Buying a Property in Portugal
(Chris Garveigh)

Finding Your Ideal Property
The first step is to find a Government licensed real estate agent ('mediador'), whose conduct is subject to enforceable rules. Note should be taken that buying through an unlicensed person could result in all parties being heavily fined. Always use a reputable lawyer, preferably recommended, to whom you can entrust your power of attorney. Once you have agreed a price on your chosen property, have it surveyed. There are several Chartered Surveyors in the Algarve who are familiar with all building styles and regulations.

Offshore or Not?
After consultation with you accountant, decide whether you should purchase your property through an offshore company. This has several benefits, such as avoiding the high levels of inheritance taxes payable if the property is owned directly. Because the deeds are registered in the company name, it is also inexpensive to transfer ownership of the property - simply a matter of transfering the shares of the company. Offshore company ownership is also a means of maintaining anonymity with regards to the purchase.
SISA and Other Taxes
Other costs related to your purchase must also be taken into consideration:
a) SISA tax (purchase tax) imposed by the government. This tax can vary widely and is unavoidable except where a property is already owned via an offshore company.
b) Notarial and Registration fees, are also unavoidable and amount to aprox. 2,5% of the declared purchase price
c) Lawyers and legal fees, vary from 1,5% to 2%. A major benefit is that power of attorney can be given to a lawyer, saving you time and travel costs to sign documents personally.

Buying Your Property
Having agreed to purchase a property, it is normal procedure in Portugal to lodge a 10% deposit with your lawyer. This is a sign of 'good faith', and the vendor should then withdraw the property from the market. A promissory contract is usually signed after searches by your lawyer, within one month of the deposit being made. This is a commitment to purchase/ sell the property, and there are usually penalties if either party breaks this contract. When a promissory contract has been agreed between lawyers, it is signed by both parties and the deposit passes to the vendors. it is non-refundable except where
clauses have been agreed, such as 'subject to mortgage' etc. A date then is set forth for the signing of the 'escritura' or final deed. This is usually 3 - 4 weeks after signing the promissory contract. Once done, and the property has been registered with the land registry, it is legally yours.
Property Management and Letting
Once you have decided on the type of property and the area, you should also consider hoe often you will be staying there. Could you offset costs by renting the property in the high season? What kind of property brings the best rental income? On-going management and maintenance costs also need to be considered. Many reputable companies specialise in this field, and indeed we have our own associate company which will be pleased to give a quote.

About This Information
This is simply intended as a helpful outline and 'food for thought' for anyone considering buying a property in the Algarve.