profession. Once you have decided to buy in Portugal you should also find a lawyer (advogado) or solicitor (solicitador) to look after your interests in the purchase process. In Portugal there are many that speak English. You can also give them Power of Attorney if you cannpt be present yourself to sign documents. You will also need a fiscal number (numero de indentificacao fiscal/NIF) which is available from the local tax office (financas), and necessary to open a bank account in Portugal. Do all this before starting on the contract. There are two stages to the buying process. The first is the Promissory Contract (contrato de promessa de compra e venda or CPCV) between buyer and seller, on the condition of the property. This is a legally binding contract, prepared by a lawyer, and needs to be signed on licensed premises or in front of a notary (notario). Upon
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request the contracts can be produced in English and Portuguese. It should include the identify of both parties, the property, confirmation of clear title, price agreed, deposit amount, date of deadline for signing the final deed (Escitura) and the use of the property in the interim period, if required. The deposit is usually from 10-25 per cent of the purchase price. A clause can be added (if applicable) stating that it is conditional on any mortgage offer being accepted. Once the Promissory Contract has been signed and deposit paid, should the seller default he/she is required by law to repay twice the deposit amount to the buyer. If the buyer defaults they would also lose their deposit. Following this, the lawyer does searches and checks for encumbrances or mortgages on the property. These checks should include any planning restrictions, outstanding debts, charges or utility bills on the property, that any alterations comply with the habitation license (Licença de Habitaçao) and that the vendor is the registered owner of the property. Also verified will be the property’s boundaries, rights of way, restrictions on use, any survey and whether fixture and fittings are included.
The second part of the transaction is the Escritura (escritura de compra e venda, or final deed) and this is the point at which the property ownership is transferred to the buyer. As with the promissory contract, it is signed in front of the notary. The final contract is then sent to the Land Registry but the notary will issue you with a stamped copy of the Escitura (it is advisable to get more than one copy). There is a fee for the Land Registry. You will also need to register with the tax office (Autoridade Tributária) and all the utilities companies.
Portugal Buying Costs The total cost of buying a property in Portugal includes the purchase price and the closing costs, which average 6-10 per cent of this price. So how does it add up? The biggest cost is property transfer tax (Imposto Municipal sobre Transmissões or IMT), paid on second home properties over €92,407 on a sliding scale from 2-8 per cent. There is a Stamp Duty (Imposto de Selo) that is a fixed rate of 0.8 per cent. Notary, admin and registration fees are 1.5-2.5 per cent, and legal fees 1-2 per cent of the purchase price. The seller pays the estate agency fees. You’ll also need to find the most cost-effective, safe and easy way to move your money to Portugal to complete your purchase. Bank charges and fluctuating exchange rates can both have an impact on your overall cost but you can save up to 4% of the cost by working with a specialist currency firm. They can help you achieve currency exchange rates better than the banks, and reduce the risk of your international payments increasing. On a £100,000 exchange, a currency specialist can save you up to £4,000 by providing better rates compared to your high street bank. ¤
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Portugal Property Tax in Portugal ortugal has long been a favourite for Brits looking to acquire a holiday home, or for those moving in their retirement. Previously, Portugal’s preferential tax regime for new, long-term residents had been their best kept secret, but the new internet-savvy, information-hungry retiree is now very much aware of its benefits. It is important you know of the various property taxes, which may fall due on purchase, or throughout the period of ownership of a property.
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On purchase, the buyer is potentially liable to: 1. Imposto Municipal sobre Transmissôes Onerosas de Imóveis (IMT) is a transfer tax payable when buying Portuguese property. Ranging from 1% to 8%, rates depend on the purchase price, the property’s ultimate use and whether it is to be the main or second home. 2. Imposto de Selo, an additional stamp duty, of 0.8% is payable on purchase. 3. New-builds will attract 23% VAT
(with no IMT), inclusive in the property price. Annually, the owner could also be liable to: 1. Imposto Municipal sobre Imóveis (IMI), is the Portuguese version of UK’s council tax. Rates vary from 0.3% to 0.8% according to property type, location and age. While some exemptions are available, IMI could be doubled on vacant properties and increased to 10% where ownership is in a ‘blacklisted’ (tax haven) jurisdiction. 2. Introduced in 2017, the Adicional Imposto Municipal Sobre Imóveis (AIMI) is seen as Portugal’s version of a wealth tax, aff ecting those with a share in Portuguese property worth over €600,000. Regardless of residency, rates are 0.4% for properties held by companies, 0.7% for individuals and 1% for those owning property valued over €1 million. The €600,000 allowance is per person, so a property owned jointly with your partner will only attract AIMI on the value in excess of €1.2 million. 3. For non-Portuguese residents,
income tax on rental income is 28%, although maintenance, repair expenses and IMI may be deducted. If you are UK resident, the rental income is also taxable in the UK, but you can off set the Portuguese tax paid against the UK liability. If your intention is to move to Portugal and occupy the property as your main home, then you will be Portuguese tax resident. In 2009, the Portuguese government introduced the NonHabitual Resident (NHR) regime for anybody who has not been resident in the previous five years. It provides benefi cial tax treatment for the first 10 years of residence. Application on arrival is simple, and your status should be confi rmed within 8 weeks. For those with employment and self-employment income derived from a “high value-added activity” within Portugal, a special tax rate of 20% is applicable. In addition, there is an exemption from tax for certain foreignsource income (pension, employment income, self-employment
“Portugal’s preferential tax friendly regime opens up the door to every type of British buyers”
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Portugal Property Tax in Portugal (continued)
