Category Archives: Property

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All you need to know about the Golden Visa

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STEP 1 – THINGS TO DO BEFORE YOU COME TO PORTUGAL

  • Contact our consultants (info@cascaisvilla.net): provide your basic information, so we can send you an invitation for applying for a business trip schengen visa.
  • Contact the portuguese diplomatic mission that serves your region and, if applicable, obtain a valid schengen visa from the portuguese embassy or consulate in your country.
  • Obtain a copy of your criminal record from the authorities of the country in which you have most recently lived during at least one full year and have it certified by the portuguese consulate or by the apostils of the hague convention.
  • Documentary evidence of the eligibility of family member applicants other than the spouse and under 18-year old children will be required (if in doubt, please contact us about this).
  • If your documents are not in portuguese or english, obtain certified translations by a portuguese consulate-recognized translator of: (1) your passport; (2) your criminal record; (3) your health insurance policy, which must cover medical and hospital care in Portugal (you haven’t got this you may purchase it through your portuguese bank); and (4) your driving license or recent utility bill.

STEP 2 – VISIT TO PORTUGAL: PROPERTY SELECTION, LAWYERS, FISCAL REPRESENTATIVE, BANK ACCOUNT AND SEF

  • Meet with any of our consultants to find out more about the properties available in Portugal. We are currently marketing a range of properties :
    1. Residential properties: apartments and villas to live or lease
    2. Touristic apartments or villas (ideal for short-term rentals), in some cases with guaranteed return
    3. Buildings or palaces for renovation
    4. Commercial properties, including shops, and offices
    5. Hotels and resorts
    6. Wine and olive farms
  • Start your one-stop shop of real estate property. We will bring you to visit not only our properties, but also other properties from other real estate agencies.
  • Once you select a property, we will recommend you a trustable and full-experienced law company as well as a fiscal representative.
  • Lawyers will be responsible for golden visa application requirements and procedures, as well as for property due diligence, including confirming: the title of the property, if the person or company selling actually owns the property, whether there are any outstanding charges or costs associated with the property, if the appropriate building licenses or permissions are in order should you buy a plot of land or building for renovation, and that the terms and conditions stipulated by the vendor are fair and legal
  • Lawyers will be granted power of attorney to represent you and sign the promissory contract and definitive contract.
  • The fiscal representative will get you a portuguese tax number, required for the purchase, and manage your tax issues in Portugal on an ongoing basis
  • On the day of visit to the lawyers’ office, besides making the property reservation, appointing a fiscal representative, they will assist you on opening a bank account at a portuguese bank and schedule an interview at SEF (foreign exchange services) to give your biometric data and information.

STEP 3 – PROMISSORY CONTRACT, FINISH PAYMENT, DEED OF TRANSFER, AND PROPERTY REGISTRATION

  • To complete the purchase, your lawyer will need to prepare the promissory contract. This contract stipulates the details of the purchaser, vendor and property, payments, timings, etc, which have been agreed between the parties. You can either attend the signing in person or grant your lawyer power of attorney to attend and sign on your behalf the promissory contract.
  • Most of the time, investors will need some time to transfer all the money into their portuguese bank account to finish the payment. (warning: to apply for the golden visa, you must have the record of transferring more than 500k euros to your bank account).
  • After you have transferred the funds, the deed of transfer will be signed. The deed of transfer is signed in the presence of a notary who will ensure that the title deeds have been exchanged and all conditions have been understood by all parties concerned. Following the signing of the deed, the notary bears witnesses to payment, or an acknowledgment that the full payment has been made, and this fact is incorporated in the title deed.
  • Property registration: after signing the deed of transfer, your lawyer will take a notarized copy of it to the land registry for registration and payment of fees.
  • You are then an official owner of property in Portugal!

