Portugese Paradise

According to recent research by MINTEL, Portugal ranks fourth on the wish lists of Britons keen to head abroad for a new life.  As a country, it’s awash with history, boasts beautiful beaches and stunning landscapes – no wonder it’s a popular destination.

Portugal lies on the west side of the Iberian Peninsula, surrounded by the Atlantic Ocean to the east and south, and bordered by Spain on the north and east. Although it’s one of Europe’s smallest countries, it’s also one of the oldest nations in Europe. It’s been independent since 1143 and established its continental frontiers back in 1297, and since 1986 Portugal has been a member of the European Union (EU).

The pleasant climate, affordable properties and laid-back attitude makes Portugal a favourite amongst foreign buyers. “Portugal offers a fantastic quality of life. The country is steeped in history and the landscape is full of olive groves, vineyards and beautiful beaches,” says Jack Hamilton, managing director of Parador Properties. “Portugal is a member of the EU, so buying a property is straightforward as long as you gain good financial and legal advice using an English-speaking Portugese solicitor,” he added.

What’s more, the travel links from the UK are superb, allowing easy access between the two countries. “The international airport in Lisbon provides quick and easy travel links to Portugal, and the cheap flight operators fly direct to Porto and Faro,” says Jack.

 Add to that the beneficial mortgage rates, and you’ve got an ideal combination. “The mortgage rate in Portugal is currently very low compared with the UK. Although obtaining a successful application can be somewhat timely and frustrating, once agreed the rate can be very beneficial for purchasers,” explained Steve Deboo, managing director of Algarve Team Properties.

Life in Portugal is said to be considerably more laidback than in the UK, so is perfect for those wanting a different pace of life. In fact, says Steve, “It will probably take you years to get used to the relaxed approach that the Portugese take with everything!” The cost of living is generally quite good, too. “The costs are similar to the UK if you stick to buying local produce and eat out occasionally,” advises Steve. “Although if you insist on still purchasing UK brands and eating out frequently, the overall cost of living could prove more than in the UK.”

 Pick of the properties

Like other countries, Portugal has a good range of property types available, from freshly built pads on new complexes, to traditional villas, modest apartments, and older townhouses. As a general rule, coastal resorts such as the Algarve on the southern coastline tend to be more expensive. However, it’s also a very popular area and tends to have lots of purpose built complexes, which do suit some people.

The capital, Lisbon, is a buzzing cosmopolitan city, with lots on offer, but it’s also only a short drive or train journey to the coast, where there are plenty of old fishing towns.

“A good price indication for a newly built two bedroom apartment, with two bathrooms and a communal pool in a popular town such as Albufeira, would be in the region of €230,000,” said Steve Deebo. “Older properties with similar specifications would be around €190,000. Of course, if you head on inland, a typical Casa with land could be as low as €220,000, but there is a lot to look out for when purchasing older properties.”

One company a four bedroom villa with rustic floors and an old fireplace, situated in the heart of Alentejo’s plains, 90 minutes away from Lisbon airport, on sale recently for €259,000. Elsewhere, a two bedroom townhouse in Portimao, with panoramic sea views, was on sale for €291,500 and a four bedroom villa in Quinta Da Ben Posta in Lagoa, close to a golf course, was available for €399,500.

For those wanting to completely splash out, a luxurious 18th century 13 bedroom manor house in Braga, northern Portugal, which was formerly the residence of the viscountess of Majorca, was for sale for €3,000,000.

What is important, emphasises Algarve Team Properties, is to have all your financial arrangements sorted out before you arrive in Portugal to purchase a property. Additionally, “It’s not a good idea to come out to Portugal in search of a property if you are dependent on selling a property first, as this will almost certainly end in disappointment,” they advise. “Buying in this way is very dangerous, especially if a promissory contract has been signed, as you are legally obliged to purchase the property on the agreed date and failure to do so will result in the loss of your deposit.”

 The buying process

When you’re searching for property in the country, Steve Deebo recommends that you deal with a government bonded and licensed real estate agent. “When a suitable property has been found, it’s often good to register with a Portugese lawyer. The lawyer can then act on the buyers behalf and make all necessary checks on the property, as well as start the processes required to purchase in Portugal,” advises Steve.

As with buying in any country, a number of checks need to be carried out and having a lawyer on hand makes the process easier. In particular, a survey will need to be arranged to check there are no serious structural problems. If minor problems are detected, you may be able to get a reduction on the price or ask the vendor to correct them before the sale goes through.

Some of the public departments that need to be consulted include the Land Registry (Conservatória do Registo Predial), to find out information about the property ownership, mortgages and any charges, the Finance Department (Repartição de Finanças) for details of the description of the property and information about tax and the City Council (Câmara Municipal) to obtain details of planning permission, rules, building licenses and the possibility of future constructions.

Thankfully, lawyers can take care of all this, leaving you with less to worry about. “Most lawyers will arrange a Fiscal Number (required by all buyers) and charge between 1-2% of the agreed purchase price. They can also arrange power of attorney very easily (something that can take a long time in the UK), which gives the lawyer full rights to sign on behalf of, and under instruction of, the purchaser,” explains Steve. “This helps as it allows the entire process to be carried out without the purchaser needing to be in Portugal. With correct legal representation and a good agent, the whole buying process can be very easy and painless.”

If you decide to purchase a property, a preliminary contract – called a promissory contract – is drawn up to cover the purchase of the property. In effect, this means that both parties are promising to enter into a final contract and buy or sell the property. When the time comes to complete the sale, a document called an escritura is drawn up and signed before a notary by you or a lawyer acting under power of attorney.

Many people find Portugal to be the haven they’ve been seeking. Today, it still remains particularly popular with Brits, who make up a large percentage of the foreigners who flock to live there. Maybe Portugal could be paradise for you?

Guide to Portugese buying lingo

Conservatória do Registo Predial – the land registry, where a search will be made.
Câmara Municipal – the City Council, where further searchers are carried out.
Repartição de Finanças – the Finance Department / Inland Revenue, where a search will be made of tax registration on the property.
Contrato de Promessa de Compra e Venda – a promissory contract drawn up between the purchaser and vendor.
Numero de Contribuinte – this is your tax number, which will be required for various transactions, including opening a Portugese bank account.
Mediador Autorizado – a government licensed real estate agent.
Advogados – lawyers.
Escritura – the final deed that secures the property in your name.

By Rachel Newcombe


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