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The Algarve, Portugal
Miles and miles of golden sand
Basking in sunshine at the southernmost tip of Portugal, the Algarve has become one of the most sought after locations for those wanting a home … or holiday home … where there is a guarantee of a less hurried yet fairly sophisticated way of life.
Derived from the Arabic ‘Al Garb’ … ‘the west’ or the ‘setting sun’, depending on which translation you wish to believe, the Algarve has developed a character that is totally different from the other parts of the country.
With the rolling Atlantic to the south and west, the Guadiana river to the east and the Caldeirao and misty blue Monchique mountains to the north, you are assured of some magnificent scenery wherever you look in the Algarve.
Luxury apartments and houses on some of the finest developments in the Algarve, elegant quintas and country villas both near the coast and amid some wonderful countryside … the variety of property on offer in the Algarve has never been so exciting nor so varied.
Swimming, scuba diving, water skiing, sailing, deep sea fishing, surfing … just some of the water sports to be found in the Algarve, this marvellous stretch of coastline with its miles and miles of golden sand, clear waters and rugged cliffs. That’s to say nothing of the leisure activities available on land, such as golf, tennis, squash, bowls and horse riding … to name but a few. Add to that world class restaurants serving typical Algarvian and international cuisine … and the cheerful disposition of the Portuguese people … and you can begin to understand our enthusiasm for this beautiful part of the world.
Faro, reasonably centrally located in the Algarve, is the site of the international airport with several flights coming in and going out daily. By road, you can take the main EN125 road spanning the length of the coast, partially dual carriageway but still a single lane from Lagoa going west. A single-track railway runs from Lagos to Vila Real do Santo António with links to Lisbon and the north.
All in all, a property in the Algarve with its mild climate (the temperature rarely going below 16 degrees centigrade even in winter) makes an ideal investment … the potential for all year round rental (particularly on the golfing developments) being one of the Algarve's greatest assets and the rising property prices another. Consider that with some of the lowest mortgage rates on the market for a very long time and it really does make sense to act now.
Holiday homes for sale in Portugal
Buying a property in the Algarve? Your questions answered:
Q. Who sets the price of the property in the Algarve?
Q. What additional costs are there to living in the Algarve?
Q. Do I need permission to purchase a holiday property in the Algarve?
Q. Do I have to be in the Algarve to complete the transaction?
Q. Can I take money in and out of the Algarve freely?
Q. In whose name should I purchase the holiday property in Algarve?
Q. Should I make a Will for my holiday property in the Algarve?
Q. What are the legal steps required to purchase a holiday property in the Algarve Portugal?
Q. Is there Inheritance Tax in Portugal?
Q. Who sets the price of the property?
A. If you are purchasing a holiday property on a new development in the Algarve, it will have been set by the developers/management company. Regardless of agent's commissions, you should still pay the same price whoever you purchase through ... whether you go direct or through a third party. Resale properties in the Algarve are handled much the same way as in the UK ... with a valuation taking place and the agent's fees agreed before the property is marketed. Going through a company like Headlands in association with the Holiday Home Company has several advantages: You will get to see a wide range of properties that suit your requirements; You will have the benefit of our many years experience, as well as fully staffed offices to support you in the UK and the Algarv. It will eliminate any possible language problems and it helps takes away the stress and strain associated with purchasing a holiday home in the Algarve.
Q. What additional costs are there?
A. You may be looking into your budget to purchase a property in the Algarve. You should be aware of the following costs (estimated)Notarial and registration fees - 1.5% of the purchase price
Sisa - up to 6.5% (depending on the type of property and price)
Lawyer's, surveyor's and real estate agent's fees are usually subject to agreement. Fees are subject to VAT (at present 19%).
Q. Do I need permission to purchase a property in the Algarvel?
A. Generally, no. Where necessary, a lawyer can apply for the permission for you.
Q. Do I have to be in the Algarve to complete the transaction?
A. In the event that you will not be able to attend the signature of the promissory contract and the "escritura", your lawyer will provide you with a power of attorney and advise you of the necessary formalities for this document to be prepared abroad and accepted in Portugal.
