Despite the unpredictable state of economies around the globe, property, as a rule, remains a sound long term asset in which to invest. The property market in Portugal is no exception, and continues to offer attractive options to investors. This is according to James Bowling, CEO of Monarch & Co, a company that specialises in investor and immigration programmes in a number of territories around the world.
“The property buying and rental market in Portugal continues to show resilience despite the tough economic climate and is performing extremely well,” says Bowling. “This is largely due to the fact that Portugal is possibly one of the safest European countries in which to live or own property. It has been voted as one of the best places to invest, work and live in the world, and with its beautiful beaches and wide variety of outdoor activities it continues to attract both property investors and tourists alike.”
In a bid to attract capital, promote job creation and increase investment in real estate, Portugal has launched a Portugal Residence Programme or Golden Residence Permit (ARI) that is linked to certain investment requirements. Investors who want to make use of the Residence Programme can invest in an existing Portuguese business, establish a business or invest in real estate. “Property buyers, however, will be able to enjoy all the benefits of being a part of the European Union without any obligation to permanently reside in the country, provided they meet the requirements of the programme,” says Bowling. “The permit is available to all foreign national investors who are not citizens of the European Union and gives holders all the benefits of a premium Schengen Visa, including the freedom of movement to the other 26 member states including the United Kingdom and Ireland. To qualify, a property buyer will need to acquire real estate with a minimum value of € 500 000. Family and dependents will also qualify for residence and after the fifth year, a permit holder may apply for Portuguese citizenship and thereby an EU passport.”
According to Bowling, investors should work on saving up for around 8% of the cost of the property to cover costs such as notary fees, lawyer fees, stump duty, official documents and energy certificates. He notes that if a buyer chooses to purchase a new property, they will also need to pay a reservation fee of € 6 000. “This is paid along with the submission of an offer and reservation form, stipulating the terms of payment to the builder or developer. Once the offer has been accepted, the property is taken off the market and the buyer has 10 days to pay a deposit of between 20% and 30%, minus the reservation fee that has already been paid. This is paid along with the signing of the promissory contract. The buyer will then receive notice from the builder that the property is ready and the deed is ready to be signed. The remaining balance is to be paid on completion of the property.”
Bowling explains that in the case of purchasing an existing property, the buyer will make a written offer on the property outlining the terms of purchase. If accepted, a date for deeds will be set. The deed is signed at a Notary’s office and the transfer of money is then completed.
He notes that many South African investors have found the property market in Portugal a rather attractive investment option. “Unlike some of the colder countries, Portugal has a very similar lifestyle and climate offering as South Africa,” says Bowling. Added to which, the cost of living in Portugal is fairly average when compared to some of the other European countries. Portuguese healthcare is also available to any legal foreign resident who has registered with their local health centre. “The Portuguese healthcare system is made up of both state-run and privately run healthcare facilities and provides total healthcare coverage to registered individuals and citizens and is funded through taxation. There is also a private healthcare system available in Portugal that provides high quality medical services to patients,” he says.
“Purchasing property in Portugal is a viable option for savvy investors looking for the opportunity to benefit from all this developing nation has to offer,” Bowling concludes.
Monarch&Co are hosting road shows around the country to outline the investment requirements for the Portuguese Residence Programme. They will be held in Cape Town on 5-6 February; Stellenbosch on 7 February; in Durban on 10 and 11 February as well as in Johannesburg from 12-14 February. For more information contact James Bowling at Monarch & Co on 011 883 9018 or visit www.monarchandco.com