STEP 4 – GOLDEN VISA APPLICATION

After finishing the investment, the lawyer will be able to complete your golden visa application. Reminder: all documentation below needs to be delivered:

Documentation necessary:

  • Passport or travel document with a validity of at least three months.
  • Valid schengen visa
  • Proof of lawful entry in Portugal
  • Proof of health insurance
  • Request for consultation of criminal record at sef (to be declared at the time of the request)
  • Certificate evidencing that the applicant has not been found in default by any court of law (preventive)
  • Sworn affidavit by the foreign national, attesting that the same will comply with the minimum quantitative and time requirements regarding the investment activity in Portugal.
  • Declaration issued by the portuguese tax authorities and social security attesting the inexistence of any debts of the foreign national to the said entities.
  • Criminal record certificate of the country of origin and of the country where the applicant has resided for more than a year, duly recognized by the portuguese authorities (authentication by the portuguese consulate or apostille)
  • Proof of real estate property investment.
  • Documentary evidence of the eligibility of family member applicants other than the spouse and under 18-year old children will be required (if in doubt, please contact us about this).

STEP 5 – THINGS TO DO ONCE YOUR GOLDEN VISA IS APPROVED

  • Pay the visa issue fees.
  • Collect you resident permit card (the lawyers can be send them you to express mail).
  • Renew your golden visa on time. For renewal of the golden residence permit, applicants must keep their investment, and demonstrate that they have stayed in Portugal for at least 7 days in the first year, then 14 days in each subsequent period of 2 years. Therefore you should keep as proof: invoices, airplane tickets, and hotel stays. After year 5, you may apply for permanent residence.

DOCS

Provided by client:

  • Valid passport, schengen visa and travel document (all family)
  • Birth certificate (all family, apostilled and translated)
  • Marriage certificate (apostilled and translated).
  • Document that states that the children are dependent from fathers, if they’re over 18 years (apostilled and translated).
  • Absence of criminal conviction (criminal record) (all family, apostilled and translated).
  • Proof of address (e.g. utility bill, bank letter)
  • 2 passport-type picture (all family)

Law office takes care of:

  • Portuguese fiscal number
  • Proof of valid medical insurance valid in Portugal
  • Proof of legal entry and permanence in national territory
  • Declaration proving the absence of debts issued by the inland revenue and customs authority and by the social security
  • Updated property documents showing ownership of property, or
  • Signed promissory contract with payment of a deposit above € 500,000
  • Declaration from a bank in Portugal confirming the transfer of the funds
  • Absence of notice from the portuguese immigration authorities or schengen services
  • Declaration from the investor confirming compliance with the investment requirements for 5 years

Additional documentation necessary for family members:

  • For children over 18 years old, documentation proving they need their parents support
  • For elder family members, if they are not over 65, documentation proving they need their children’s support

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Portuguese companies seen as solid partners of internationalization

Despite current investor sentiment over what some consider to be peripheral European economies, such as Portugal, Portuguese corporates have attracted a significant interest from international investors, who value their strong focus on business and geographical risk diversification as a way to expand from the currently limited Portuguese internal consumption market.

Guincho Beach Cascais

A significant number of Portuguese companies in sectors such as utilities, renewable energies, oil and gas, construction and retail, among others, have been able to create growth strategies and equity stories sustained on the internationalisation of their activities, not only to booming Portuguese-speaking economies like Brazil, Angola and Mozambique, where historical and cultural affinities play a relevant role, but also to high-growth emerging markets in Latin America and Eastern Europe (e.g. Colombia, Peru and Poland).

Although more selective during uncertain times, investors, constantly looking for companies with attractive equity and value-creation prospects, are increasingly seeing investment in Portuguese companies as a preferred way to gain access to emerging markets with considerable growth potential, and also as a means to diversify their investment portfolios. International investors increasingly recognise the growth potential deriving from the exposure of Portuguese companies to high-growth emerging countries in Latin America and Africa.

Portugal is a solid and reliable country to leverage your investment. From investment in international companies to property investment; NOW is the time to step in at the Portuguese market. Property prices are over 40% down and have started to pickup thanks to foreign investment and the golden visa programme.

Marinha Guincho has a perfect geographic location. The estate has views of the atlantic ocean, is located in the middle of the  Cascais Sintra natural park and only a 10 minute drive from Cascais. It’s 30 minutes from lisbon airport and Lisbon.

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Portuguese properties popular with foreign investors

The Portuguese government introduced a Golden Visa for foreign investors. Buyers from China, Russia, the Middle East and elsewhere who spent at least 500,000 euros on property, get a permit that lets them travel freely within Europe’s 26-country Schengen zone without restriction.

The incentives, along with depressed housing prices, are showing the first signs of nibbling at the huge market glut of 3 million empty homes on the Iberian peninsula.