income, rental income, certain capital gains, interest, dividends, as well as other investment income), provided certain conditions are met. Therefore, the attraction for retirees, who intend to live off pension income, and interest and dividends from investments is obvious; structured correctly, it could be possible to live almost tax-free for 10 years. This becomes even more attractive when you factor in the UK’s “pension freedoms”, which from 6 April 2015 allow those with UK pension schemes greater flexibility in how they can take their pension. It is now possible to simply “drawdown” pension capital on a regular basis, or take the whole of the pension pot as a single, or series of lump sums. If you were UK resident at this point, then any sum(s) received in excess of the 25% tax-free amount is taxable at the UK’s scale rates of income tax (up to 45%). If you were a Portugal tax resident at this time, then Portugal has the taxing rights according to the UK-Portugal Double Tax Treaty. NHR then means
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there would be no tax to pay in respect of the commutation of the pension fund. Adjustments to NHR in 2019 mean it is no longer possible to take the whole pension fund as a single lump sum – going forwards, the majority can be taken initially, with a series of small payments each year – as long as there is an element remaining in the pension fund at the end of year 10. If you have other capital outside of your pension scheme(s), then you could utilise the benefits of an offshore life assurance policy, as a tax efficient investment wrapper. These conservative, Portuguese-compliant investment vehicles enable you to defer any tax on interest, dividends and gains to the point you decide to make a withdrawal. Even then, the taxable element is not the whole “profit” accrued to date, but a proportion of it. As an example, a policy started with £100 has increased in value to £110. If a withdrawal of £11 is made, it will include a profit element of 10:110, or 1/11th, so only £1 of the £11 is taxable. Furthermore, the rate of tax drops, so
only 60% of the profit is taxable after five years, and only 20% after eight years. The inheritance tax situation in Portugal is also relatively benign. It only applies to Portuguese assets and the tax rate is only 10%. In addition, spousal, child and parental beneficiaries are exempt. Portugal has always allowed nonPortuguese nationals to include within their Wills an election to apply the succession regime of their nationality (ie., the UK) to their estate. This will allow you to apply the UK common law concept of complete testamentary freedom to your Portuguese estate, where normally the civil law concept of forced heirship would apply. Europe’s new Succession Regulations, introduced in August 2015, reinforce this treatment. ¤ This was provided by International Tax & Wealth Management specialists, Blevins Franks (blevinsfranks.com).
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Portugal Getting a Mortgage in Portugal ou need to know exactly how much you can afford to spend and how you will finance your property. Many agents recommend you have your finance in place before you go and view properties, so you won’t lose out because the process is not always as quick one. Bear in mind that the purchase taxes on property need to be included in your budgeting. They are hefty in Portugal and also vary widely between the regions (taxes on the property are lower in Portugal, between 7-10% for all purchase costs, which includes taxes, the tax rate for the property is related to the price, higher priced properties are taxed higher)- SEE section on Taxes. For financing: will you re-mortgage your UK home to release equity, use savings and/or pension funds, or try to get a mortgage. You must also factor in buying costs – which can be quite high in certain places in Portugal – as well as running costs.
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amount of 60%. For fiscal residents who pay Portuguese taxes, the maximum mortgage is 80%. Mortgages for retirees - If you are over age 60 and in receipt of a pension, you can still have the mortgage in your own name. It is also possible to appoint a guarantor such as a family member to secure the borrowing, which can have potential inheritance tax benefits if they are also a part-owner in the property.
Commercial - If you are buying a property for commercial use, such as a restaurant or a shop, for example, the maximum mortgage is 50% of the price (or valuation if lower). If you intend to run a business the lenders will ask for business plans and, where applicable, accounts for any previous business operating at the premises, as well as what previous experience you have had running a similar business. ¤
Construction mortgages – for those wishing to build their own homes, banks offer construction mortgages. These are complicated to explain and you should definitely speak to a broker, but broadlyspeaking you can potentially borrow 50-60% of the land and construction costs combined.
Getting a Portuguese mortgage Arranging any mortgage abroad can be a daunting prospect and Portugal is certainly no exception. For the uninitiated, it’s difficult to know where to start and whether information you see or receive is correct. This is complicated by the fact that banks lending in Portugal do not always offer the same conditions to clients, even if they have similar profiles. The mortgage market in Portugal is quite traditional in the sense that having the right contacts is crucial if you want to get the best deals. Non-resident mortgages (60-70%) – for non-residents who pay their taxes outside Portugal, the maximum mortgage amount is 70% of the purchase price (or valuation if lower), but some banks have a maximum
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Portugal Mortgage Conditions Interest rates Most lenders use the annual Euribor as the base rate and then add their own margin to this, for example, “Euribor plus 2%”. Generally speaking, they require that you contract different products with them and they give discounts to the rate for taking each product. Compulsory products are usually a bank account with the bank offering the mortgage and home insurance with that bank’s chosen insurer. In many cases, life insurance with the bank’s chosen insurer is also compulsory. By using one of our recommended brokers they can secure a much lower rate than if you go direct to a bank or negotiate lesser products to be included. Where a bank may offer rates as high as Euribor + 3.5% if you go direct, our brokers can achieve Euribor + 1.75 2.25%. Although the vast majority of mortgages are variable rate in Portugal, fixed rates are becoming more popular, especially now that the Euribor is at its lowest ever level. A typical fixed rate
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for a 20-year term could be 2.99%, depending on the bank. Interest-only – this is only offered for construction mortgages in Portugal and, where offered, it is only for one or two years at the start of the term. Term of mortgage – most mortgages can be arranged with terms of 25 years (for non-residents) and 30 years (for residents), usually up to a maximum age of 75. For non-residents, some banks have a maximum 20-year term.
