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Frequently Asked Questions

Approach: you convinced me ! I want to buy in portugal

For service and choice! Creativ Real Estate is not a real estate agency like any other. The goal of growing my business is simply responding to a demand, guiding customers to make a smart purchase. By working with a very large network of agencies throughout the Algarve but also banks and developers, my goal is to offer all products that may interest French speakers. Having worked 3 years as a real estate agent in the region, I have been able to build a very useful network for buyers. Creativ Real Estate has a customer-centric approach and guides you through your purchase. If, despite everything, you cannot find the property that suits you on the site, we will carry out research to find the one that suits you best.

You can count on us to facilitate your learning phase in Portugal. From understanding the real estate market, from planning visits to orientation and support in your choice until the purchase is made, we are here for you.

Concretely, we will proceed as follows:

  • The first contact with Creativ Real Estate: we will make an appointment for you by Skype or phone in order to better understand your needs
  • We will study your objectives with you: do you want to make your property profitable, move to Portugal or use it as a base? Which region would suit you best according to your expectations, the type of property sought? We will then send a selection of goods.
  • Once the flights have been booked, we will meet you there for the confirmation of the tour program
  • I will accompany you in personalized tours of real estate and give you my professional opinion.

It is easier to get financing in Portugal in 2016 than it was a few years ago. In general and on the basis of income, banks agree to finance foreigners up to a maximum of 75% after the appraisal of the property. In the case of a bank takeover, the bank may agree to lend up to 100% of the value and at more attractive pricing conditions.

Note, however, that Portuguese banks lend almost exclusively at variable rates indexed to the 12-month Euribor. There are a few fixed rate offers but with very high rates. On average, borrowing rates will be around 1.2% + Euribor or around 3.5% at a fixed rate, which is more than in France or Belgium.

Another possibility, in my opinion more interesting is to finance your property in your country. They will do this only if you can put a mortgage free property in your country or if you can offer them financial investments with them in return

CREDIT IN BELGIUM / FRANCE VS CREDIT IN PORTUGAL

  • BE / FR Guarantee in your country / Property free of mortgage or Possibility of placing a group insurance as a guarantee (expiry at 65 years )
  • PT: Guarantee / mortgage taken on the property in Portugal
  • BE / FR 100% funding possible
  • PT: 70% maximum funding, or 100% if the bank owns the asset
  • BE / FR Relatively low rate
  • PT: Higher variable rates + insurance for the outstanding balance in the event of premature death

Yes! However and contrary to our habits, it is the lawyer of your choice who will manage the entire procedure. She will check all the documents to avoid any surprises (plans of the property, checking if the property is under mortgage, verification of the payment of the condominium …).

The lawyer is by your side in all proceedings; from your request for a fiscal number (necessary for a purchase) to the changes of meters in your name. In this regard, Creativ Real Estate can put you in touch with a French-speaking law firm that will ensure the security of the real estate transaction in order to make a purchase in peace.

Unless the buyer or seller wants a longer period, you will generally own your property within 6 to 8 weeks. Here are the different steps:

1. The Reservation

After confirming the terms and conditions of sale, the real estate agent confirms the sale to buyers and sellers. Sometimes, it happens that the seller requires a reservation of the property through a deposit; usually an amount of 5000 €.

2. Appointment of a lawyer

This will work on your behalf and verify all documents pertaining to the asset. The lawyer will need a power of attorney to search all of the documents on your behalf. The lawyer will analyze these in order to protect you against any risk:

Tax document certifying that there are no unpaid taxes
Housing permit attesting that the housing meets all legal requirements
Proof of registration of the property to ensure that the owner has the right to sell and that there is no load cornered at home

3. Sales agreement

The purpose of this contract is to bind the 2 parties by notifying all the conditions of the sale (seller and buyer). This contract will be prepared by the purchaser’s lawyer. It will highlight all the negotiated terms of sale including the price, the payment schedule, the date of the deed as well as other terms agreed between the 2 parties. The fixed deposit (usually 10% of the amount of the sale) is paid to the seller when signing this contract.

4. Authentic deed and registration

Your lawyer is also responsible for arranging the signing of the authentic deed with the notary. The balance of the purchase price must be paid and the notary confirms the transaction by signing the official documents which will subsequently be recorded. The keys and ownership documents are exchanged at this point and the ownership officially becomes yours. Your lawyer will present a copy of the deed to the Ministry of Finance and Land Registry in order to register you as the new owner. The time between signing the compromise and the deed may vary. Usually, it is between 30 and 60 days.

Approach: More information before you make a decision

The assets that have made this country the investment par excellence of recent years, whether as a vacation spot or to spend your retirement are without any doubt:

  • The climate: 300 days of sunshine a year in the Algarve, mild and dry winters, hot summers but with a breeze coming from the Atlantic refreshing in the evenings.
  • Taxation: Portugal has become a tax haven for retirees with non-taxation on life insurance and pension income for 10 years Easy access thanks to the development of low cost companies.
  • Unparalleled quality of life: this is a country where you can feel completely secure. In addition, gastronomy is not to be outdone. His recipes are simple but delicious. Wild pig seafood, fish caught on the coast, tasty fruits and vegetables and quality wine at ridiculous prices!
  • The cost of living: on average, the cost of living in Portugal in 2020 is 31% lower than in France.

Add to that a quality real estate market at very reasonable prices but rising and generating very good rental contributions.

Without a doubt!

The Global Peace Index is the world’s leading peace ranking. The report takes into account the degree of harmony or discord within a nation; ten indicators assessed as describing safety and security in society are taken into account.

In this 2019 ranking, Portugal ranks 3rd in the world out of a total of 163 countries.

