The global crisis of 2008-2009 has touched the real estate market of Portugal. Until after 2014, square meters continued to fall in price. But since then, recovery of the market has begun and it continues so far. At the end of the first quarter of 2020, real estate in Portugal has risen in price by 16.3% on year to year basis.
In the capital and in the popular resorts of Portugal, real estate in the price range of € 50-200 thousand is considered to be inexpensive.
For €200,000-300,000 you can count to purchase apartments in the sleeping areas of Lisbon, but not in new developments. New housing in the capital is available with a budget of €300,000-350,000 - one-bedroom apartments, €350,000-400,000 - with two bedrooms.
Properties in the capital with good location and roomage starting from 100 sq. m cost at least € 500,000.
Let's calculate the cost of buying and maintaining housing in Portugal using the example of spacious apartments in the Albufeira outskirts with a swimming pool and ocean view.
Area - 126 sq.m
Plot area -106 sq.m
Bedrooms - 3
Bathrooms - 3
Year Built - 2009
Type - secondary market
The apartments are located in a two-storey townhouse away from the Praia dos Arrifes beach. The journey by car takes no more than ten minutes.
The apartment was built in 2009, it is fully furnished and is located in a building with a closed territory. There are three bedrooms, an equipped kitchen, a hall with access to a terrace with a barbecue - all this is at the disposal of the new owner. There is a solarium on the roof of the building and another terrace and garden surround the apartment.
Purchasing procedure happens in three stages:
All payments go through a Portuguese bank account, which can also be opened by non-residents. In order to open and maintain an account, it is necessary to keep a minimum deposit (from €150) on the balance.
When purchasing with a mortgage, it is important to keep in mind that there is a mortgage tax, which depends on the amount of financing and the conditions of a particular bank.
Real estate agencies help with all issues, but you can hire your own lawyer. In Portugal, legal support of the transaction is paid at a rate of 1% of the value of the property (sometimes more expensive).
The Portuguese notary will request from € 250 to € 1500 for his services. Often an agency or a lawyer of one of the parties proposes a candidate for a specialist.
The cost of supporting the transaction by a notary depends on the price of the object (usually the fee is about 1% of the transaction amount plus VAT). In our case, the buyer will pay around € 480.
In Portugal, the realtor is not paid by the buyer, but by the seller. Usually the agent receives 5% of the property value for each transaction.
To perform any legally significant activity in Portugal, including purchasing real estate, you will need a taxpayer identification number (Numero de identificação Fiscal, NIF). The local TIN can be obtained in 1 day by contacting the tax office (Finanças). A small fee is charged for its manufacture - less than €10.
But in order to issue a local TIN for a non-resident (foreigner not from the EU), it is necessary to involve a fiscal agent - a guarantor to the Portuguese tax authorities. This service usually costs from €150 euros per year.
The tax rate on the transfer of ownership depends on the value of the object, its location and purpose of use (you can find out the amount of payment in the table).
For example, the tax rate for residential accommodation intended solely for permanent residence of the owner ranges from 0 to 8% (depending on value). If the property is purchased for less than € 92,407, then the property is not taxed. The payment is made when signing the sales contract.
Stamp duty (Imposto do Selo, IS) for purchasing real estate is fixed and is 0.8% of the transaction amount. It is also paid in other situations: inheritance, execution of a long-term lease agreement, winning the lottery, etc.
Property registration costs starting from €225 euros. If you need urgent registration in the Register, you will have to pay €450 per one object.
During the meeting with the notary, the client pays the tax bills and signs the sales contract. The notary only has to record the transaction into the Register.
Once the new owner has submitted the sales contract to the utility providers, all contracts are reissued to the owner’s name.
The cost of utilities depends on how many months the owners spend in the new apartment. Let's make a calculation for a situation where a family of two lives in a new Portuguese apartment all year round.
The owner of an apartment in Portugal is obliged to pay an annual municipal property tax (IMI - Imposto municipal sobre os imoveis). The rate is progressive, ranging from 0.3% to 0.8% of the cadastral value of the property. It is usually paid at the tax office at the place of residence or online.
In our case, the cadastral value of the apartments is €220,000, and the rate is 0.3%. In total, the owner will pay €660 per year (€220,000 * 0.0003).
This includes: maintenance of the complex, garden, swimming pool, cleaning of stairwells. The payment, as a rule, goes through the bank to the account of the managing company. The annual fee is usually split into parts and is paid four times a year, which makes each payment about € 510, and it will be € 170 per month.
It is drawn up at the request of the owner. An insurance certificate in Portugal will cost at least € 150 per year.
On average, utility bills cost € 180-200 per month. In our case, the amount consists not only of electricity, water and gas, but also includes a landline phone and the Internet.
Electricity: от €50
Water supply: от €25
Gas: от €50
Phone: от €25
Internet: от €30
You have three ways to pay your bills:
|Real estate purchase tax||€21,640*|
|Registration of real estate in the Register||€225|
|Connection of communications||€0|
|* – depends on the price of the property|
|** – for continuous residence 365 days a year|
The article was prepared jointly with the company PORTUGALITY.
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