Qualifying Criteria The lenders all use what is known as a debt-to-income calculation as the basis for deciding whether applicants will qualify for a mortgage. In basic terms, this means that your monthly debt commitments, including the new mortgage, must not exceed a given percentage of your net monthly income. The typical percentage is between 30-35%, so here is a very basic example of how the calculation works for an employed applicant whose only debt is
the repayment mortgage on their main residence: -Applicant earns £3,000 a month after tax --- 30% of £3,000 = £900 --less UK mortgage of £500 = £400 --So, they have the equivalent of £400 per month they can “afford” for the new mortgage in Portugal. There are many other variables to take into account, but this gives a very basic idea of how the banks assess the applicants for the mortgage. Again, we strongly advise working with one of our brokers, as they have an in depth understanding how each bank works.
The Application Process 1. Initial, no obligation, assessment - speak to a brokers or complete an online form and they will advise you on whether a mortgage approval is likely and what conditions could be possible.
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Portugal Mortgage Conditions (continued) 2. Mortgage quote – following the initial assessment, your broker will aim to send a full mortgage quote within 24-48 hours. 3. Sign up - if you wish to proceed, your broker will ask you to sign the terms and conditions and arrange payment of a fee of €495, which comes with a money back guarantee, so if the mortgage is declined the fee if refunded (subject to the terms and conditions). 4. Submit application form – your broker will assist you with completing the relevant application form and they will submit this on your behalf with the appropriate supporting documents, which they will request once you have agreed to proceed with the application. 5. Decision from lender – if the mortgage is approved, the broker will confirm the conditions and ask if you wish to proceed. 6. Set up bank account and instruct valuation – a bank account will be set up and you will be asked to deposit enough funds to cover the valuation fee. 7. Valuation report – if the valuation is no lower than the agreed purchase price and the property has no legal issues, the completion arrangements can be made. 8. Completion arrangements – the broker will work with the bank and your lawyer and they will confirm the funds necessary for completion, which must be transferred as soon as possible to your account with the lender. Once the funds are in the account, the lender will prepare everything and you can decide on a completion date at the notary.
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9. Completion day – the lender will draw up all the necessary cheques and arrange payment of the property and mortgage taxes from these funds. Once the property and mortgage deeds are signed, you become the owner of the property.
Timescales The process from start to finish usually takes 6-8 weeks, but there can sometimes be delays that are outside of the control of the broker or the lender. Your broker can advise on sensible timescales for payment of deposits and timing of completion, as well as deal with any delays if they arise. This mortgage information was produced in partnership with Mortgages Direct, you can contact them on (robin to confirm this is the right partner/we can use this).
NIF number You cannot buy a property in Portugal without a NIF number (Número de Identificação Fiscal ), which is an identity/fiscal number for anyone wishing to conduct any financial activity, including buying a property. So, apply for this as soon as you start looking for a property. Currently, you must apply for your NIF number in person, or appoint a lawyer or tax office, to obtain this on
your behalf. A NIF number is obtained from a local tax office (finanças), who have offices in all major towns and cities throughout Portugal.
Power of Attorney Just as in the UK, you can authorise someone (normally your lawyer) to act on your behalf with regard to your legal matters in Portugal. This is often wise, as travelling to Portugal to sign documents can become inconvenient or mean that you miss an essential signing date through ill-health or travel disruption. A Power of Attorney can be either general or limited to a specific function (for example, the signing on your behalf of the escritura (Deeds) to your intended property. ¤
GETTI N G A
A Place in the Sun partners with Mortgage Direct who offer products from all the leading banks in Portugal.
IN PO RTU G AL?
For expert advice or a mortgage quote, complete our online enquiry form by visiting www.aplaceinthesun.com/portugal/advice/mortgages
MORTGAGE
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Portugal Legal Guide to Buying in Portugal uying an overseas property is an exciting thing to do and Portugal is a great place to choose. However, it is important to be cautious throughout the process and equip yourself with as much information as possible before setting your sights on that dream house.
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Property Law in Portugal The first thing to consider is that the Portuguese legal system is not the same as the UK’s. Although you don’t necessarily need a lawyer to oversee your purchase, we’d advise you to seek out a reliable independent lawyer who really knows Portuguese law. They will be able to assess whether the contract is OK to sign, if you should pay the deposit, advice on who should own the property, and so on. Another essential person to help with your house buy is the Notary, who will get involved at the end of the transaction. Their role will be to carry
out some basic checks on the property, attend to the signing of the title deed and in some cases register the property.
Budgeting for Property in Portugal The total cost of buying in Portugal could be higher than in the UK and it is important that you consider this from the beginning of your house search. Purchase costs include IMT (Imposto Municipal sobre as Transmissões onerosas de Imóveis), “Imposto do Selo”, and usually Notary Public Fees. In addition, you may also be asked to sign a reservation contract or a Promissory Purchase and Sale Contract and pay a small deposit, which is called a “Sinal”. Signing this contract is the most important sign that you wish to proceed with your purchase, and will effectively take the property off the market. After signing this, you’ll then work towards a full purchase contract (which commits
you to buying the property) and pay a deposit, typically 10%.
Property Surveys in Portugal As is standard in the UK, we’d also recommend you obtain a survey when buying your Portuguese home, as it will reduce the chance of discovering any defects or nasty surprises about the property’s condition after you’ve bought. And if there any structural problems, this will help you to negotiate the price or insist certain works be carried out before the house is purchased.