For comparison, Belgium is in 18th position, Spain in 32nd and France in only 60th !

Also according to the Mipex index, Portugal is the 2nd most welcoming country far ahead of Spain and just behind Norway. It is very easy to integrate in Portugal, the people are very welcoming.

Portugal is ranked 12th on the list of best health systems in the latest WHO survey.

Very close to France, health in Portugal is articulated between the private and the public. The public offers a good quality of care and support, however it requires waiting times which can vary according to the seriousness and the priority of your condition. So many people who can afford it opt for private consultations which are not supported.

Rest assured, you also continue to enjoy your rights in your country of origin.

This is one of Portugal’s greatest assets. The country’s minimum wage is only 635 euros in 2020. With a much higher income, expatriates live there like roosters in pasta.

According to Numbéo (the largest database), Portugal is ranked 54th country in the world in relation to the cost of living. In comparison, Belgium is in 18th position, France in 14th and Spain in 41st.

Likewise, Eurostats data on the Consumption prices of goods and services in the European Union reveals that Portugal is at the top of the cheaper in Western Europe.

By settling in Portugal you increase your purchasing power for the services and consumption of:

  • + 9% if you live in Spain
  • + 31% if you live in France
  • + 20% if you live in Belgium
  • + 35% if you live in Luxembourg
  • + 53% if you live in Switzerland

In general, the average house price per m² has increased significantly in recent years. If we look more specifically at villas, the prices of these increased by 4.2% in 2019.

However, this is nothing compared to the surge in apartment prices, whose average price per m² increased 9.2% in 2019.

For the Algarve region, the average price per m² is € 2,209. This experienced an increase of 7.3% in 2019. The cities of the Algarve with the biggest increase are Silves (+ 14.2%), Olhão (+ 13.3% with 1743 € per m²) and Vila Real de Santo-Antonio (+ 12.8% with € 1,860 per m²).

Here are some prices for towns in the western Algarve: Faro (€ 2,252 per m²), Portimao (€ 1,917 per m²), Albufeira (€ 2,219 per m²) m²), Tavira (€ 2,079 per m²) and Lagos (€ 2,644 per m²).

It all depends on your desires and your lifestyle !

The Algarve is often referred to as the Florida of Europe. It is full of all the elements for a Dolce Vita in Portuguese version. 300 days of sunshine a year and the mildest climate in Portugal, superb beaches, tranquility (except in August as all around the Mediterranean basin!), Magnificent golf courses, fresh produce from the ocean and a very large French community.

Lisbon is a serene, gentle and pleasant capital, full of shops, museums, good addresses! Close to the sea accessible by train, it is probably one of the most beautiful European capitals. It’s the perfect place if you’re a city dweller!

It is also a region where many French speakers are settled. Indeed, the capital has a large expatriate community. French high school, associations and chambers of commerce are very active there.

It all depends on where you buy from. Certain criteria are in high demand and will influence the profitability of your investment, in particular a sea view or proximity to a city center.

On average, the net profitability is between 3 and 4% for seasonal rentals. This average is taken into account by deducting costs such as building charges, consumption charges, annual property tax, agency fees, cleaning.

Likewise, there is a huge demand for long term rentals in quality properties. This type of rental requires less labor and ensures less wear and tear on the asset in question.

If we combine the rental yield, the increase in prices over the long term (between 3 to 4% per year also), and a foothold for your next vacation; what are you waiting for to invest in it!?

Super advantageous! Retirees (from the private sector) who decide to reside at least 183 days in Portugal are exempt from tax (yes, 0%!) On income for 10 years if they obtain Resident status Not usual until March 31, 2021. Those who would have obtained the status after this date will have a tax rate of 10% on their income.

But the country has other fiscal attractions: no taxes on large fortunes, very low property taxes (generally around 400 € / year for an apartment and 800 € for a villa), foreign professional income capped at a rate of 20% on many categories of professions, no social security contributions for the first 18 months of your activity.

In this regard, I can provide you with a file setting out the conditions of access and the benefits granted.

No! Portugal does not apply inheritance fees to spouses and children who are heirs. A new European convention, which entered into force in 2015, reverses the current system in inheritance. It provides that it is the law of the country of residence of the heir that applies and no longer that of the country of residence of the deceased, i.e. 0% if you live there.

Unlike France and Spain and just like in Belgium, Portugal levies only one property tax if you don’t rent your property, the IMI. It is similar to property tax (France) or property tax (Belgium). It generally varies according to the type of property, its size, date of construction and ranges between 400 to 800 € / year Compared to rentals, declared income is subject to taxation.

There are mainly 2 cases; either you are resident in another country ; in this case and on request for a rental license (alojamiento local), you can benefit from the simplified regime.

  • The tax base is 35% of the turnover generated. In fact, you get a 65% deduction considered as a flat rate for costs (building charges, electricity, cleaning, etc.)
  • Tax rate for a non-resident: 28%
  • Formalities: tax declaration for the start of the economic activity of operating furnished accommodation (s) for tourists (before starting the ‘activity), mode 3 declaration – annex B, in May of the following year

Either you are resident in Portugal:

  • The tax base is 35% of the turnover generated. In fact, you get a 65% deduction considered as a flat rate for costs (building charges, electricity, cleaning, etc.)
  • Tax rate for a resident: between 14.5% and 48% depending on the progressivity mechanism (therefore between 14.5% and 48% x 35%)
  • Formalities: tax declaration for the start of the economic activity of operating furnished accommodation (s) for tourists (before starting the ‘activity), mode 3 declaration – annex B, in May of the following year.

This income is totally tax exempt in your country, but, through the progressivity reserve mechanism, it may slightly increase the tax burden on other income in your reporting country.

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