BUYING IN PORTUGAL
If you’re moving to Portugal, there are some great places to live in Portugal, all of which have their own unique character and attractions.
WHERE TO BUY
Porto and the North is a region where you find a cocktail of history, culture and nature in perfect concoction. People are attracted to live in this area because of its heritage, hospitality, gastronomy and of course the fabulous Port winef
The centre of Portugal offers both a wonderful coastline or, if you prefer, an entourage of historical villages and castles embedded among the land. Fine cuisine and traditional Portuguese customs are all preserved.
Further South you’ll encounter the Algarve which is on the top of most visitors’ lists. Expect plenty of sunshine, an array of beaches and plenty of entertainment to quench the thirst of the fussiest guest.
Lisbon is a cosmopolitan city and an extremely fashionable location to call home. From parks to golf courses, romantic towns and religious shrines – Lisbon is an excellent place of residence for the right buyer.
WHAT TO BUY
From the glittering waters of the Silver Coast to the quiet beaches of The Algarve, Portugal is a country with something for everyone. Whether you’re looking for a villa in The Algarve or an apartment in Lisbon, there is a great range or property in Portugal.
Despite being one of the oldest overseas property destinations, Portugal still has a huge amount to offer British buyers. The traditional Algarve is one of the best golfing regions in the world, while the Silver Coast north of Lisbon has managed to attract more buyers recently, while still keeping its character and some beautiful fishing villages intact. Further north is the Green Coast, with dramatic Atlantic coastlines and some of the best-value property in the whole of Portugal. The risk in buying Portuguese property is low but for medium to high long-term returns; and building and construction in Portugal is more regulated than some foreign markets giving investors greater peace of mind. Enthusiasm among Brits for Portuguese property has shown no sign of ebbing.
Buying vs Renting
If you would like to buy a house or apartment instead, estate agents and newspapers are the best ways to search. The price of a four-bedroom house in or surrounding Lisbon will vary between EUR 150,000 and EUR 600,000. A mortgage is available from a bank, whose conditions will vary according to the terms of the mortgage and the location of the property.
If you have chosen to rent a property, look out for the words; ‘alugam-se’ which mean for rent. Rents will vary according to location, quality and size. Rent usually does not cover utilities and most properties will not include furniture, other than wardrobes and kitchens. As a student in a main university city, you may find someone willing to rent a furnished room.
The minimum duration of a rental contact is six months. At the beginning, it is likely that you will be required to pay an additional month’s rent as a deposit. You will have to give at least a month’s notice before you leave.
Selling in Portugal
Once you decide that you want to sell your property in Portugal; the first thing that you will need to do is clear all your civic municipal dues and council taxes. If the owner defaults on the payments, the property may be auctioned off. If you live in an apartment; you may have to pay service charges and final maintenance fees. It is essential to pay all utility arrears before the sale.
LIVING IN PORTUGAL
There is a large network of private and international schools for expats to choose from in Portugal.
Private schools generally have smaller class sizes, a stronger system of extra-curricular activities, and more modern facilities. It is important to note that the teachers in these institutions are paid less than those in the public sector, thus they can be young and under-qualified in some cases. Public or state schools in Portugal are free, and expats are fully allowed to enrol their child in the local catchment school.
However, expats will quickly learn that these public institutions have been the subject of much debate. In the past, frequent teacher strikes and a much bemoaned Ministry of Education was enough to scare off any expat looking to enrol their child; not to mention, the country’s high drop-out rates and low literacy rates.
This serious criticism has led to Portugal’s government increasing investment to improve facilities, the quality of teaching and classroom sizes. Thus, although such concerns are now actively being addressed, expat parents should be wary of the state system.
Expats looking to spend an extended amount of time in Portugal or move there permanently might find that the country’s healthcare system poses a number of significant challenges. Both public and private healthcare options are available in Portugal. Private healthcare in Portugal is steadily gaining popularity among expats and becoming more readily available. The public healthcare system in Portugal continues to frustrate and disappoint locals and expats alike.
