Whether it is the laid back lifestyle, the sun-soaked beaches or the excellent golf courses that make you want to buy a property in Portugal, make sure you get independent legal advice before investing. By independent we mean any solicitor that you have independently researched yourself as opposed to the local solicitor recommended by the estate agent! Your solicitor can take charge of verifying contractual information and help arrange a house survey to check if there’s anything wrong with the property.
Though the global financial crisis hit Portugal hard, it’s now making an excellent recovery and its economy is stabilising.
There are no restrictions on foreign property ownership here, and non-EU citizens can get a five-year residency permit, known as the Golden Visa, if they buy property worth a minimum of EUR 500,000. In addition to allowing you to work or study in Portugal, the golden visa allows you to apply for permanent residency after five years.
To buy a property in Portugal, you’ll need to have a Personal Fiscal Number (NIF) which you can obtain from your local tax office. You do not have to physically be in Portugal for this and can give your solicitor power of attorney to do this for you.
What is the cost?
Fees and taxes include: Stamp duty: Levied at a flat rate, 0.8% the value of the home. Property transfer tax: Imposto Municipal sobre Transmissões (IMT): This is calculated on a sliding scale depending on the cost of the home. You also need to factor in the legal and notary fees (both usually in the region of 1% of the value of the transaction.
Build your own home in Portugal?
It is feasible to build your own home in Portugal once you buy a plot of land (Iote) with planning permission. You can check the land’s usage licence (licenca de utilizacao) at your local town hall.
You’ll then have to find an architect (arquitecto) and a builder (construtor). You should obtain quotes from at least three professionals, ensure they are fully insured and check examples of their previous work, as the lowest offer might not give you the best value for money in the long run.
Builders are responsible for any minor defects that occur within a year of you moving in, and any structural defects for five years after completion. You should always have a snagging report drawn up before moving in to alert you to any possible issues as soon as possible.
Would you like to rent your property in Portugal?
If you rent a property to tourists in Portugal you must have an Alojimento local licence for the property. There are various requirements, including compliance with Health and Safety, registration of floorplans with the local council and installation of signage and First Aid equipment. If you do not obtain the licence you will be fined and it is very easy to be caught out. You will also need to declare your income from the rentals in Portugal regardless of where you are resident.