The Portuguese government said last week that 318 permits had been issued since the programme began a year ago, bringing in 200 million euros in investment – most of it in residential property in the last few months – and expected it to reach more than 300 million euros by December. That would exceed an estimated 250 million euros invested in all real estate in Portugal last year according to Cushman&Wakefield consultants.

There’s a growing interest in the golden visa programme, and a lot more of it materialising in actual deals. Last month Marinha Guincho sold a large residential property in Cascais to a private Chinese investor seeking the permit.

cascais

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Reasons to buy property in Portugal

Portugal has changed the laws for foreign nationals to stay in Portugal. Non-EU citizens can now obtain a Portuguese residence permit if they acquire real estate with a value of 500.000 Euros or more. The permits are known as Golden Visas.

  1. Like any other holder of a residence permit in Portugal, persons with a golden visa may travel around the Schengen Area.

  1. It has a population of 10.6 million with a population density of 115 inhabitants per sqm. Lisbon is the capital of Portugal and its largest city with around 480,000 inhabitants (2 million in Greater Lisbon).

  1. Portugal is an excellent place in which to live, invest and do business. Its skilled human resources, world-class infrastructure, business- friendly environment and easy access to markets are several factors which have contributed to a continuous flow of new investments into industry, tourism, commerce and services.

  2. Portugal is a democracy and is politically stable. Its sovereign bodies are the President of the Republic, Assembly of the Republic, Government and the Courts. The current President of the Republic, elected for a 5 year term, is Aníbal Cavaco Silva.

  1. Portugal has been a member of the European Union since 1986 and was a founding member of NATO in 1949. It has been a member of the United Nations since 1955.

  1. TripAdvisor has ranked Lisbon as one of the world’s top cities with best value for money. The 2012 Cities Survey, which looked at how locals and travellers view 40 key cities around the world, also ranked Lisbon as the friendliest city in Europe

  1. Rental yield on average still remains one of the highest in Europe.

  1. 2012 Natwest Bank Quality of Life Index ranks Portugal 2nd in Europe (after France).

  1. The combination of hot summers cooled by the Atlantic breezes and warm winter days make the climate unbeatable.

  2. The property market in Portugal is highly developed. It has a high relative quality of supply in all sectors, on a par with the larger core European markets, dynamic demand and a considerable presence of foreign occupiers. The market is highly transparent, with various international consultants providing information on all commercial property sectors. There is also a strong international contingent of developers and investors and many of the main European investment houses have assets in the country.

  3. Tourism is, undoubtedly one of Portugal’s main sectors of economic activity and is unanimously considered to be a strategic, priority area. It makes a significant contribution in securing external revenue, to cover the external trade deficit and in generating employment.

  4. Investing in property overseas will allow you to benefit from property prices that have reached an all time low due to the recent economic crisis in Europe. Property prices in Portugal (and the rest of Europe) have dropped up to 40%, and the real estate market in Portugal has only recently seen a slight recovery.

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Advice for buying property in Portugal

Migrating to for instance Cascais in Portugal is a dream for many. Portugal has a comfortable climate, the living costs are lower than in other European countries and it has a great vibe/culture. Moving to Portugal is very simple but it is important to prepare yourself well and ideally to have some contacts in place that can advise you. Over the following pages we try to cover all the important basics you should take into account. Also, A fair bit of helpful information can be found on the website of the Portuguese immigration office: Serviço de Estrangeiros e Fronteiras.

Buying a villa in Portugal

What you can expect from buying a house in Portugal depends mainly on the region and location. Do you prefer a house in the city or in the countryside. Should it be more inland or right at the coast?

Villas at the coast

The most expensive area’s for buying a villa or apartment are the coastal towns. Buying a house in a popular region for foreigners such as the algarve is significantly more expensive. This is due to the amount of foreigners that have moved here over the last decades. The Cascais region is certainly not a cheap region either. In this region the prices are based on a combination of factors such as distance to Lisbon. The region is very popular with both locals and foreigners.

Houses in Portuguese cities

The main portuguese cities such as Lisbon, Faro and Porto mainly consist of apartments. The houses you find in these cities are usually located in the suburbs or are small and expensive.
Apartments are available in all price categories and is mainly influenced by the location of the property. A large number of apartments have a balcony or roof terrace.