Q. Can I take money in and out of the Algarve freely?
A. Yes.
Q. In whose name should I purchase the holiday property?
A. There are a number of ways to purchase the property in the Algarve: o In your own name o In the joint names of you and your wife or co-purchaser(s) o In the names of your adult children or in the name of somebody who will eventually inherit the property from you o In the name of a UK limited company.
Q. Should I make a Will for my property in Portugal?
A. It is strongly recommended that once you have purchased a property in the Algarve Portugal in your own name, you instruct your lawyer to prepare a Will. You are allowed to have a Will for your Portuguese assets only, without replacing the main Will you may have in your own country. The most common type of Wills are also signed at the Portuguese Notary's books and are strictly private and confidential. With the right people assisting you, purchasing an overseas property can be an enjoyable and rewarding experience ... one, we at Headlands with our 30+ years experience are familiar with. If you still have questions having read this section, please don't hesitate to contact us!.
Q. What are the legal steps required to purchase a holiday property in the Algarve?
A Step1 - Surveying the property A survey on the property is strongly recommended. A Surveyor will inspect the property and prepare a report, eventually showing any defects, which would not be visible to everyone's eyes. It will save you unpleasant surprises at a later stage, and depending on the type of defects stated, if any, you may get a reduction on the price, or you may be in a position to request the vendor to repair them, or insist for additional guarantees to be inserted in the contracts.
Step 2 - Property searches We would call this phase the essence of buying a property in the Algarve. In order to make sure that the property you are willing to buy has a good clean title searches must be carried on, at least, in the following public departments : Conservatória do Registo Predial - Land Registry Department. This is a department where you will find information about property, i.e. ownership, description, mortgages, encumbrances and charges. Repartição de Finanças - Finance Department. You will also find in this department information about properties - their description and taxes, namely predial tax "contribuição autárquica". Câmara Municipal - City Council. In this department you will find information about planning permission, possibility of construction in country areas, rules applicable to certain developments, approval of projects, building licences and habitation licences.
Step 3 - Promissory contract In order to secure the deal, it is advisable and usual in Portugal to sign a promissory contract "contrato promessa de compra e venda", whereby all conditions for the sale agreed with the vendor will be stated including completion date. A deposit is payable at the signature of the said contract and its amount subject to agreement between the parties.At this stage you will need to decide whether you purchase the property in your name or you follow a different route. Nowadays with the changes in the law affecting offshore ownership companies this is no longer a route often chosen. A tax efficient way to purchase properties must be looked into case by case.
Step 4 - Notarial deed of purchase and sale Completion is known in Portugal as "escritura pública de compra e venda" whereby the ownership of the property is transferred to you. All the property documents must be submitted to the notary, together with the proof of payment of tax on the transfer of the property known as Municipal Transfer Tax (MTT) whenever applicable. This "escritura" is signed at a Notary's book on the date you have agreed to close the deal. At this same time the balance of the purchase price is paid to the vendor.
Step 5 - Registration Even though you have become the owner of the property when you signed the "escritura", it is the registration of the property in your name, at the Land Registry Department, which grants you full security of ownership, as it will produce effects against third parties.
Step 6 - Will It is highly recommended that once you have purchased a property in Portugal, in your own name, you have a Will for your Portuguese assets only. We hope that the above summary will help you through the procedures of buying your home in the Algarve Portugal. And now, just enjoy it!
Q. Is there Inheritance Tax in Portugal?
A. Inheritance Tax in respect of property has been abolished for persons with Portuguese residency - those with tax residency elsewhere will be liable (or not) under that jurisdiction.
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Want to get more property for your money? If you are buying a holiday property in the Algarve Portugal, then you will need to pay for it in foreign currency. To ensure that you get the best possible foreign exchange rate, allow us to arrange a no obligation currency quotation We have access to an easy to use foreign exchange service and their guarantee is that they will not be beaten on the rates they quote. If the rate is obtainable within the market they will ensure they get it for you, making your property purchase less expensive. |
Holiday property for sale in The Algarve