Property Ownership in Portugal There are other choices to be made when buying a property in Portugal, such as who should own your property, who to give power of attorney to, creating a will – and the implication this would have for Portuguese inheritance tax, or whether you’ll buy your home with other(s) ‘fractional ownership’. All of these will vary person-toperson and should be thought through before undertaking any house buy in Portugal. Again, many of these decisions may benefit from seeking out some informed legal counsel beforehand. ¤
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Portugal Ongoing Costs of Ownership t is also important to ensure that everything to do with the upkeep of your property (community charges if you’re buying in a complex; utilities; Council Tax/IMI – Imposto Municipal sobre Imóveis) is paid up to date before you buy. And just like back home, you should arrange to have all the utilities and services put in your name. You will, of course, have an ongoing obligation to keep up with all of these utility costs and other charges. Nonpayment can have serious repercussions, for example your property being confiscated and auctioned off if you fall too far behind on paying community charges.
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Taxes and Fees Once you’re close to exchanging, you will need to personally apply for your NIF (Número de Identificação Fiscal) – your Tax Identity Number in Portugal. You will be required to have this NIF number when buying your property,
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but also when opening a bank account, dealing with utility companies, taking out insurance, dealing with the tax authorities, or buying a car. So it’s worth being prompt about sorting this out. The tax you pay when you buy a property in Portugal will normally depend on whether you are a tax resident there or not. Tax residence is determined by a number of factors – including how long you spend in that country, if your main home is there and if your main economic interest is there. If you become a tax resident in Portugal, then you would normally stop paying taxes in your home country and pay there instead. IVA (VAT) is payable by the purchaser when the vendor is considered a developer who pays IVA and/or this is the first time the property has been sold or transferred. The VAT rate is a flat rate of 23%. Stamp duty is payable at the rate of 0.8% where VAT is payable. If the house you’re buying is a resale
(second transfer) property, then you will also need to pay Transfer Tax (Imposto Municipal sobre a Transmissão Onerosa de Imóveis). This will need to be paid to the Portuguese Tax Authority within 30 days of the date the title deed is signed. You may also need to pay Mais-Valias, which is a tax based on the increase in the value of the land since the last transfer, although this is not normally a huge amount. ¤ This legal guide was produced in partnership with Paula Meireless Tel: +351 282 350 010 Email: [email protected]
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Portugal Transferring your money abroad Why is currency exchange important? Currency exchange is something that buyers often leave until the last minute when purchasing an overseas property, when in fact it should be considered much earlier. Buying abroad will almost always involve a transfer of money between currencies, meaning that if you skip your research and/or arrange a transfer through a high street bank, you could end you up paying over the odds in fees and poor exchange rates. Using a specialist currency company, such as A Place in the Sun Currency, will ensure you get the support and expertise you need, as well as a competitive exchange rate.
What are the main benefits of using a specialist currency company? 1) Better exchange rates You could save up to 4% on a transaction as specialist firms typically offer better rates of exchange than the high street banks. This is because, as well as operating with much lower margins, they have access to the live currency markets, so if the rate picks up during the day you can benefit with a higher rate. Banks tend to fix their rate of the day each morning, so you wouldn’t benefit from any increases that happen after that point. 4% might not sound much, but when talking about a £150,000 transfer for a property it’s a saving of up to £6,000, which could be spent better elsewhere. Give A Place in the Sun Currency a call on 0800 622 6522 to check out today’s rates or fix a rate for the future.
2) Lower fees The average high street bank charges a fee for each transaction they make for you, no matter how much you are transferring. A currency specialist
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usually only charges a fee on smaller transactions, which can save you money. Typically expect to pay around £5 - £10 for smaller transactions (e.g. under £30,000) and then no charge once you’re transferring larger amounts. A currency specialist can also ensure you do not encounter any bank charges when your money is received in Portugal. Using the wrong type of transfer through your bank could result in “receiving charges” in Portugal of around 0.5% of the amount transferred.
Is using a currency specialist safe? Yes. When buying a property abroad, the funds that are being used are nearly always your hard-earned money, pension or even your whole lifesavings. A Place in the Sun Currency understands how important the safety and protection of your funds is, so here are our key tips on what to check: • Make sure you choose a specialist who are authorised by the Financial Conduct Authority (FCA) •
Go with a specialist that uses segregated client accounts. In short, this ensures that your money goes into a ‘client’ bank account rather than the company’s own, therefore your money will be safe and separate from any of the company’s other business dealings.
From a deposit on a house through to settling the balance, for regular monthly payments or one-off items, A Place in the Sun Currency ensures your funds reach the right destination, at the right time, at a highly competitive rate. A Place in the Sun Currency is a service specifically designed for overseas payments to buy, and maintain, an overseas property.
What types of contracts are available? Currency specialists understand that buyers all have different financial needs and that’s why they offer a suite of services:
For more information go to aplaceinthesuncurrency.com or call 0800 622 6522 in the UK or +44 20 8051 8555 from overseas.
MAKING YOUR MONEY GO FURTHER
Spot contracts A ‘Spot’ contract is the simplest type of currency contract and involves agreeing a price that you are happy with before
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Portugal Transferring your money abroad (continued) you transfer your selling currency (usually Pound Sterling) to the currency company’s client account, immediately after which your funds will be transferred to your buying currency (eg Euros) and to the account of your choice. Spot contracts are agreed by phone or email, and once you have given instruction to buy the currency at an agreed exchange rate, you will be asked to send the agreed selling currency equivalent within a couple of working days – the rate won’t change in that time, as it have been secured at the time of your order.
at which you want to buy. You can set any rate you like, but of course the higher you aim, the less likely the order is to “fill”. Conversely, if you have a budgeted rate in mind which is below available levels, or a worst-case rate, you can set a Stop Loss Order to automatically buy for you should rates move against you. This protects you from rates falling any further, which might otherwise make your property more expensive than you had planned for.
purposes, cash, cheques or direct debits are not accepted.
