Guide to buying abroad in Portugal
Portugal has become one of the most popular destinations for British holiday makers who enjoy the great outdoors. Golfing holidays are extremely popular as are all other outdoor pursuits including surfing and water skiing and from horse riding to kite surfing.
Its whale watching tours and national parks, beaches and romantic city locations are all what makes Portugal a great location for a holiday home.
As with all mortgages either here in the UK or abroad you will have to supply a proof of income. All your existing financial obligations will be taken into consideration, including any existing mortgage or rental payments and bank loans. Your lender will look to make sure that your existing out goings, including your new Portugese mortgage, will not exceed 35% of your total monthly outgoings.
You can secure a mortgage on a property in Portugal for both renovation projects on older properties as well as for new builds and for straight forward standard purchases. If you are self-employed you will be assessed on your income generated over the past 36 months.
If employed your lender will base your income on your payslips and the amount that is credited to your account monthly.
Sisa is a tax on acquisition on property and the rates are;
- 0% to €80,000
- 2% - 6.5% thereafter
- 5% for land
If the buyer is in a low tax regime the rate is 15%.
Buying a property here is much like buying in the UK. You will need to put down a deposit on the property which is on average around 20% and less for a new build.
Your home loan will have a term of anything from 5 to 20 years and should be fully discharged by the time you reach 65. You will be required to take out suitable life insurance against the property.
You will need to sign a contract once your offer has been accepted and this is called a Contrato de Promessa de Compra e Venda. If the sale falls through then the deposit will be lost if the buyer does not proceed. If the seller pulls out then the depost lost is doubled and paid to the buyer.
When the sale of the property is completed and the contract signed all fees and the rest of the purchase price are paid paid.
Changes in the exchange rate may increase the sterling equivalent of your debt. This site is intended for UK residents only. Best UK Mortgages is a trading name of Grovelawn Limited.
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