Euro: The Euro has strengthened against the US Dollar in 2003, which makes it a less attractive currency to purchase property in when funds or income are USD related.

Economic climate: The Portuguese economy contracted in 2003 with lower domestic demand due to high unemployment. However, the forecasts for 2004 to 2006 are more optimistic. The Portuguese cost of living is becoming more expensive although general goods are cheaper than in other EU countries however some luxury and imported goods are relatively expensive.
Capital Gains Tax: If property is purchased through an offshore company then any change of ownership will not be acknowledged by the Portuguese authorities and any rate of capital gains tax applicable will be avoided. Otherwise Capital Gains will be a maximum of 24% on property bought since 1989.

Popular Areas: The Algarve, in the South is by far the most popular region with choices of purpose built complexes and luxury golf property which always have a wide appeal for holiday homes and rentals.

Price ranges: It is usually more expensive to buy property in coastal resorts and. However the range varies from small apartments starting at Euros 60,000 to luxury villas in excess of Euros 360,000.

Budgetary guide: Older inland properties usually in need of renovation: Euros 36,000 upward. Small apartments: Euros 60,000 upwards. 2 to 3 bedroom apartments: Euros 105,000 upward. Villas will generally cost from Euros 140,000. Golf complex property will be more expensive with luxury villas approaching Euros 360,000 and beyond

Overseas Investors: There are no Restrictions on Foreign Ownership. Although loans through a Portuguese Bank for non-Portuguese nationals for a second home can be difficult

Service Fees: The overall costs including Solicitor/Notary fees, Transfer Tax (SISA) equate to 15% of the purchase price. ´SISA´ tax (Portugal´s version of Stamp Duty) is 10%, however, the first €58,360 of the registered purchase price is exempt followed by a sliding scale up to €148,150, any value above that is charged at the full rate. SISA tax is payable prior to completion of the purchase. Often property is not registered at the buying price, which can reduce the SISA exposure. A certificate (Escritura) from the local Land Registry confirming that the property is available to sell is mandatory. A 10% deposit is required which is non-refundable in the event that the buyer fails to proceed.
Mortgages: If the purchase is to be made with a mortgage, securing the loan against a property owned elsewhere i.e. the UK may be quicker and easier, the legal fees should be lower and it could be less expensive to redeem. Portuguese banks will only lend to permanent residents and offshore banks will only usually finance 65% of the property maximum term is 20 years.

Information: Web access www.real-estate-european-union.com General property information site. ppa@lisbon.mail.fco.gov.uk British Embassy information site on property purchase www.min-nestrageiros.pt Portuguese Governments WebSite www.fxhistory.com Currency Exchange Site.



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