Algarve Property - how to buy yours
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Algarve property for sale, try here
instead, or -
If you want to read some current thoughts
about the Algarve Property market, see my Algarve
Property Latest news page,
otherwise, read on...
Once I'd convinced husband Nev that we should seriously consider buying an Algarve property as a holiday home, I knew I'd let myself in for a lot of homework and research.
For one thing, I've never undertaken any property dealings outside the UK, but it doesn't take a genius (and just as well!) to realise that things might not work exactly the same for buying
property in Portugal as they do back home.
After all, most countries have different histories and
practices, especially where property legislation is concerned.
However, undaunted, I dredged through dozens of shelves in Bournemouth's new Central Library looking for anything about buying Algarve property. I also surfed through zillions of
search results on the good ol' Internet. (OK, OK, that last bit's a slight exaggeration).
Anyway, the rest of this page is pretty much what I discovered...
... and I'm still discovering things about the best ways of buying Algarve property.
So, if you're someone who's trodden this same path before (buying property in Portugal, that is) do please let me know (via the
Your Algarve Best
any of what I've put down here is wrong, out-of-date, irritatingly naïve or whatever. I'm always grateful to learn from others' experience.
Meantime, what did my researches teach me about buying Algarve property? (Note that the information will apply to the rest of Portugal, too).
Algarve Property - and how to buy it
Well, the good news is that things are not that different from what I'm used to in the UK, except that a foreign language is involved.
That aside, let's face it; how many of us ever get involved in the actual mechanics of buying and selling houses in our home countries? Not many, I'll bet. We leave
it all to the 'professionals'.
So, does that mean that all you need is a wad of cash and access to some suitably calming pharmaceuticals, and everything will be OK, then?
Well, maybe, but I'm a cautious girl by nature, so I like at least to think I have a handle on what's going on in my life. And that includes such an important - and
potentially expensive - activity as acquiring real estate in Algarve - or anywhere else in Portugal, for that matter.
So, I've divided the process into 6 easy 'steps' and named them after dances. Nonsensical, perhaps, but it makes them seem less frightening and - I hope - offers simpler reading (my
1. Take Your Partners
The first move, you'll not be surprised to learn, is to find an Algarve property that you like enough to want to buy!
This is accomplished most efficiently by looking at lots of them (Algarve properties, that is). And, as in most places in the developed world, that means some time spent - unavoidably
- in the company of estate agents (realtors).
The first point of note is that estate agents in Portugal are licensed (unlike in the UK). So you need to check that you're dealing with an officially registered person or
company. Since there's a lot at stake, you may as well ensure that your side of the arrangement is following the rules. It may even be that you are afforded extra protection, but I've yet to confirm that.
Estate agent (realtor) commissions are paid by the seller of the property - just like in the UK - so that's one expense less for the buyer to worry about. Except that it'll be built
into the price, I suppose.
Which leads us to...
2. The Preliminaries Polka
Right... you've looked around and you have found your must-have Algarve property. The next thing is to find a legal representative (a lawyer, that is).
Since you're likely to be back at home during most of the purchase process, you'll need to be represented by a third party on the spot. Luckily, it seems
that it's quite normal for a lawyer to act in this way during Portuguese property deals...
You just need to register a Procuração Publica document with a Notary.
You also need to get a 'fiscal number' from the local Tax Office, or Finanças. This just registers you as an 'interested party', I believe.
Then there are the things that must be checked so that you don't get stuck with a 'dodgy' Algarve property. You know - one that has undergone works that ignored local building
regulations, or where there is any dispute about the structure or land involved...
And so, in order to ensure that your Algarve property (and its construction) match what is registered in the official records, searches need to be carried out at the local Town Hall.
The buyer (or buyer's representative) will also need to obtain and inspect some specific documentation.
If the property was constructed after 1951, there needs to be a Habitation Licence.
Then, a copy of the certified insertion of the property in the Land Conservatory records.
Finally, a Caderneta Urbana form that's obtained from the local Tax Office. (This is for the purchase of an urban property, obviously. For rural real estate,
the required form is a Caderneta Rustica. I have no idea - at the moment - how they differ, but let's just go with the flow.)
