Friendly tax rules and favourable buying conditions make Portugal an increasingly attractive place to buy in 2015. PortugalBuyingGuide.com, a free information resource with offices in the Algarve and London, outlines five key reasons why now is an ideal time to snap up a property there…
Article written by The Overseas Guides Company
September marks the first anniversary of PortugalBuyingGuide.com’s office opening in Vilamoura in the Algarve, and one year down the line, the company reports snowballing interest in property along this famous stretch of coastline. Here the team highlights the main attractions of buying a home in Portugal right now.
– Evidence points to a recovery in the property market. In the latest Portuguese Housing Market Survey by RICS, average property prices in Portugal were predicted to rise by three percent over the year ahead – from August 2015 – and then five percent per annum over the next five years, with the Algarve and Lisbon spearheading growth. In particular, in more desirable areas, such as Vale do Lobo, Quinta do Lago and Vilamoura, limited supply of new-build is putting upward pressure on prices. With the market turning, a well-located property purchase now could see healthy capital appreciation over the long-term.
– Mortgages are cheap and easy to come by again. Since Portugal’s complete exit from its bailout last year, there has been an injection of confidence in the country’s economy and mortgage market. Portuguese banks have become more willing to lend and more competitive, typically offering 80 percent LTV and rates of below 3.5 percent, helped by the incredibly low Euribor rate set by the European Central Bank.
– The weaker euro has made Portuguese property much cheaper to British buyers in 2015. The exchange rate began the year at around £1/€1.27, but in January began swinging in favour of the Brits, so that since May it hasn’t dropped below £1/€1.35. This summer it even hit a seven-year high of £1/€1.44. In real terms, a €200,000 property in Portugal was around £9,000 cheaper at the end of September compared to the same time last year, thanks purely to the better exchange rate.
– Portugal’s tax system is highly favourable to foreigners. To those who qualify, the country’s Non-Habitual Residents (NHR) scheme guarantees considerable tax breaks on pension and other foreign income in the first ten years of residency. In addition to this, Portugal has no wealth tax and inheritance tax is negligible compared to other EU countries.
– For pure investors, there is a resurgence of luxury buy-to-let properties in Lisbon. A lifting of rental controls in 2012 has triggered the rehabilitation of many of the city’s older grand properties, including former palaces, many of which are being converted into luxury apartments. This market is being fuelled by Portugal’s Golden Visa scheme, which grants residency to non-EU citizens who invest a specified amount in property or a business in Portugal. Most Golden Visa applicants come from China, Brazil and Russia, with many opting to purchase in Lisbon.
“Even compared to a year ago when we opened our doors, we’re seeing an uplift in enquiries,” says Marina Pasquill, Portugal Country Manager at the Vilamoura office. “As our office enters its second year, we’re looking forward to a continuing rise in enquiries and being directly involved in one of Europe’s most exciting international markets.”
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