Country Guide: Portugal
Why buy property in Portugal?
While property investments were traditionally confined mostly to the Algarve, in recent years investors have taken an interest in other, cheaper regions. In addition, Portugal is just a short flight from the UK and English is widely spoken in the more touristy areas. The Mediterranean cuisine, culture, outdoors lifestyle and climate also help to make Portugal an attractive place to relocate or establish as a regular holiday retreat.
What's Portugal's property market like?
Revisions made to planning regulations in 1993 mean that buyers are likely to receive some protection from oversupply and falling house prices over the long term. The recession did not hit Portugal's property market as badly as it did other European countries and if you are willing to renovate, it is still possible to find properties at bargain prices.
However, it is worth bearing in mind that Portugal does have some financial worries. A large budget deficit and flight of capital are two significant problems that have made for an uncertain economic climate. These issues could impact on buyers who cannot afford to purchase their new home outright, with the OECD (Organisation for Economic Cooperation and Development) urging the government to "swiftly" up taxes on sales and property, to avoid a wider economic collapse in the country.
Popular areas in Portugal in which to invest
For years, the Algarve was the first port of call for Brits heading to Portugal and is still massively popular – a fact that is reflected in the region's property prices. Strong demand for property is due to year-round good weather and strict planning regulations, which has helped to prevent the area becoming as built-up as some of the popular resorts on Spanish coasts, for example. A range of budgets are also accommodated for, as small towns in the east and the districts around Lagos in the west remain relatively inexpensive.
The Silver Coast was unspoiled and prices were low until a few years ago, when property investors turned their attention to the area. However, as its popularity as a resort has grown, property prices have risen. The region's architecture and historical sites are famous across the country and visitors flock to see them, although the beaches and traditional fishing villages remain quiet. Inland run winding rivers accompanied by picturesque greenery.
Costa Verde is, as you would imagine, a region of rolling green countryside and agriculture due to year-round rainfall. The National Park of Peneda-Geres, which features dramatic scenery, is situated here. One attraction for buyers is that property tends to be quite cheap compared to the rest of Portugal.
The property-buying process in Portugal
After the original verbal agreement, the buyer's lawyer checks all the necessary legal documents. The local tax office then assigns a fiscal number and the buyer and vendor agree on the terms and conditions, after which a ten per cent deposit is paid. Once the provisional contracts have been agreed upon, both parties sign the final contract overseen by a notary.
The purchase price is then paid. The notary records the transaction with the Land Registry and files the details with the tax office.
