Buying property in Portugal. Interview with the sales consultant of Ideal Homes
Portugal is a very beautiful country with a mild climate, awesome historical architecture and endless ocean. Now the real estate market of the country attracts lots of foreigners even during the COVID time.
Why is it so profitable to buy property in Portugal? What is the process of buying real estate? What are the property prices in Algarve? Alena Martynenko discussed all the details with Sasha Sharpley, sales consultant of Ideal Homes Portugal.
About Ideal Homes Portugal
Multi-award winning real estate agency based in the Algarve, Ideal Homes International provides a one stop shop with over 35 years combined experience in the real estate industry. You can speak with experts in a variety of fields from determining the best investment location in the Algarve, Portuguese residency and taxes, financial assistance from their in-house mortgage broker along with property and rental management services.
As Sasha said, Ideal Homes is a unique company. The agency is able to offer their clients literally anything. Many of the clients want to make the process of buying property as simple as possible. And the team of Ideal Homes help them to choose the right property depending on what they are looking for. They provide customers with presentations, zoom calls, virtual tours and so on. The company has a number of spreadsheets showing an extrapolation of all the kinds of rental income, capital appreciation. Of course they help with lawyers, banks for having mortgages, furniture and all the things that a client needs.
During the pandemic the agency had to switch the methods of marketing and it was really successful.
One of the most developed regions of Portugal — the Algarve
Portugal is a first world country. You have any services you need. It’s not the wealthiest country in European Union, but not the poorest either.
Ideal Homes specializes in property in the Algarve. It’s a southern coastline with many wonderful beaches (approximately 200). It’s warm here, but not as warm as in Spain for example. The climate is so mild.
There are lots of golf fields in Algarve, holidaymakers, Faro International airport, fantastic restaurants, sea food and so many entertainments. What is more, it’s very small amount of crime in this region: women feel very safe here.
It’s a very in-demand place. People are highly motivated to come here because of the very relaxed atmosphere. Portuguese are very laid-back and open to tourists. Lots of them speak English and you don’t need to change your behaviour when communicating with them.
All these factors make the Algarve a perfect destination. All the modern buildings have high quality of construction. We follow all EU standards. The biggest part of investments is going to the materials.
Visiting Portugal in COVID period
There are some rules due to the pandemic. You should wear a mask everywhere outside (supermarkets, shops, restaurants, etc).
The COVID vaccination programme is going well. The situation with the pandemic is a temporary thing, and we hope that the 2nd part of the year will be a recovery period in terms of travelling, tourism and so on.
The beginning of the next year, as Sasha perhaps, will be more quiet back to normal.
The Tourist needs to show a negative test before coming or he should have a digital COVID passport.
Investing in real estate
Lots of investors come from all over the world. Ideal Homes mostly deal with international clients. Many customers come from The USA, UK, Arabic and Scandinavian countries .
Property in Portugal is not so cheap. The demand is high. If you want a luxury two-bedroom apartment, you need approximately 400 000 €. A good villa will cost 600 000 — 700 000 €. And there are really no limits and the prices depend on location, window view and so on.
Of course in the countryside the prices are cheaper.
70% of the market is looking for a two- or three-bedroom luxury apartment in a town close to the beaches. Average price — 500 000 $.
Algarve is heterogeneous. Different areas of Algarve have different characters and characteristics. This region has something for everybody: both for youth and for older people.
The process of buying property in Portugal
One of the attractions of Portugal — it’s very easy to buy property there. The process of purchasing is the same for everybody. All the taxes are absolutely identical. It depends only on the property price, but not on the nationality of the customer.
The process is the following:
- choosing the property you like;
- negotiations with a seller;
- consultation with a lawyer;
- putting down the reservation;
- collecting of the paperwork by the lawyer, he confirms that everything is alright with the property ;
- drafting the contract with all the terms and conditions (with the help of the lawyer);
- signing the contract;
- paying the deposit;
- coming to Portugal to meet the notary (or getting a power of attorney for the lawyer to do it);
- getting the property paperwork registered on your name.
And the property is yours!
All contracts in Portugal must contain the following conditions:
- if you interrupt the deal, you don’t get the deposit back;
- If the seller interrupts the deal, he should pay you a double deposit.
All the banks in Portugal can lend the mortgage to property buyers. All the clauses for Portuguese and foreigners are the same. The rules differ for those who get income outside the country. But the bank will lend you only 80% of the property price.
It is property transfer tax in Portugal which is based on the purchase price of the real estate. Also you should pay lawyer, notary and registration fees.
Eg. if you buy the apartment that costs 500 000 €, all the fees will be around 7,5%. All taxes are not too high. You should pay 500 euro from 500 000 for cleaning, annual property tax, garbage and so on. Utilities in condominiums cost 1200 euro per year.
All the costs are quite low in Portugal in comparison to other european countries.
In current form the Golden Visa is terminating at the end of this year. But if somebody wants to buy property now, he’ll get the Golden Visa according to current rules.
But if you need to get a Golden Visa, you have to spend 500 000 euro in cash on the property. What is more, you have to stay in Portugal minimum 7 days per year, 14 days in total between 2nd and 3d year. Then you will have free access to the Schengen area, Switzerland and Ireland.
After 6 years you can get portuguese passport.