Achieving the dream of buying property or living in Portugal

You dream to have your own house near to the beach, and enjoy sunny days ? It all starts by a first thought… Like any big project, it takes a vision and a succession of small steps that take you closer and closer to your goal. People who have successfully made the move to Portugal didn’t wake up one day and think, ‘It’s official, I’m moving overseas today!’ Instead, they started with a daydream– the thought of an apartment overlooking the Mediterranean or a villa with sun-soaked terrace on which to relax and enjoy one of the local wines.

From that initial daydream tiny steps can be taken, and with each one the vision becomes more and more achievable. Looking on the internet for properties on Monday could lead to emailing an estate agent in Sétubal or Tavira on Wednesday. A phone conversation with the estate agent may lead to research
on the buying process. A few hours on expat blogs over the following weeks gives you more information about the actualities of buying property and living in Portugal. The next step may be to visit a property
show and discover financial options that you never knew were available.
Why not make 2017 the year that you start taking action? Search the internet, go to an exhibition, book a visit to Portugal, buy a book or create a journal outlining, or simply contact Real Estate In Sétubal, everything you want. You have a choice – you can focus on continuing your life as it is, or you can focus on how great it will be to have your own place in Portugal, somewhere you can enjoy regular holidays and hopefully use to generate a bit of rental income, or somewhere to move to permanently and enjoy a completely new lifestyle.

Can you actually buy property in Portugal?

Nationals from European Union (EU) countries, including the UK, can buy property and live freely in Portugal. If however, your nationality falls outside the EU, while you may be able to buy property in Portugal there are likely to be restrictions on the length of time you can spend in the country each year, and your employment options might be restricted. One option that may be possible for non-EU citizens is the ‘Golden Visa’ – an investment visa which can be used to obtain residency.
You can find out all the information relevant to you by visiting the Portuguese Embassy website. We can also perform a free consultation to educate you on your options. Our estate agents and legal consultant specialise in foreign property buyers in Portugal, and will be able to help you understand local procedures and laws.

Money matters

The key fnancial points to consider are:
  • The total amount of money you have available to purchase a property.
  • If you buy with a mortgage, how much of a deposit you will need and how you will service the monthly repayments.
  • Whether you need to re-mortgage your actual home to release equity.
  • Costs that come with buying property (i.e. taxes and fees).
  • Your maximum purchase price (including taxes and fees).
  • The cost of maintaining the property and spending time there.

What other costs are involved in buying a Portuguese property?

There are a number of additional costs involved in purchasing a property in Portugal, and these will vary depending on the price of the property. As a general rule of thumb, you should allow around 8% of the purchase price to cover all taxes and fees, including:
  • Transfer Tax (IMT- Imposto Municipal sobre Transmissões) – most of your extra costs will go towards this. If the property will be your primary residence then no transfer tax is payable on thefirst €92,407 of the purchase price (or tax rateable value, if higher). After this amount, IMT is levied on a scaled rating system, but typically works out at around 4-5%. If your purchase is a holiday home, then IMT of 1% is levied on the first €92,407 in addition to the higher amount. IMT payment will usually take place a few days before completion at the notary’s office.
  • Stamp Duty (Imposto do Selo) which is calculated as 0.8% of the purchase price.
  • Notary and Land Registry fees, totalling around €500.
  • Independent lawyer’s fees, which can be 1-3% of the purchase price, depending on the work involved and value of the property.
  • Bank processing fee, valuation fee and further notary and registration fees for the loan and stamp tax duty (if buying with a mortgage).
To buy property – as well as to open a bank account and to connect to utilities– in Portugal you will need a Portuguese Fiscal Number (Numero de Contribuinte), which can be obtained from the local tax office (Serviço de Finanças). Our independent lawyer should acquire this on your behalf.