Forward Contracts
How does the process typically work? This is how we do it at A Place in the Sun Currency
OBTAIN an electronic proof of transfer to keep for your records, which can be forwarded onto your property agent, solicitor or notary. What’s more, we guarantee there will be no overseas bank charges for Euro payments, so the exact amount you buy from us is the exact amount that will arrive.
A ‘Forward Contract’ is used to fix and thereby guarantee an exchange rate now, for a transfer in the future – in fact, up to two years ahead. Commonly used by buyers of overseas property, a Forward Contract can be secured with a deposit of 10% of the selling currency (usually Pound Sterling) followed by the balance of the remaining 90% on or before a specified date in the future. The buying currency (eg Euros) is then transferred by your currency provider to the account(s) of your choice (directly to your solicitor/notary or to your own currency account if you prefer) at the rate initially agreed – no surprises.
Stop loss and limit orders
REGISTER with your currency specialist which is quick, easy and could save you a small fortune. If you register with A Place in the Sun Currency, you’ll be assigned your own personal contact who’ll be on hand to provide support and guidance throughout the process. PLACE your order and send your funds (usually Pound Sterling) through to a UK client bank account. This can typically be done through your online and/or telephone banking service, or by visiting your bank in person to make a transfer. For security
RECEIVE a receipt for your payment and provide details for the beneficiary account – for instance your own bank account abroad, third payment solicitor or a notary who is handling your purchase. Your transfer will then be made immediately (subject to bank cut-off times and internal checks) and payment will typically arrive with the beneficiary the same day or next day.
For more information about A Place in the Sun Currency simply head over to aplaceinthesuncurrency.com or call 0800 622 6522 within the UK or +44 20 8051 8555 from overseas to speak to a member of our team.
MAKING YOUR MONEY GO FURTHER
If you are undecided when to fix your exchange rate but have a best or worstcase rate in mind, you can use a ‘Stop Loss’ or ‘Limit Order’ to automatically buy your currency at a specific rate if that rate becomes available. For example, if your target or budgeted exchange rate for your property purchase is not currently available eg it’s currently 1.15 Euros to the Pound and you plan to wait until it reaches 1.2 Euros, a Limit Order will automatically buy for you should the market move in your favour to the rate
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Portugal Living in Portugal ----LIVING IN PORTUGAL 4 Lifestyle Factors to Consider
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Shipping your belongings to Portugal
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Retiring to Portugal: Extra considerations (pensions, settling in & healthcare)
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“Buying a home in Portugal gives you the opportunity to embrace one of the most desired cultures in the world”
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Portugal Living in Portugal Cost of living One of the most appealing aspects to spending time in Portugal is its affordability. Whether it’s buying a coffee, a beer or menu do día (menu of the day) or travelling by train, you’ll find that day to day living is cheaper than in the UK. Your food budget will be noticeably less if you don’t buy lots of expensive imported goods, and eat fresh produce from local markets and buy local wine (of which there are many great varieties). You will particularly notice the affordability outside the major cities - Lisbon is inevitably more expensive for dining out than anywhere else, even in Porto, but much more so than villages or non-tourist towns. Buying a car and petrol costs are considerably expensive in contrast to many other parts of Portuguese life (and there are toll fees on motorways) but public transport options are cheap and efficient. Do use a currency broker if you are regularly transferring amounts over from your UK based source of income to your Portuguese bank account (there is no sane reason not to) and make sure you are aware of the all the running costs involved with owning a home in Portugal. As well as annual property tax, IMI (see Taxation section) you will also
need to pay condominium charges (community fees) if you live on a development with common areas that need to be maintained - such as gardens, pool, elevators, security. As a rule of thumb wherever you are, the more facilities there are, the higher the charges. If you run your own swimming pool this will incur extra costs, but the cost of household help (gardeners and cleaners) tends to be lower than in the UK (if you are outside of Lisbon). Buildings insurance and contents insurance tend to be similar to those in the UK, and utility and broadband bills tend to be roughly the same, or a little cheaper.
Climate & Seasonality Portugal’s climate is similar to that of Spain’s, with year-round warm Mediterranean temperatures yet with a notably wetter winter season. During the winter months, Portugal experiences similar conditions to many Spanish coastal towns, with on average 5-6 hours of sunshine per day and an average daytime maximum of about 16°C (61°F). During the summer months, Portugal is basked in refreshing sea breezes of its Atlantic and Mediterranean coastlines, with an average daytime temperature of 25 degrees making for pleasant conditions for a spot of golf
“With a similar climate to Spain and one of the most unique cultures in Europe, it’s no surprise that Portugal is one of our favourite overseas property hotspots!”
WHERE TO BUY AND WHAT TYPE OF PROPERTY TO CHOOSE
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Portugal Living in Portugal (continued)
or relaxation time on one of its sandy beaches. During summer days, you can expect 11/12 hours of sunshine per day. Be aware, Portugal’s southern Algarve region can occasionally experience temperatures in excess of 40°C during the summer months (unheard of in the UK!), so be sure to keep hydrated at all times as you slowly acclimatise.
