The Buzz on Buying Property In Portugal: Luxury Real Estate In Portugal
Interested in buying property in Portugal? This article offers advice on what to avoid and expect. Learn about Portuguese real estate regulations before buying luxury real estate in Portugal.
When looking at property for sale in Portugal, it’s important to be aware of the legal processes and required registrations, plus property transaction costs, capital gains tax and other fees associated with buying property.
Will your next home be a luxury villa in Portugal or an Algarve beachside property? Around three-quarters of people who live in Portugal own their own homes, a figure that has remained steady for the last decade. There are no restrictions on foreign property ownership here, and non-EU citizens can get a five-year residency permit (known as a golden visa) if they buy property worth a minimum of €500,000.
To buy a property in Portugal, you’ll need to have a Personal Fiscal Number (Numero fiscal de contribuinte), which you can obtain from your local tax office. If you choose to open a bank account, you’ll be automatically assigned a Personal Fiscal Number. While you don’t necessarily need to open a bank account, it can be useful when transferring money and making regular payments during the home buying process.
All estate agents need to be registered with the government and display a licence number (Associacao de Mediadores Imobiliarios). You can find out whether your agent is registered by contacting the Instituto da Construcao e do Imobiliario. Estate agents in Portugal work on behalf of the seller on a commission basis. Bear this in mind as while you won’t need to pay estate agent fees when buying a property in Portugal it may be worth taking independent advice before jumping in. Also think about reselling in the future. Capital gains taxes can take out a significant chunk of any profits (especially for non-residents), as can estate agent fees. Therefore, those planning on not spending a great deal of time in Portugal should consider if they can recuperate costs on their investment in the short term.
If the property requires work you can check the land’s usage licence (licenca de utilizacao) at the local town hall. You’ll then have to find an architect (arquitecto) and a builder (construtor) (high quality of life). 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. With this in mind, you should always have a snagging report drawn up before moving in to alert you to any possible issues as soon as possible. The aforementioned depends on several factors, including how long you plan to stay in your new country of residence, the current property market and the cost of an expat mortgage.
After several years of uncertainty and falling house prices, the Portuguese economy is showing signs of recovery. Whether you should rent or buy depends largely on location and property type. We hope some of the information helps with your search for a property in Portugal but please contact us with any further questions or for help to find you dream home and navigate the Portuguese luxury real estate market.