Faro Property
Property in Faro
In the year 2004 there was a radical change in the taxation laws in Portugal which meant that foreign buyers could no longer purchase property there via an offshore company which enabled them to save thousands of pounds in tax. This was met with a great deal of resistance and naturally gave rise to concern that it would seriously damage the housing market, and in particular the second home purchases in the Algarve region.
Happily this has not proved the case as the market is still very strong with the Algarve riding high and prices still increasing significantly with demand keeping pace with supply.
The real estate market here has been stable for the past 20 years and looks likely to remain so for the foreseeable future, with villas and apartments offering an excellent medium to long term investment opportunity.
So why does Portugal, and the Algarve in particular, continue to be so attractive to both holidaymakers, investors and those looking to buy their dream home abroad? This can be attributed to several factors: property prices here are still lower than in the most popular regions of France and Spain: it is not expensive to fly here with a large number of cheap flights to choose from with airlines constantly under cutting and offering special deals: and the opening of the Via do Infante, which took twelve years to complete, and has provided a fast toll and congestion free route across the entire Algarve region from Villa Real to St Antonio do Lagos.
Add to this the fact that the Algarve offers 200 kms of coastline, 3000 hours of sunshine every year (which is more than Florida gets), a low crime rate, no threat of terrorism (unlike Spain or Florida), low pollution, strict planning regulations protecting the region from over development, a regulated and easy to follow property purchase process and not forgetting 24 excellent golf courses!
Apartments In Faro
Apartments are still the most popular type of accommodation for investors or people wanting to purchase a second home abroad.
This is because if you purchase an apartment which is part of complex, services such as maintenance, gardening, pool cleaning, etc, are put in place by the community and managed by the elected president. Thus removing your concerns of living in one country while trying to maintain your apartment overseas.
The Algarve has a rather more exotic charm than neighbouring Spain as it is less over developed and has suffered less exploitation. Planners have managed to retain the appeal of the coastline by keeping it unspoilt and taking great care to protect the entire region from beach front development. You cannot build closer than 500 metres to a beach and to try and get permission to build anything above four storeys high is virtually impossible.
It is worth considering buying an apartment off plan as this is when you can still purchase at a relatively low price and see a return on your investment when the property realises its full value after completion. A one bedroom, one bathroom apartment in Faro can cost anything between €125,000-€230,00.
Property is sold on a freehold basis, and when negotiating a price do not forget to add on the tax which certain purchases attract. For example, 7% (known as IVA) should be added to any figure that you are quoted for an apartment which is a new build, Resale properties do not attract IVA, but there is a 7% property transfer tax.
When buying off plan you will be asked for anything between a 10%-30% non refundable deposit when signing the preliminary contract, and you may also be asked for as much as 30-40% of the purchase price to be paid while the property is still under construction, with the balance being due when the Final Deed and Completion takes place.
If the vendor drops out during any stage of the purchasing process any monies you have paid will be returned, together with a penalty. Make sure that you instruct a recommended lawyer to act on your behalf to ensure that all the documentation is water right.
Buying property is a stressful process no matter where you are in the world. If you click on our estate agents section of this website you will find contact details for several reputable firms in the Faro area who have excellent local knowledge and who will be able to guide you through the whole process.