Thinking of buying in Portugal

L

LadyMuck

Guest
Hello
Myself and my husband are thinking of buying abroad, specifically in Portugal, along the Silver Coast. The property would be a holiday home only, and we have no interest in renting it out, although we would lend it to friends or relatives.

However, we are at the very start of this process, so would be interested to hear from anyone who has bought in Portugal - specifically with recommendations for any websites or books that go through the process step by step. Needless to say we haven't a word of Portuguese (yet) so we will need a bit of hand holding along the way, so any advice that anyone wants to give would be most welcome.

Thank you!
 
We purchased in portugal in 2007 and would recommend that by finding a really good solicitor is the best advice we can give you. They say never go with the solicitor recommended by the agent ( which we did) but we were lucky. There are lots of things to know so if you want to PM me i could tell you how we got on
 
I live in central Portugal, about an hour from the silver coast, and am happy to share all my secrets :D

Sarah W
 
We have visited Lisbon and the surrounds many times and hope to go over in Sept., to look at property. The area around Ericeira is very beautiful and charming, very traditional with gorgeous beaches. Any further info would be much appreciated.
 
For information, www.expatsportugal.com is very comprehensive - all the questions you've ever thought of of have probably been answered and, if not, you can ask! For property in the central area try [broken link removed] - the book they recommend (by Gabrielle Collison) is excellent.

Sarah W

www.casadatoupeira.com (a great base for exploring the area!)
 
Our experience went well, we knew what area we wanted to buy and that i think is half the battle. we had been travelling to the particular area for years so we knew it well. But a member of my family bought into one of these complex's in an area outside Lisbon that i dont think is fully completed still and you have the apt for a couple of times a year and it you get rental income form it etc.... and if she could get out of it now she would. She comes to our place for hols instead !
We arranged to look at properities with agents before our scouting trip and in the end after spending two days looking with them we scouted the agents ourselves and found our place. You are always advised to use a solicitor you have picked rather then the agents one but of course we went with the agents solicitor !!!! but she turned out to be fantastic and we use her still to pay our Fiscal tax once a year.
The language barrier is of course a big problem and in Portugal when you put an offer on a property and its accepted and 1st contracts are signed you cannot back out. if you do you loose your deposit which is 10% of property price, If the vendor back out they must pay you the same. Legal fees & notary fees average about 10-12 K so you need to account for that on top of purchase price.
We also made wills and they cost us €800. You need to pay property management fees monthly if its an apartment, you have Water, electricity, refuse, on top of management fees from the different services. You are liable for property tax that must be paid in April every year and its a percentage of price of property. Unless you hire a fiscal rep you must travel yourself and do paperwork and pay it at the locla council dept in the area. Fiscal rep charge is €150.00 per year.
Hopefully that gives you an idea from our experience of buying and having a property in Portugal. But we love it and hopefully in our later years spend more time there.
 
Couple of corrections, Glynner, if I may be so bold ;)

If the vendor pulls out once the promessa (initial contract) is signed they have to pay DOUBLE the 10% deposit so there is a big disincentive for them to withdrawn.

Not sure where the €10-12k for legal and notary fees comes from! On the two houses I've bought the legal and notary fees were less than €2000 in total (per transaction). Perhaps you were including Stamp Duty? This is on a sliding scale depending on the price of the property and whether it is to be a main residence or a holiday home;

Resale properties - including ruins, land, old houses - are subject to Imposto Municipal Sobre as Transmissões (IMT) tax. This must be paid up to three days prior to Escritura. The level of tax levied is on a sliding scale and is a percentage of the purchase price.

If the property is your sole residence then the taxes are levied as follows:
Primary Residence
under 92,407€ 0%
92,407€ - 126,403€ 2% minus 1,848.14€
126,403€ - 172,348€ 5% minus 5,640.23€
172,348€ - 287,213€ 7% minus 9,087.19€
287,213€ - 574,323€ 8% minus 11,959.32€
Over 574,323€ 6%
If the property you are purchasing is a second property such as a holiday home then the taxes are calculated as follows:
Second (Holiday) Home
under 92,407€ 1%
92,407€ - 126,403€ 2% minus 924.07€
126,403€ - 172,348€ 5% minus 4,716.16€
172,348€ - 287,213€ 7% minus 8,163.12€
287,213€ - 574,323€ 8% minus 11,035.25€
Over 550,836€ = 6%
Agricultural (rustico) is charged at the flat rate of 5%, whereas Urban land (urbano) is charged at a rate of 6.5%.

If you are unsure how much the IVA or IMT will be, it is advisable to check with the local Finanças before you enter into a Promessa Contract.

*The above figures were current as of January 2011.

Taken from www.gekkoportugal.com - also contains lots of other useful info.

Finally you are not required to make wills, although it is of course a good idea.

HTH

Sarah W

P.S. A good percentage of solicitors here speak good or passable English and google translate is your friend :D
 
Yes Sarah - I am sure it did include stamp duty, i was surprised how much extra we had to come up with as it was a lot in my opinion. Our IMT tax has only works out at on average €600 per year and with the fiscal rep charge €150 on top We allow about €800 in our budget. We made the wills because we were not sure as to the law on property regarding a death, I know France has a funny set up in that area of law and when you dont live there full time, you do not get the same level of information you would get if you were mixing with expats and locals living there full time. So we just felt to have something in writing would leave the kids better equipped. I remember coming home on the flight after we signed first contracts thinking what did we do !!!!! but we dont regret one minute of it.
 
Thanks to everyone for your help. We're heading out to Portugal in about 10 days or so to start looking at property. I'll keep you posted as to how we get on.
 
Having bought a place in Portugal 4 years ago, the main advice I would give is to look at re-sales and not allow yourself to be pushed into buying a new build. It's the only way you will get a real feel for the value of properties.

We bought through Remax and I think you're probably better off using a company like them rather than some place that specialises in dealing with expats.

Regards
Homer
 
I agree completely with the last coment about resales. In the area that I bought, property aimed at foreigners (ie in new tourist developments) is priced about double the going rate that you could buy for through a local estate agent.

A good site to search is sapo.pt Take 'casa' option and then search your area.
 
Thank you all again!

Thanks again for all the advice - keep it coming! We had a successful trip over to Portugal in October and are travelling again in January. In no real rush to buy and we want to be picky. We've been using sapo.pt a lot and have already ruled out apartments that are new builds - have seen too many online that are half-occupied and don't really want to go there. Have seen a couple of places that might interest us but the price will have to come down a bit.

Taking off again in January for more househunting. We'll keep you posted!
 
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