Culture and Language A large portion of Portuguese culture is centred on their appreciation of art, music, drama, dance and literature, which is evident up and down the country. In larger cities such as Porto and Lisbon, visits to the theatre, concerts and galleries of modern exhibitions are common amongst the population, whilst many of their international-scale venues attract tourists from all over the world. In smaller towns and villages, cultural activity revolves around local folklore, especially in mountainous regions, with
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musical groups performing traditional dance and song. Local festivities are very popular during the summer season in all kinds of localities ranging from villages to cities, as well as beach holidays from July to September. In terms of local delicacies, each region of Portugal has its own traditional dishes, including various kinds of meat, seafood, fresh fish, dried and salted cod (bacalhau), and the famous Cozido à Portuguesa (a Portuguese stew). Since Roman times Portugal has been regarded as a country full of wine lovers and winemakers, the Romans immediately associated Portugal with its God of Wine Bacchus. Beer is also widely consumed, with the largest national beer brands being Sagres and Super Bock. Liqueurs, like Licor Beirão and ginjinha, are popular. Portuguese is currently the fifth most spoken language in the world and an official language of countries as varied
as Portugal, Brazil, Cape Verde and Mozambique. If you’re looking to learn the lingo whilst living in Portugal, you’ll be glad to know that the language isn’t as difficult to learn as many think, and there are plenty of local establishments to enhance your skills, especially if you’re living closer to the cities. It may be an idea to learn a rudimentary grasp of the Portuguese language whilst living there, as only just over a third of Portuguese nationals can speak and understand English, meaning that you might find yourself in an awkward situation.¤
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Moving to Portugal? We’ll get you there, no matter whether you’re taking your whole house contents or just a few boxes. “It’s been a pleasure! A-class service, people know what they’re doing, quality but quick and efficient. And very accommodating!” Nico
“Fast, efficient, happy! I am absolutely sure PSS is the best overseas removal company out there.” Suzie
From anywhere in the UK to anywhere in Portugal Request Your Free Guide “Your Dream Move: 17 Essential Tips To Ensure Your Move Overseas Goes Smoothly
Tel: 0800 988 3711
Tel: +44 (0)20 8686 77733 Email: [email protected] www.pssremovals.com
Buying Guide
Portugal Shipping your belongings to Portugal ransporting belongings, from large pieces of furniture to delicate sentimental items, can be a stressful business. The information below talks you through the process of shipping items from the UK to Portugal.
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Is it easy to ship my household belongings to Portugal? It is easy to ship your personal belongings to Portugal but you need to make sure that you pick a fully accredited international removals company. A removals company should have the following accreditations: • FAIM Accreditation, which is the only independent Quality Assurance standard for the International Moving Industry • Membership of the FIDI Global Alliance, which sets a quality benchmark for its members • Membership of the British Association of Removers Overseas Group - BAR OVERSEAS is covered by the I.M.M.I. Advance payment guarantee scheme for your financial protection
How do I go about arranging shipping? Gather a number of quotes from international removal companies and then decide on what service is best for you. Companies will often offer you one of two options; packing that can be completed by their staff or you can choose to pack your goods yourself. Both options will see the use of expert packing materials. You will usually be given a move co-ordinator who can help every step of the way. Companies will often offer you one of two options and depending on your budget you will be able to choose whether you’d like to pack your
WHERE TO BUY AND WHAT TYPE OF PROPERTY TO CHOOSE
belongings yourself or whether you’d like the removals company staff to pack your belongings for you. Usually with both options some packaging materials will be provided.
What happens to my belongings once they’ve been packed up? This will be dependent upon your destination or what kind of service. European destinations can be serviced either via road freight or sea freight. If you’ve commissioned a full household removal via road freight there will be a dedicated vehicle at your home to take your goods away and delivered to your destination. The sea freight service sees goods loaded directly onto the containers, with a customs seal placed upon it. This will then be loaded onto the vessel and delivered to your new home. In both instances you will be given an inventory of what has been packed.
Do I need any special paperwork for the move to Portugal? There are a number of requirements when moving to Portugal and it will dependent upon whether you are a Portuguese citizen or coming from an EU country. If you are a Portuguese Citizen you will need the following details: • Passport • Fiscal Identification number (N.I.F) • Certificate of change of residence issued by the Portuguese Consulate at origin confirming that they have been working and living for more than 12 months in the country. • Registration certificate at the Town Hall in Portugal • Removal inventory in Portuguese • Valuation form for transit cover/
•
standard liability Purchase receipts (only applicable if you are importing any newly purchased goods)
If you are coming from an EU country you will need the following details: • Passport • Certificate of residency confirming they have been working and living for more than 12 months in the country of origin. • European Certificate or N.I.E number. • Removal inventory in Portuguese • Valuation form for Shipment Protection cover • Purchase receipts (only applicable if you are importing any newly purchased goods)
How long does it take for my goods to be shipped to Portugal? The transit time between removals in the UK to the arrival of your goods in Portugal is approximately 3 to 7 days for dedicated loads and 1-3 weeks for part load shipments.
