Buying Guide Details
Buying property on the Algarve - Faro & East
Overview
The Algarve was one of the destinations at the forefront of the European package holiday boom in the early Sixties and has remained a firm favourite destination with visitors from the UK ever since. Many of those holidaymakers have subsequently become property owners along this marvellous coast, which accounts for around 90 per cent of all UK home purchases in Portugal.
The Algarve has a terrific, year-round climate, lovely beaches and a staggering collection of golf courses, along with many other sports facilities on land and sea. For the purposes of searching for property, the coast is often considered as three separate parts – Eastern, Central and Western. While some stretches have succumbed to overzealous property and tourist development, mainly in the central area, there has been a much more sympathetic approach at its eastern and western ends in recent years.
Partly this is due to protection of areas of natural beauty and partly down to appealing to a more discerning, and affluent, property buyer who values high-quality, low-density schemes and environmental conservation. Overall, the Algarve is by no means a cheap second home destination but property buyers are assured of a great selection of properties and first-class amenities.
Where to buy property on the Algarve - Faro & East
East of Faro, where the Algarve - Faro & East coast stretches up to Vila Real de Santo Antonio close to the Spanish border, property buyers have had a limited choice of properties until quite recently. Much of the coast is set aside as a protected wildlife area, the Parque Natural da Ria Formosa, a tidal lagoon that is protected from the sea by splendid sand flats known as ‘ilhas’. These can be reached by ferry from small harbours such as Olhao.
There are beaches further up the coast as good as any on the Algarve - Faro & East, among the most notable, Cabanas and Praia Verde, and it is still easy to find a great, deserted stretch of white sand. Towns such as Tavira and the small fishing ports like Santa Luzia have retained their traditional charm and local property styles.
There are, however, a number of new property developments on the Algarve - Faro & East now, with golf proving to be as popular here as in the rest of the coast. For those who prefer traditional properties away from the tourist developments, inland, towns and villages such as Alcoutim and Castro Marim remain untouched by the schemes aimed at overseas property buyers and still offer beautiful examples of unspoilt Portuguese life.
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The Process of Buying Property on the Algarve - Faro & East
- The first step is usually a verbal agreement between property buyer and seller, after which the property buyer’s lawyer should carry out all necessary checks – title, building licence, etc
- A preliminary contract is then signed, which lays out the terms of the sale, including the completion date. At this point a deposit is paid, usually of 10%. This deposit is forfeited if the property buyer backs out, and if the seller withdraws he/she must pay the buyer double the value of the deposit, i.e. 20%
- On completion both parties sign the deeds (escritura) in front of a notary and ownership is transferred. The balance of the purchase price plus all fees and taxes must be paid before the escritura can be signed
- As soon as possible after signing the deeds, the transfer of title should be lodged in both the land registry and the local tax office
- If buying property on the Algarve - Faro & East off-plan a smaller deposit is usually required, followed by stage payments. This depends entirely on the developer
- When buying property on the Algarve - Faro & East that is resale, make sure a survey is carried out in addition to usual checks.
Homes Overseas Property Club
Homes Overseas has joined forces with a collection of IFA specialists to form the Homes Overseas Property Club (HOPC), designed for existing and prospective overseas property homeowners.
The Club – which has access to international lawyers in no fewer than 43 different countries - has been set up in order to guide people through some of the various issues relating to buying and maintaining a property overseas. It offers advice on a range of topics, including financial, legal, insurance, taxation, property management and foreign currency matters.
For further information please telephone 0845 838 7142 or email info@homesoverseaspropertyclub.com
Fees & Taxes
- Transfer tax can be anything up to 8% depending on the value of the property on the Algarve - Faro & East. This must be paid before the final documents are signed
- Legal fees tend to be around 2%
- Agents’ fees can be anywhere between 1% and 10%, although the average is around 3%
- Allow around 2.5% for notary and land registry fees and up to 0.8% for annual local taxes
- Fees and taxes can vary greatly depending on the municipality, so be sure to get your lawyer to check out the relevant legislation thoroughly
- VAT at the current rate of 19% may apply. Get your lawyer to find out what fees this affects
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