Buying Guide Details
Buying Property on the Portuguese Islands
Overview
Many people dream of buying property on an island and Portugal has a number for the overseas property buyer to choose from, some of which are well-established holiday destinations much visited by UK and Irish tourists, others of which are much for remote, providing solitude and tranquillity. Natural beauty and a superb climate are common to them all.
The Madeira archipelago is situated off the west coast of Africa. The island of Madeira has been a popular holiday resort for decades and it is not surprising that visitors should be taken by its excellent weather and the richness of its native wildlife and consider buying property of their own there. Its neighbour, Porto Santo, is a newcomer to the overseas property scene but with a number of carefully planned developments underway, including a couple of golf courses, it is certainly on its way up.
The Azores are more remote, in the middle of the Atlantic, but like Madeira, have been much visited over the years as a cruise destination and by airline services to its international airport. Regular services by air and sea link the nine islands in the group. Some of the big names in Portuguese golf development are eyeing The Azores as an international destination of the future. Their stunning beauty makes these volcanic islands an idyll for nature lovers.
View property for sale on Madeira
View property for sale in the Azores
The Process of Buying Property on the Portuguese Islands
- The first step is usually a verbal agreement between property buyer and seller, after which the porperty 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 Portuguese Islands off-plan, a smaller deposit is usually required, followed by stage payments. This depends entirely on the developer
- When buying property on the Portuguese Islands 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 Portuguese Islands. 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
View property for sale on Madeira
View property for sale in the Azores
Buying property in Portuguese Islands