What happens on the day of arrival? Delivery will be arranged in advance. Depending on the type of shipment and ease of access to your new property your belongings will be arrive in a dedicated vehicle or a sea freight container. Once your delivery reaches its destination the unloading crew will help unpack your goods and place them in the correct rooms. ¤ This shipping guide was produced in partnership with PSS Removals Tel: 0800 988 3711 Email: [email protected] www.pssremovals.com
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Buying Guide
Portugal Healthcare
Wills & Inheritance Tax
n Portugal there is a National Health Service -Serviço Nacional de Saúde (SNS) -that is generally excellent, and English is widely used as the language of communication. The World Health Organisation ranks it number 12 (the UK is number 18). You should be treated in the same way a Portuguese citizen would, but although state-provided healthcare in Portugal is generally free of charge, there is a patient contribution, which varies depending on how you access the health service. For example, GP consultations cost less than a consultation at the accident and emergency department of a hospital. X-rays, scans and other tests also require co-payment. The hospital network consists of modern and wellequipped units throughout the country and to make overseas patients feel more comfortable they have been implementing patient monitoring and personalised care programmes. Retirees can also be reassured that the superb Integrated Medical Emergency System offers rapid-response times - in fact the average response time of seven seconds is much faster than the UK’s. If you are a national of one of the 27 European Union countries, Iceland, Liechtenstein, Norway or Switzerland, you must show your European Health Insurance Card or EHIC (issued in your country of origin) and your passport or identification document in order to gain access to free or the low-cost healthcare referred to above. Overseas citizens holding Portuguese residency permits must be registered at a health centre (centro de saúde) and must hold a “User’s Card”, which may be obtained at the Health Centre by presenting a document showing proof of residence authorisation. Non-EU expats will also need to provide a social security card. Private healthcare in Portugal is steadily gaining popularity among expats and becoming more readily available. All the private medical centre and private hospitals work with the international private medical insurance companies and there are reciprocal agreements in place with UK insurers such as BUPA. There are many British doctors and dentists in private practice in Lisbon, for example. ¤
I
WHERE TO BUY AND WHAT TYPE OF PROPERTY TO CHOOSE
eople fail to make a will for many reasons but when you buy a property in a different country, or relocate their full time, it is even more important that you make a will (and keep it updated). It will save a lot of extra heartache (and possibly expense) to those left behind if you do, especially when they might me living in a different jurisdiction. By Portuguese law, if you do not have a will and die resident in Portugal all your assets will be distributed by the “forced heirs”. However their Civil Code states that the will of a foreigner national is governed by their national law so a will that is valid under UK law will be recognised by the Portuguese authorities. However …the translation and legalization costs can be very high (running into several hundred pounds) and the process cumbersome so it is recommended that all foreigners living in Portugal make a Portuguese will that will save time and money - and as a foreigner you do not have to leave it to forced heirs. Your Portuguese will (and you can have one in each country) will allow to your heirs to access the assets they inherit, not only real estate, but also others such as savings accounts, which your surviving spouse will not be able to access, unless previously recognized by the Portuguese authorities as the lawful heir. Inheritance Tax (IT) in Portugal is very favourable. Not only does it only apply to Portuguese assets, it’s also only 10 per cent - and your estate will be exempt from the tax if you are leaving it to a spouse or your children. ¤
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Portugal Retiring to Portugal: Extra Considerations ortugal is one of Britons’ favourite retirement destinations - and for many good reasons. It’s got a great climate, beautiful coastlines alongside historic towns and offers a cost of living that is lower than many places in Spain. There are around 60,000 British people living in Portugal, and whilst those relocating for work tend to be in the two main cities, Lisbon and Porto, retirees tend to head for the Algarve. Viewed by many as a gentler, less developed version of the Costa del Sol, it offers world-class golf resorts, restaurants, sports facilities and marinas. Portugal has been very forward thinking about attracting wealthy retirees (and a fair few semi-retired) from overseas with tax incentives so on the Algarve there are also Scandinavian and other northern European populations, alongside the British and Irish. Let’s also not forget that attractive areas such as the Silver Coast, Alentejo and the coastline south of Lisbon are also attracting more interest - and the island of Madeira too. But making a successful move to Portugal requires some careful forward planning and it is wise to take financial advice too. Here we provide a few pointers on the practicalities of moving to Portugal, including healthcare, pensions, wills and taxation.
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Transferring your UK pension to Portugal Retirees living in Portugal who are in receipt of a UK State Pension can opt to receive it into their UK bank or their Portuguese account. You may claim your UK state pension by contacting the International Pension Centre in the UK. There are different ways to receive it, either in the UK or directly in Portugal. For non-EU countries it will depend if there is an agreement in place between your country and Portugal
WHERE TO BUY AND WHAT TYPE OF PROPERTY TO CHOOSE
(including the UK post-Brexit). If you decide to have your pension paid into your UK bank account in sterling, the rate received when you transfer it into euros will obviously vary, depending on the exchange rate. However, if you use a currency transfer (or FX company) to send euros into your Portuguese account (see Settling In for how to set up a Portuguese bank account) they can set up a regular payments plan for transfers that will help you budget every month. As you are only too aware in recent months, currencies yo-yo up and down and currency brokers can also offer you better rates than banks on the transfer of lump sums - not just regular transfers like pension or any other UK income. In Portugal the taxation of pensions depends on what type is being used - they differentiate between State Retirement and Occupational Pensions; Government Service Pensions and Personal Pensions. If you have complex or multiple pension funds it is advisable that you seek advice from a financial
advisor before you leave the UK to find the most tax-efficient way of structuring these assets, whether in the UK or Portugal, or both. It is key that they look at your investments as a whole, not piece-meal, at the outset.
