Printed information is
available from sources outside Portugal. This information should be
treated with circumspect as it could be incorrect or out-of-date.
Outside Portugal many
Agencies have been established as contacts to seek potential local
buyers. The information available from these Agencies are often based
on superficial knowledge of the local conditions, laws and regulations.
Some countries have
established mutual Chambers of Commerce, and when approached they will
supply a list of Agents who are there members. This list can be used
as a useful reference but it should not be taken as any form of special
endorsement but it can be a beginning list from which to work.
When you have chosen your
area in which you wish to acquire a property select one or more from the
Research the local
reputation of each Agent as the Algarve can be likened to a large village
and "bad news" travels fast.
One form of reference is
that the Agents who have been established for many years can be amongst
those that are the most reliable - but this no guarantee.
A good Agent will first
encourage the buyer to explain their needs in some depth so as to advise
and select from their properties correctly.
The time of an Agent is
as valuable as the buyers - good Agents will tend to show you properties
that you can afford and that meet your needs.
Many Agents have past and
present knowledge in regard to the history of many properties and local
developments. This can be very valuable in the case of re-sales as they
will know the quality of the builder and what may be hidden under the
paint and concrete.
As there are many aspects
in purchasing a property the good Agent will assist you through all the
necessary steps - he will also provide the "after the sale"
service that is always necessary for any purchaser in any foreign
country with the lcoal different regulations.
The good Agent will have
established contacts and relationships with key people in various local
State offices that can prove essential in smoothing the path of possible
problems that may arise in bureaucracy
Beware of using that very
friendly or casual social acquaintance, whatever their nationality!
Individuals usually have
limited knowledge of the rules and regulations regarding property and if
they appear to be very well informed consider the possibly that they
have some financial interest in the transaction being completed. These
friendly individuals are in many cases paid money by the seller for the
introduction that results in a sale of property. Most important of all
- if anything goes wrong these third party people have no legal
responsibility in your purchase.
Initially finding the
right property is the most important part. This initial chosen property
using a social acquaintance may quickly be discarded after hidden facts
come to the "light of day"
Lawyer's offices are
often busy with clients with problems caused by a decision to purchase a
property directly from a seller without using an Agent, or even worse,
not using an experienced lawyer.
When choosing a Lawyer,
Architect, Engineer, or Builder, it is advisable to select from those
names of people who are based and mainly work within the geographical
area in which a buyer's property is located. These professional people
should have well-established contacts in their local State and Municipal
offices that can be used to implement a chosen project or assist in the
making of a purchase.
In selecting who to use
the advice of a Real Estate Agent should be sought as it is in their
best interests to recommend good people as they will be probably
dependant on the quality of these services to bring a sale or a project
to a successful conclusion.
When selecting a Lawyer
for your conveyance you will find that they are tend to be conversant
with several languages, particularly English. Their fees can vary
according to the total value involved. A normal percentage for a middle
priced property is 3% as listed in their Table of Fees. In some cases
it is possible to negotiate for a lesser percentage but your final
agreement may end up related to the quality of the professional service
A lawyer will also be
able to provide practical advice on all the financial matters and costs
relating to a intended purchase and carry out the necessary searches.
Be sure that your fully understand what the charges are and what they
will be doing for their fee. It is important to consider that every
country has its own manner of "doing things". A buyer can
become very frustrated by trying to impose their own will, and not
trying to bring their understanding inline with the system that applies
in Portugal. However, this does not act as an excuse for inefficiency
or misleading information.
As from the 1st of
January 2004, the laws relating to Inheritance and Donations has been
changed. If the beneficiaries are direct members of the family in both
these cases there will be no Tax applied.
Many properties in the
past have been purchased through an Offshore Company. This method
places a property in the ownership of a Company that is registered
outside of Portugal domain through a Share Purchase Agreement. This
type of ownership presents added annual costs and most lawyers are
conversant with this style of transaction. Buyers should make
themselves aware of the advantages and also the disadvantages prior to
It is advisable that any
agreements between a client and an architect, project manager, builder,
or contracted supplier, must be in writing. Any changes to the original
agreement, however small, should also be placed on paper and signed by
both parties for later reference in case of possible misunderstanding
It is reasonable to
state that the majority of older properties in the Algarve have been
architecturally changed over the years without the correct documentary
procedures being properly implemented. Garages have been turned into
bedrooms, terraces enclosed, and extensions built. We recommend that a
potential buyer should see that the following two documents are
checked in this respect. Firstly, that the description as stated in the
"Caderneta" issued by the local Tax Office (this is a form of
Log Book about the property), and that it agrees with the physical
aspects of the property as it appears today. Secondly, the property
plans that are lodged in the Town Hall (Câmara) relating to the
construction area also agree with the physical aspects as seen.
Please note that just
as in other European countries there will be annual "rates"
to be paid to the Municipality and it has been renamed being changed
from the previous "Contribução Autárquica" to the new name
of "Imposto Municipal Sobre Imóveis - IMI". This change has
also involved a new structure of lower Tax being applied but against
an updated value on every individual property. The new value that will
be placed on the property by the local Tax Office according to their
own internal valuation.
Our final "Tip".
By just using a intelligent approach and commonsense, any purchase will
become the same pleasurable experience as buying in your home town. We
cordially invite you to join the many thousands of other very happy and
contented home owners in the Algarve.