Villa’s in the countryside

The cheapest houses can be found in the Portuguese countryside. There are plenty large houses for sale for a reasonable price. These houses are usually located far from the main cities and coast.

Real estate agents in Portugal

The sale of houses are mainly done through real-estate agents in Portugal. Like in every country there are good and bad agents and a bad experience can also happen to a local. It is important to deal with an agent with whom you connect well. There is a significant difference between the efficiency of agencies. If an agents does not show significant interest it is recommended to look for another one.

There are various ways to find a decent real-estate agent in Portugal. Often people find an agent through an agent in their own country that is affiliated to an agency in Portugal. Also many Portuguese real estate agencies advertise in your country. Most of these are specialized in the more popular regions and have employees that speak English and other languages. We at Cascais Villa can help you with finding the right agent and/or property. Even Though we are specialized in the Cascais region, we have good contacts throughout Portugal.

Important: If you make use of a foreign agent, confirm and reconfirm the price and verify whether the property is still for sale before traveling to Portugal for a viewing.

Qualifications of Portuguese real estate agents

Portuguese real estate agents are monitored by the government. They must possess a licence called “mediador autorizado”. The agent must have proof of this licence. Usually this licence will be prominently displayed. If you do not see it, ask to make sure the real estate agent has it. It’s recommended to choose an agent connected to one of the recognized associations such as:
de Associação de Mediadores Imobiliários (AMI), Sociedade de Mediação Imobiliária of de Associação dos Mediadores do Algarve (AMA).

Fees for the real estate agency

The incurring fees for the selling real estate agents are usually between 5% and 10% but are included in the sales price. Meaning the costs are paid by the party selling the property.

Protection of the agency fees

Portuguese real estate agents can ask you to sign a document before showing you the property. This is to secure his commission in case you want to buy the property and so you will not go for the same property through another agent.

It is custom to schedule a viewing in advance. It is in most cases not possible to arrange a viewing ad hoc.
Viewing at the cost of a real estate agent

Many agents organize viewing trips for foreigners with a reduced rate for the accommodation during the trip. Once you decided to buy the property they usually reimburse the costs of the trip. Make sure you do not base your decision on this principle and the costs incurred to the agent for organizing. In the end the decision should be the right one for you.

Buying a house in Portugal

Buying a house consists of three phases. The process starts with the orientation, followed by the subrogation and is completed with the negotiation.

Orientation

When you start looking for real estate agents, it’s important to clearly indicate for what you are looking. The following points address some key questions:
– Do you want to live in the house parttime or fulltime?
– Would like to rent it out?
– In what region should the house be located
– What kind of property are you looking for: villa, appartment, nr of rooms etc.
– What is your budget

Once this is clear, you run through all property that matches your criteria and turn it into a short-list for viewings.

Subrogation

It is important to understand a Portuguese law called subrogation, meaning that debts such as mortgage, taxes and shared expenses are included in the property. So when buying a house these debts are included. To prevent this from happening to you, you will need an experienced lawyer.

When buying a house in portugal, it’s recommended to have a real estate agent that is registered with the Portuguese law as ‘mediador autorizado’. Also hire a descent property lawyer in your own country who can do the necessary checks.

To ensure there are no debts linked to the property you need to acquire a certidão de registro from the local registry. It is important to register the certificate (escritura) shortly after signing the deal because it is possible that between purchase and completion debts are transferred to the property.

Negotiation

The negotiation phase starts with an offer from the buyer. The seller will come with a counter offer or accepts your offer directly. Once both parties have come to an agreement, talks can be started about extra costs for the movable goods. When buying the property you are ought to request a fiscal number and to sign a temporary contract. Next, a down payment must be made and an independent lawyer will be involved to complete the sale.
Once the balance payment has been made, the official contract of purchase can be signed with the solicitor, who will provide the registration in the land register.

Pitfalls of buying a property

There are various potential pitfalls when buying a house in Portugal. Unfortunately there are plenty of stories about people and bodies who profited of ignorant foreign investors. The most important advice is to hire an independent lawyer who speaks both your language and Portuguese fluently and who is familiar with the Portuguese laws and affairs.