Settling in Many of the estate agents well versed in selling to overseas buyers will provide help in matters far beyond the home purchase process, from how to register for utilities, to how to find tradesmen with to help fix it up and healthcare and schools. Some agents are UK expats themselves, and will have gone through the same process so understand that a
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Portugal Retiring to Portugal: Extra Considerations (continued) little hand-holding can go a long way. Even if your agent doesn’t have a dedicated “after sales” department for such matters, you’ll find plenty of people ready to help, from expats already based on your street or development (do go and introduce yourself), to various societies and forums (such as expatsportugal.com etc). On the Algarve, if you play golf, you’ll quickly find yourself part of an expat social scene. Bars and restaurants organise golf days, with followed by dinner and drinks. There are many other ways to meet people to - from theatre, biking, bowls or running clubs on the Algarve to pure social clubs. There is a very active side to a life lived mainly outdoors, and expats do always say how much healthier they feel after a move to Portugal. Portugal is a very friendly place but Portuguese is a tricky language to learn, whilst we are lucky that English is widely spoken in the main cities and tourist hubs, it is always useful to try and learn some basics. If you have purchased a property you will have already set up a Portuguese bank account, but if you are initially renting you will need to do this - open an account, you will need your passport, a Portuguese fiscal number (which you can obtain at the local Financas), proof of income and proof of address. Bear in mind that Portuguese personal banking is not always free. Many current accounts have small admin charges and small fees for replacement debit cards or counter withdrawals etc. You will also need to sort out your residency. You will need to register with the town hall (camara) to obtain your “residencia” (or Certificado de Registo de Cidadao da Uniao Europeia). For this you will need your passport and sign and declare that you have sufficient funds to support you and your family,
WHERE TO BUY AND WHAT TYPE OF PROPERTY TO CHOOSE
along with valid medical insurance. You may be asked to provide other documents such as bank statements. Note that you should take advice about the type of residency to apply for (see taxation section). If you are taking a dog to Portugal, you’ll also need to get it registered with the local council (and micro-chipped). What about driving in Portugal? You may drive in Portugal using your valid EU driving licence from your own country for up to 90 days if you are not a resident. After 90 days you apply for your residencia and, once it’s issued, you have 30 days to register your driving licence with the Portuguese driving authorities (IMTT). Make sure you carry your documents with you at all times when driving (these include your licence, insurance, IPO (similar to MOT), fiscal ID card, and Certificado de Matricula (vehicle registration certificate).
and - just like France - suffers a few complaints about it fondness for bureaucracy. But the good news it that it’s one of the most generous in Europe and so that’s been helping to attract expats. There’s a lot of information on the internet but it’s always worth checking with a reputable tax accountant to ensure you’ve got it covered correctly for your personal situation. The different types of residency in Portugal can have a big impact on your taxes so your advisor should suggest which types might help reduce these. Likewise, you
Portuguese tax for retirees When it comes to taxes, Portugal is just as complex as any other country,
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Portugal Retiring to Portugal: Extra Considerations (continued) will need to decide where best to keep savings and investments - whether to leave them in the UK or move them to Portugal. Generally speaking, Portuguese residents are taxed on salaries, capital gains, real estate earnings and income from abroad. Foreign earnings may be covered under a tax treaty that will avoid you paying tax in both countries (a double tax treaty). Part time residency and other situations may mean that income tax is only to be paid on income in Portugal and not on income earned in other countries. If you retire to Portugal and spend more than 183 days a year there you should become tax resident there. In 2009 a regime was introduced to attract overseas individuals and families to Portugal by making it beneficial to be tax resident. This is the Non-Habitual Resident Scheme or NHR, and has been very successful at attracting Northern European expats, especially Scandinavians who are highly taxed at home. You can enjoy NHR status if you have not been a Portuguese tax resident in the previous five years. The status can be maintained for ten years and successful applicants enjoy a flat rate of 20 per cent on income and preferential rates of tax on pensions, dividends and some other forms of income (from a non Portugal source). There is also no inheritance tax, gift tax or wealth tax in Portugal for non-habitual residents. Also non-EU nationals can apply for the fast-track “golden visa” scheme if they buy a property worth €500,000 or more (seek specialist advice on this if relevant). Remember you will need to inform HMRC that you are no longer tax resident in the UK and that you will need to register as a tax payer in Portugal. You need to complete a
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registration form called the “fiche de inscricao” and then submit it via your local tax office. Portuguese tax residents are required to submit an annual income tax return early in the following year after their arrival. The deadline for the Portuguese income tax annual return depends on the type of income you receive but for retirees (rather than employees) it is typically April 30th. The tax year follows the calendar year and ends on the December 31st. Beware that failing to correctly submit your Portuguese tax return and payment on time can be costly. There are also some annual taxes to pay. The Portuguese equivalent of council tax (Immovable Property Tax or IMI) is based on the ratable value of your home (ratable value is around 70 per cent of the sales price). This also depends on the locality and whilst for rustic properties the tax is 0.8 per cent, for urban homes the rate varies between 0.3 and 0.8 per cent (depending on when its tax value was assessed and locality). Properties with a tax value of €1m or over will be subject to an
additional tax of 1 per cent. If you drive you will also need to pay road tax (IUC).
Additional paperwork We have already referred to driving documents, healthcare, pets and don’t forget life assurance (seguro de vida). In Portugal, life insurance may be required for a mortgage, and do assess the burden of retaining foreign life insurance while you are resident in Portugal - will your existing life insurance policy move across borders? If you are over 65 you may apply to your local Junta de Freguesia (civil parish)for a Cartão Senior(pensioner card) that will entitle you to certain discounts including train travel or on certain entertainments. ¤
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Portugal
Buying Guide to Portugal APITS Limited 4th Floor, 291-299 Borough High Street, London, SE1 1JG T +44 (0) 20 3207 2920 W aplaceinthesun.com