Investing In Lisbon, Portugal

Hi there, I'v just put down a deposit on a new development in Pamella Village outside Lisbon - it has a guaranteed rental of 5% for the first 3 years, its a new dev so i suppose until they get up and running after that there's a pooled rental. Also has 5 weeks usage, Golf membership and spa membership.

Has anyone any idea as to how / what the market is like in Lisbon and I believe a dual tax system applies here.

It seems to good an opportunity to pass up, it's my first investment and would appreciate as much information as possible.

Thanks
M

Re: Investing In Lison Portugal

Tax Treaty between Portugal and Ireland is [broken link removed]

it has a guaranteed rental of 5% for the first 3 years,

Click to expand...

This is usually built into the price you pay to acquire the property. So compare market value in the area and what you pay. Sorry can not help on this one, Google may...
Is that inclusive of maintenance charges?

One of the sticky point for me is what happens after year 3?
- you suppose pooled rental but not sure...
- if polled rented, what do you do when tenant does not pay and you are based in Ireland?
- what's about Maintenance charges after 3 years?
- "5 weeks usage": i take it it is only during the first 3 years... After that, do you have 52 weeks usage if you wish?

Is it that you are entirely own your own after year 3? if you are, you will find out that managing a property abroad brings its own difficulties unless 1- you pay a premium for somebody to manage it locally
2- you have relatives who could help.
and even though....

May be not very helpfull but raising few simples questions for you to answer in order to make the decision that is right for the level of risk you are willing to take....

Hi m
could you give me any info on the area and prices where you have bought.
regards
gilh

gilh, could you have a look at my comment here?

Thanks.

hi
I've done some research into this development in Lisbon
- Portugal does have a tax treaty with ireland.
I have done a lot of research on this investment and these are the
mains points I have come up with that you should consider
- 5% rental income tax due in Portugal and balance in ireland
- Property tax approx 0.8% which is based on the value of the property
and is set by local council, so as your property increases in value so does
your tax
- In your contract when the initial 3 yr rental is up, you must sign up
to a new contract with the developers, this is not an option, the
only way out of this is to have a clause written into your contract
ie. you can never rent out this apartment yourself
- 25% capital gains tax
- could be up to 5% penalty in Portugal if you repay your mortgage before agreed term
- during the 5 weeks usage you more than likely will not get to use
your own apartment, they will give you whatever is available at the time

I have looked at several of these schemes and they all seem
to work the same.
You would be advised to do a spreadsheet say over a five
year period with all your income and outlays, because what i found
is unless you are in a position buy for cash or put down a
large deposit on the property you will not make anything

Good luck hope you find this helpful

I looked at this investment and I asked myself the following questions.

1. Would I holiday in a complex that is 20 Km from the nearest beach ?

2. Would I be attracted to a complex that has a golf course that has no Par 5's and the front nine and the back nine are exactly the same yardage (this suggests to me that this is a nine hole golf course) ?

Overall - What is the attraction for potential renters and potential buyers in the long run ?

I could be completely wrong as the area might be fantastic and Pamella village might be beautiful but the big question is "Have you gone to see the area before you purchased ? "

I hope you have and that your investment doubles for you. I'd be interested in your views.

Regards,
MikeM.

The eastern algarve is great value as it is only in the last 3 years that it has seen large inward investment in new golf courses like Monte Rei under construction Quinta de Vale on the banks of the Guadiana River 50km of the best beaches. The west coast is very wind swept

airdeall said:

The eastern algarve is great value as it is only in the last 3 years that it has seen large inward investment in new golf courses like Monte Rei under construction Quinta de Vale on the banks of the Guadiana River 50km of the best beaches. The west coast is very wind swept

Click to expand...

Anyone buying in Portugal can look at the websites and have plenty of ways of seeing rental and current capital values.

The only other point is the annual tax that is payable and the fact that there does not appear to me to be any crackdown in Portugal on planning. IMO this will likely lead to the entire coasts being concreted in due course. So make sure that the location you buy in is as new building proof as possible ie not 200 yards from beach when another will be built 100 yards from the beach in due course.