Expats moving to Portugal will find it reassuring that virtually every doctor is conversant in English. This is true of both public and private healthcare facilities in Portugal.
Whether other employees in the health sector, such as nurses and technicians, speak English will depend on the location of the facilities. Areas with a larger expat population, such as Lisbon and the Algarve, will naturally have more bilingual employees. Expats living in rural parts of Portugal should not rely on healthcare professionals to speak English and should ensure they can speak an adequate amount of Portuguese in order to communicate at the local hospital or clinic.
Unlike many other destinations, working in Portugal is hardly a hook for expats looking to move to this Mediterranean country. In fact, many relocate here to escape the faster business cultures of their own home countries. These include retirees, or professionals that sacrifice higher wages for a better quality of life.
Expats who do move for employment can find the transition difficult, as Portugal’s large bureaucracy can be slow to provide licences and certifications. Furthermore, unemployment is generally high and wages are well below the European average; leaving many locals to settle for some abbreviated version of self-employment.
Those who have been lucky enough to secure a job prior to relocation will find that the businesses usually take care of most of the groundwork. Expats planning on travelling the self-employed path, or those who move without a job opportunity, will have much more difficulty beginning a business, as well as navigating the waters of foreign affairs.
Much of Portuguese industry is manufacturing, which has a limited need or attraction for expat workers; however, burgeoning technology and alternative energy industries are beginning to take root in the country as well.
Portuguese culture has been greatly influenced by the dominance of the Catholic Church and the traditional Christian values. This influence is still reflected in modern Portuguese society. The Portuguese people are traditional and conservative. They don’t easily accept innovation and radical changes both in the community and the family. Life in Portugal revolves around the family and even in the 21st century, some traditions and ways of life remain unchanged, especially in rural areas.
Financing Your Property
There are various financial options available when considering an investment in Portuguese property. Below are some of the main strategies used by investors today.
Property purchase in Portugal could be funded by personal cash resources but, as most investors prefer, mortgage or equity release schemes are widely available.
As part of a modern finance system running in accordance with EU regulations, banks in Portugal offer a wide range of well developed banking services. We will gladly point you in the right direction of Portuguese financial institutions to fund your investment and we have access to mortgages from many Portuguese and offshore banks to suit your individual circumstances.
Foreigners can obtain mortgages from Portuguese banks to fund between 60 and 80% of the property price, with a minimum loan value set at 20,000 GBP. The amount of funding will vary according to your financial background and the bank involved. Both repayment and interest only mortgages are widely available with fixed and variable rate options.
Banks will not normally take into account rental income when calculating an applicant’s level of borrowing.
The Portuguese tax year follows the calendar year and ends on the December 31st.
The Portuguese tax system is one of the more generous in Europe and quickly becoming a popular destination for expats from the UK and other countries. For high-net worth individuals, the Portuguese tax system is particularly favourable and combined with other factors, including being one of the leading countries for R&D into new technologies, it’s appeal is growing.
If you are moving to Portugal you are required to register as a tax payer before you embark on any paid activity in Portugal. You need to complete a registration form called the “fiche de inscricao” and then submit it via your local tax office. Portuguese tax residents, including expats, are required to submit an annual income tax return early in the following year. The deadline for the Portuguese income tax annual return depends on the type of income you receive.
Cost of Living
The reasonable cost of living in Portugal has attracted expats from all over the world.
Though still not as tempting as its Iberian neighbour, the country is increasingly appealing to more Northern Europeans and Britons who have spied a fine opportunity to stretch their Euros and Pounds on Portugal’s sun-soaked shores. Not to mention, retirees and pensioners looking to invest in overseas housing have taken a particular liking to the market of affordable property in Portugal. As is the case in most destinations, in major cities such as Lisbon, Estoril and Cascais, the cost of living is much higher than in more rural communities; and depending on lifestyle choices, has nearly reached European averages.
For expats who can manage a modest way of life, a single person with a steady job earning a moderate salary will be able to attain a decent standard of living.