Portugal has been popular with second home seekers and retirees since the 1960s. Its climate and the fact that it is just over two and half hours by plane from London make it particularly attractive to people from the UK. The country offers a stunning climate, rolling countryside, idyllic sandy beaches and some of the most renowned golf courses in the world. The government has also imposed strict planning regulations, invested billions (with help from the EU) in its transport infrastructure, and actively promotes and supports tourism on a global scale.
The process of buying property in Portugal is not too dissimilar from that of the UK. First of all, a verbal agreement is usually reached with the seller. The buyer's solicitor conducts all the necessary checks such as title and building license etc. A preliminary contract is drawn up and signed.
The purpose of the contract is to describe the terms of sale along with a completion date. Once the terms have been agreed a deposit is paid to the buyer, which is usually 10%. If the buyer withdraws from the sale after this point the deposit is non-refundable. Upon completion all the remaining funds, fees and taxes are paid and both parties sign the deeds before a notary at which point ownership is transferred. When the deeds are signed the transfer of title should be notified to the land registry and local tax office.
There are two different taxes that need to be paid. The first is stamp duty which is levied at 0.8% on the purchase price. The second is the transfer tax, levied using a sliding scale ranging from 1% to 6%. In addition, solicitor's fees can range from 0.5% - 1%. Notary and registry fees are generally less than €1,000.
Even after the recent global economic downturn, interest in Portugal among overseas buyers continues to increase.