If you do wish to buy a rural property in Portugal, the best advice seems to be to check for any local 'interpretations' of the law at the Town Hall and the Tax Office. This is where
the lawyer should earn his 'corn' of course, but I'm cautious enough to double check - I hate nasty surprises!
3. The Contract Conga
If everything is hunky-dory at this point, the buyer and seller sign a contract that details the sale conditions - a Contrato de Promessa de Compra e Venda. This
is registered at a Notary Office and is binding on both parties.
Once notarized, it means that should the seller withdraw from the sale, an amount double the deposit is forfeited, while if the buyer withdraws, the full amount of the deposit goes
to the disappointed seller.
This is definitely tougher than the same process in the UK, but should mean that no 'gazumping' or other weaselly shennanigans can take place - and I'm happy enough with that.
Definitely, this is one area that I'd want to go over in depth with my lawyer before I signed anything.
Then, before the sale is completed, Algarve property is subject to a transfer tax. Unsurprisingly, this must be handed over at the local Tax Office.
(Not like the State to insist on getting its money up-front, is it?)
The amount of tax that's due varies according to the price of the Algarve property changing ownership, so it's not unlike the so-called Stamp Duty payable in the UK.
(* The legislation has changed over recent years regarding the calculation of the tax payable, but your lawyer should have the latest on this).
4. The Transfer Tango
To wind things up,
there's the little matter of the Escritura de Compra e Venda, which involves the signing, by the buyer and seller, of the paperwork that will transfer ownership of the Algarve
property. It is witnessed and recorded by a Notary and the balance of the purchase price is handed over.
The Notary Office provides a photocopy (no expense spared!) of the record of this act. This does not seem to be a terribly official piece of paper and is a far cry from the Title
Deed that would be handed over at an equivalent real estate transaction in the UK.
And that should be that: you're now the proud owner of your longed-for Algarve property. Except that you should also consider another two steps before the end of the
5. The 'Sold' Samba
With the correct bits of paper to prove that the sale has indeed been completed, the buyer should register details of the new ownership at the Land Registry, the Conservatoria do Registo
Strictly speaking, this does not need to be done until just before you wish to sell the property.
It's a sensible step to take immediately, however, since it provides you with instant protection from any subsequent financial misdeeds of the previous owner! (Yes, I also have
trouble understanding that one, but better safe than sorry).
6. The Celebratory Cakewalk
And that's it. Phew! You can relax with no further worries -- except property taxes, repair costs, war, famine, pestilence and global warming.
It's a wonderful thing, Algarve property ownership - don't you agree?
So... having researched, re-read and digested that lot, I organised our second 2005 Algarve trip to start some serious scouring for our first
Algarve real estate fling.
We found something pretty quickly, which was surprising, given the number of dreamy properties available.
That was back in September 2005, and we've been eagerly awaiting the finalisation of our first-ever purchase of Algarve property for most of
2006 and 2007!
It's fair to say that, no matter how much research you do, there'll always be something new to learn! I'm certainly 'older and wiser' than when this all began - but we're sure it'll have been worth it in the end.
I'll be updating this page to share all the "do's and don'ts" that I've learned once it's all over...
... and I'll be adding everything that I learn from my new friends in Algarve, so that it won't be limited to just my own experiences. In the meantime, if you want to track my progress, you can see how things have gone on the Algarve Property Purchase
And, if you'd like to learn more about what's on offer in
the way of Algarve
real estate, then look no further than the page to
which that last link will take you!
Feel Free... to contribute your own tips
If you own an Algarve property (or indeed some real estate anywhere in Portugal) and would like to contribute your experiences to give someone else a smoother ride with his, her or their Algarve property purchase, please do!
Send your acquired wisdom via the Your Algarve Best form and my gratitude will be put on the public record!
Alternatively, if you are still at the stage of dreaming about buying an Algarve property to use as a holiday home, please...
...subscribe to my free monthly newsletter, Algarve Beach Life News. Just click on the link below ("For Lovers of Algarve Beach Life") or on the button at top left ("Subscribe
to ABLN") -- I'll keep you updated, every month, about the new site information I have added about this wonderful region, including the ins and outs of buying an Algarve property.
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