Buying Guide Details
Buying Property on the Algarve - West of Faro
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 property 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 on the Algarve, 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 Western Algarve
The western end of the Algarve coast has been on the ascendancy for overseas property buyers in recent years, and the area is now home to a number of quality developments. The Via do Infante highway now brings the Sagres, the popular resort at the tip of Portugal’s southern Atlantic coast, within an hour’s drive of Faro airport, a key factor in the area’s growing popularity with property buyers flying in from the UK and Ireland.
The craggy coast has a number of excellent sandy beaches and coves punctuated with fishing ports and harbours – the seafood here is sensational. The Atlantic breeze makes for excellent windsurfing and sailing conditions for water sports fans. The town of Lagos is perhaps the best known in this part of Portugal, combining a modern port and marina with a delightful Old Town of winding streets and whitewashed buildings.
Coastal towns such as Portimao, Burgau and Luz have retained much of their charm, while inland, the mountain spa town of Monchique shows another side to the region. A large area around the coast to the west of Burgau is given over to the Costa Vincentina Nature Reserve, a protected wildlife habitat that will ensure that this part of Portugal will not be subject to overdevelopment.
Golf is, as with the more developed central Algarve, a major draw for property buyers in the area. There are a number of high quality courses already established in the region and there are more planned. There is a wide choice of properties on the courses themselves but wherever you buy property you are never far away from a course or three.
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The Process of Buying Property on the Algarve
- The first step is usually a verbal agreement between the 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 property 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 off-plan, a smaller deposit is usually required, followed by stage payments. This depends entirely on the developer
- When buying property on the Algarve 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. 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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