Calculation: How Much Does It Cost to Purchase and Maintain an Oceanfront Apartment in Portugal

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During the crisis year 2020 housing prices in the land of great sailors continued to rise. But this is not the only reason why Portugal is in the spotlight: here, in Portugal, is one of the simplest programs in Europe for obtaining a residence permit, and subsequently obtaining citizenship - for the reason of purchasing real estate. Olga Gorskikh, the Managing Partner of Portugality, told us how much it costs to buy and maintain a Portuguese apartment with an ocean view.

What to Buy in Portugal

Market and Prices

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.

Also read: Portugal and Real Estate Prices: an Undervalued Market

Secondary Market Oceanfront Apartment

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.

How Much Will You Pay at the Purchase Stage

Price of the apartment : €420 000

Purchasing procedure happens in three stages:

  • А €5,000 deposit is made when agreeing the cost of the property.
  • Another 10-25% deposit is made цhen signing the letter of  intent (within 15 days after agreeing on the cost).
  • The remaining amount is paid upon completion of the purchase and sale transaction.

 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.

Olga Gorskikh, the Managing Partner of Portugality:

“When buying a home in Portugal, bargaining is appropriate. Often the size of the discount depends only on how quickly the owner wants to sell the property. Usually, you can claim to reduce the transaction amount by 5-10%”.

Lawyer's fee: €4,200

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).

Notary services: about €480

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.

Olga Gorskikh, the Managing Partner of Portugality:

It is important to know that you need to book an appointment with a notary beforehand, at least one day in advance. The process looks like this: When Tte date of the transaction is set, the agency sends the documents of the parties of the transaction and the object to the notary. After verification, the notary issues invoices to pay taxes.

Translation services: €0

Olga Gorskikh, the Managing Partner of Portugality:

If the buyer does not speak Portuguese, then an Interpreter is required. Our agency provides this service for free. The help of an interpreter will cost about € 50 per hour.

Realtor's Fee: €0

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.

Fiscal Agen’s Fee: €0

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.

Property transfer tax: €21,640

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: €3,360

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.

Olga Gorskikh, the Managing Partner of Portugality:

Here are no fines or time limits for buyers, since a deal cannot be concluded without paying mandatory taxes.

Recording  the real estate in the Register: €225

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.

Utility Connection : €0

Once the new owner has submitted the sales contract to the utility providers, all contracts are reissued to the owner’s name. 

Olga Gorskikh, Portugality:

All documents are signed free of charge, but in some regions a connection fee may be charged - € 20-150. This issue is independently resolved by the buyer or by proxy.

Check out residential real estate in Portugal:

How Expensive is It to Maintain an Apartment in Portugal

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.


Property tax: € 660 per year

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).

Condominium Fee: € 2,040 per year

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. 

Insurance: €150 per year

It is drawn up at the request of the owner. An insurance certificate in Portugal will cost at least € 150 per year.

Utility bills: € 2,160 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.

Itemized expenses

Electricity: от €50
Water supply: от €25
Gas: от €50
Phone: от €25
Internet: от €30

You have three ways to pay your bills:

  1. via a bank deposit (you need to enable automatic debiting of funds from the account);
  2. after receiving a receipt;
  3. via online banking.

Table of Costs for the Purchasing and Caintenance of an Apartment in Portugal

Purchase costs
Apartment price €449,905
Realtor's fee  €0
Realtor's fee  €4,200
Real estate purchase tax  €21,640*
Stamp duty  €3,360
Notary services  €480*
Translation services  €0
Registration of real estate in the Register  €225
Connection of communications €0
Furnishing  €0
TOTAL:  €449,905
* – depends on the price of the property 
Maintenance costs
Property tax  €660
Condominium fee  €2,040
Insurance  €150
Community fees €2,160**
TOTAL: €5,010
** – for continuous residence 365 days a year

The article was prepared jointly with the company PORTUGALITY.
Photo: pixabay.com

Quoting conditions of Prian materials

Tags: Portugal, New buildings and construction, Buying procedure, Property Maintenance, Real Estate, Taxes and fees

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