Are you disappointed with the rate of returns on your investments in your country’s real estate market? Are you searching for a destination where the property market is booming, and investors are enjoying a high liquidity ratio? If yes, then look no further than Portugal, a beautiful European country with a high quality of life and low living cost. With abundant sunshine throughout the year and world-class infrastructure in place, it is not surprising that thousands of foreigners and expatriates are choosing to invest in Portugal real estate market.
This article aims to serve as a complete guide for you if you think of Portugal as a destination for parking your money.
Why Choose Portugal?
Portugal is a delight for investors in terms of the high rate of returns. It is one of the most affordable places in Europe to live and enjoy the abundant sunshine and the coastline. With warm and friendly people and world-class amenities, life in Portugal is nothing less than a dream for the investors. The icing on the cake for foreigners is the Golden Visa Program, an easy way to get permanent resident status through investment in real estate. Buying a property in Portugal is easy, with finance readily available at a low mortgage rate.
What is more, you can expect a high rental return if you do not want to live after buying a property. Portugal receives millions of tourists every year from all parts of the globe, and you can expect a good return on your investment in the form of rentals. Lisbon’s rental yield stands at 5.45%, much higher than the nearly 3% rental yield in London, Paris, and Milan.
Hire Services of a Licensed Real Estate Agent
Foreigners can easily buy a property in Portugal and also get their purchase financed by a bank in Portugal. Once you have made up your mind about investing in Portugal, you must find a real estate agent to help you with the process of buying a property. Agents are strictly regulated in Portugal, and every agent has a certified license number. It is very reassuring for the investors as they know they are working with a genuine professional. All agents are required by law to display their license numbers on their websites and business cards.
Hire a Real Estate Lawyer
In Portugal, you need to utilize a lawyer’s services to safeguard your interests as an investor. You can also give the lawyer power of attorney to sign the papers as it will not be possible for you to fly to Portugal now and then. Even though the process of buying a property in Portugal is simple and straightforward; having a lawyer to represent you is very comforting. A lawyer can help in dealing with any potential problem that may arise while buying a property. There have been instances where a relative of the seller has claimed his stakes in a parcel by a foreigner. You can quickly deal with such problems with a real estate attorney by your side.
Enjoy Immense Benefits of Residency by Investment
The Portuguese government has offered permanent residency to investors buying properties worth since 2012. It was done to attract foreign investment to give a boost to the local economy. Thousands of EU nationals have taken advantage of this scheme to obtain permanent resident status in Portugal through their real estate investment. These investors can become permanent residents to have the liberty to live and work in the country, along with their family members. There are immense benefits of this permanent residency status, some of which are as follows.
- As a permanent resident of Portugal, the investor gets free access to all nations of the EU and the ability to travel visa-free to 183 countries of the world
- If the investor is a non-EU national, he can apply and get a passport of EU in 5 years
- There is virtually no requirement for the investor to spend time in Portugal. He can rent out the purchased property and continue to live outside Portugal
- The kids and dependent parents of the investor are allowed to live in Portugal
- The investor enjoys a high-quality life in a beautiful country if he chooses to live in the purchased property
Necessary Things to Buy a Property in Portugal
While buying a property in Portugal is easy for any EU national (Even Britons and Chinese are buying properties in large numbers), there are two essential things to do before anyone can buy real estate in Portugal.
- NIF or tax identification number
- A Portuguese bank account
A tax identification number is mandatory for anyone interested in investing in real estate in Portugal. Once these two formalities are completed, any foreigner becomes eligible to buy a property in Portugal. There is a one-time tax on the purchase of a property. The amount of this tax depends upon the location and the value of the property. Registration of the property is carried out only after the investor has paid this one-time tax. There is no difference between a native buyer and a foreign national in this property tax.
Get the Property Financed by a Local Bank
There is no need to pay for the purchase of a property in Portugal through your savings. Portuguese banks easily give a mortgage to EU nationals. A mortgage is beneficial because the lender will carry out checks on the property and do its valuation. As an investor, you are reassured as this valuation is genuine, and you know that you are paying the right price for a property.
Buying a property in Portugal is a wonderful prospect for investors looking at destinations promising high returns on investment. Portugal has a booming real estate market, and your investment gets a guaranteed rental yield if you do not plan to move to Portugal. You can enjoy permanent resident status through real estate investment and avail yourself of many benefits. Portugal offers high-quality living at a low cost of living among all EU nations.