Situations you want to avoid when buying a house in Portugal:
– Buying a house without constitutional rights
– Buying an illegally built house
– Outstanding mortgages
– Properties sold with overdue utility bills
– Buying a property that is being sold to multiple buyers at the same time
Letting your property

There are two ways for letting your villa. You can either do it yourself or hire an agent.

The agent is a person or company who lets your property. They will ensure that tenants receive the keys upon arrival and arrange the cleaning afterwards. Often extra services are offered such as maintenance and repairs. On average an agency charges 25% of the rental rate.

It is recommended to ask various agencies, located close to the property, for a tender. Once you have found a potential agency, try to find some references. Also check whether they handle the reservations for you, their forecasted occupancy rate and how payments are structured.

It is also possible to work with a tour operator who lists your property in their registry. Tour Operators generally ask for a higher percentage but they are more likely to achieve a high occupancy rate.

Property tax (fixed assets) in Portugal

People who own fixed assets in Portugal must pay an annual property tax called contribuição autárquica/CA. If you rent out the property you are allowed to pass on the costs. The level of property tax depends on the value of the fixed asset. This is called “valor tributavel” and is based on the tax register. In these calculations, market value, location and some other factors are taking into account. You will receive this statement annually and most be paid in halves.

There are three levels of property tax.
Municipal: ~1% – highest rate
Rural: ~0.8% – lowest rate
Medial

Advice for viewings

Good preparation is key for an effective viewing trip. Below you can find a checklist of points to take into account when going for a viewing in Portugal.
– Create an agenda with daily viewings, do not plan more than 3 per day.
– Rent a car in advance to easily travel to each property.
– Make a list of phone numbers of contacts that may come in hand.
– Note down the addresses of each property you are going to visit.
– Have a clear overview of the requirements a property should meet.

When you are on your way to the property take a good look at the neighbourhood. Ideally the agent could share some information about the area. Often the agent also wants to show you other properties. If he is pushing to much for a certain property be aware that this may be because he can earn more on that specific deal. Once arrived at the property let your common sense be in charge.

In case you would like to make an offer immediately bring the following with you:
– Passport / ID
– Tax assessment of the past year
– Money for a potential deposit (€3000 – € 6000)
– Payslips
– Overview of financial liabilities

Overview of costs that occur when buying a villa in Portugal

There are many additional costs when you buy a house. Here we sum the most important costs you should take into account. Firstly, you need to know the fiscal value of the property, because most of the additional costs are based on this number. The fiscal value is usually lower than the market value of the property:
– Stamp duty
– Value added tax for new properties
– Solicitor fees
– Legal fees
– Land registration certificate
– Surveyor costs
– Real Estate agency fees
– Mortgage costs

Most of the taxes are paid by the buyer and can in some case already be included in the sales price. It is important to know which costs are included and which ones not.

Stamp duty (IMT)

When you buy a property in Portugal, a stamp duty must be paid. The stamp duty is paid to the municipality.and is called IMT. IMT is calculated over the total price of purchase, which is stated in the sales contract. The IMT must be paid before signing the land registration certificate. In portugal one is exempted from IMT up to € 92.407. There are fixed tables for IMT up to € 574.323. Above € 574.323, the IMT has a flat rate of 6.0%, plots in cities without remains of ruins 6.5% and rustic property 5.0%.

Basic tax (VAT in Portuguese IVA)

When buying newly built property in Portugal, one must pay a tax rate (IVA) of 19%. This percentage must be included in the advert price and agreed sales price. Meaning the price you see is the price you get.

Solicitor fees

The compensation paid for the solicitor is set by law. This fee used to depend on the price of sales. A new legislation introduced a system where one pays approximately €153 per transaction, plus €1.25 for each amendment or additional clause.

Legal Fees

The legal fees for buying a property in Portugal are generally between 1% – 2 % of the purchase price. The exact amount is dependent on the amount of work needed when buying the property. Usually the minimum charged legal fee is €1000,-

Land registration certificate

The occurring costs for the land registration certificate are generally between 0.75% – 1% of the property value. This fee is paid to the solicitor in the final settlement.

Real estate agency fees

The compensation paid to an agent for buying a property is generally 5% – 10%. This is dependent on the price of the sale and type of contract. The buyer agrees with the agent on a fee in advance and is included in the sales price.

Mortgage fees

The fees from the mortgage are generally around 1% of the borrowed amount of money for buying the villa/house/apartment.

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