The Algarve is an increasingly popular destination among expats, second homeowners, or Real Estate investors.
Credited as a safe destination, with low crime rates, a mild climate and tax benefits for retirees, Algarve is attracting more and more prospective owners from France, Belgium, Sweden, and Norway, adding to others from the United Kingdom, the Netherlands, Germany and ireland.
Although most Real Estate owners look on buying property in the Algarve, to live here permanently or as holiday homes, the recent tourism growth has created new investment opportunities.
The Purchase of Real Estate in Portugal involves several official and private entities during the several steps form choosing a property towards completion of the purchase.
It may start with a Real Estate Agency, helping to find the right property and mediating in the initial steps of the negotiation, which will be followed up by the parties’ lawyers, who will focus on the deal’s terms and conditions and conduct a legal due diligence to the property.
The purchase requires a formal contract in most situations drawn before a Notary and usually preceeded by a promise of purchase that establishes the basis of the deal.
Before the completion the buyer will pay a Real Estate Transfer tax, which is calculated through a sliding scale that goes up to 7,5% of the purchase price - for residential property - or a flat rate of 6,5% - for touristic property -, and the aditional payment of a stamp duty, calculated at a rate of 0,8%.
After the completion the new ownership is registered at the Land Registrar's database, which constitutes proof of ownership.