Finding
Your Ideal Property
The first step is to find a Government licensed real estate agent
('mediador'), whose conduct is subject to enforceable rules. Note
should be taken that buying through an unlicensed person could
result in all parties being heavily fined. Always use a reputable
lawyer, preferably recommended, to whom you can entrust your power
of attorney. Once you have agreed a price on your chosen property,
have it surveyed. There are several Chartered Surveyors in the
Algarve who are familiar with all building styles and regulations.
Offshore
or Not?
After consultation with you
accountant,decide whether you should purchase your property through
an offshore company. This has several benefits, such as avoiding
the high levels of inheritance taxes payable if the property is
owned directly. Because the deeds are registered in the company
name, it is also inexpensive to transfer ownership of the property
- simply a matter of transfering the shares of the company. Offshore
company ownership is also a means of maintaining anonymity with
regards to the purchase.
SISA
and Other Taxes
Other costs related to your purchase must also be taken into consideration:
a).SISA
tax (purchase tax) imposed by the government. This tax can vary
widely and is unavoidable except where a property is already owned
via an offshore company.
b)
Notarial
and Registration fees, are also unavoidable and amount to aprox.
2,5% of the declared purchase price
c)
Lawyers and legal fees, vary from 1,5% to 2%. A major benefit
is that power of attorney can be given to a lawyer, saving you
time and travel costs to sign documents personally.
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Buying
Your Property
Having agreed to purchase a property, it is normal procedure in
Portugal to lodge a 10% deposit with your lawyer. This is a sign
of 'good faith', and the vendor should then withdraw the property
from the market. A promissory contract is usually signed after
searches by your lawyer, within one month of the deposit being
made. This is a commitment to purchase/ sell the property, and
there are usually penalties if either party breaks this contract.
When a promissory contract has been agreed between lawyers, it
is signed by both parties and the deposit passes to the vendors.
it is non-refundable except where
clauses have been agreed, such as 'subject to mortgage' etc. A
date then is set forth for the signing of the 'escritura' or final
deed. This is usually 3 - 4 weeks after signing the promissory
contract. Once done, and the property has been registered with
the land registry, it is legally yours.
Property
Management and Letting
Once you have decided on the type of property and the area, you
should also consider hoe often you will be staying there. Could
you offset costs by renting the property in the high season? What
kind of property brings the best rental income? On-going management
and maintenance costs also need to be considered. Many reputable
companies specialise in this field, and indeed we have our own
associate company which will be pleased to give a quote.
 About
This Information
This is simply intended as a helpful outline and 'food for thought'
for anyone considering buying a property in the Algarve. We can
provide in-depth-professional information and advice based on
many years of experience in the region. Please contact us to arrange
for a detailed analysis of your individual situation. <
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