Answers to all Your Algarve Questions
Here are some of the most popular questions, along with the answers we are asked regarding living in the Algarve. Feel free to get in touch if you have any you would like added. Most of the topics are answered in full in our latest news section. However, you can find the links to the relevant articles in the answers below for more information.
Buying Property
Fortunately, Portugal does have an outstanding record for welcoming ex-pats. The conditions for foreigners getting a mortgage are more or less straightforward.
If you are a foreigner or non-resident of Portugal looking to buy Algarve property and are looking to do so with a mortgage to finance the purchase, now is a great time to do so as the banks are now lending again due to the economic recovery in Portugal and the solid state of the property market.
For the most part, mortgages are the most popular way to finance buying a property in Portugal. Not only can residents apply for a mortgage from Portuguese banks but non-residents are also able.
The current variable mortgage rate in Portugal starts at approximately 3.3% per year based on a 30% loan to the overall value of the property.
Those rates can increase if you require more finance for instance 60% to 70% loan to property value. If you are looking for fixed rates they are available at around 4.1% for up to 5 years based on loan-to-value ratios of up to 70%.
The length of time it takes to buy a house in the Algarve can vary, depending on the complexity of the sale, the availability of financing, and the presence of any legal or bureaucratic obstacles. On average, it may take anywhere from a few months to a year to complete the process of buying a house in Portugal.
Below is a brief outline of the steps involved in buying a house in the Algarve:
Firstly work out your budget and financing options: You’ll need to determine how much you can afford to spend on a property and whether you will need to acquire a mortgage.
Find a knowledgeable Algarve estate agent: Working with a local estate agent who is familiar with the Algarve property market can be helpful in ensuring everything goes smoothly.
Start your search for properties: Once you have a general idea of your budget and financing options, you can start searching for properties that meet your criteria.
Schedule viewings of eligible properties: If you find a property that interests you, you will want to schedule a viewing so you can get a better sense of the property, its condition and its location.
Make a formal offer: If you decide to make an offer on a property, your Algarve estate agent can help you negotiate the terms of the sale.
Conduct due diligence: Before finalizing the purchase, you’ll want to conduct due diligence to make sure there are no unexpected problems with the property, such as outstanding debts or legal disputes.
Sign a purchase agreement: If both parties agree to the terms of the sale, you will sign a purchase agreement that outlines the terms and conditions of the sale.
Complete the sale: After signing the purchase agreement, you will need to complete the sale by arranging the transfer of the funds for the purchase price. You can then register the property in your name.
The process of buying a house in the Algarve can take several months, sometimes a little longer, depending on the condition of the sale and any legal or bureaucratic obstacles.
In our humble opinion yes!
So the short answer is yes, property prices have been on the increase for the last 20 yrs and show no signs of stopping. We see plots of land for sale at the same price as a prebuilt property in the same condominium and same size plot 15 yrs ago!
With so few Algarve properties for sale in the marketplace, prices are at a premium and will continue to be so. Throw into the equation the shortage of Algarve real estate in the most desirable areas and the time it takes to build new developments, and there is no reason to think otherwise.
If you are seriously thinking about investing in an Algarve property then read on for a more detailed look at the current situation and the forecast for the following year in this article “Is now the right time to buy in the Algarve“.
Once you’ve found your dream home and are ready to make an offer, the actual ‘Buying Process’ in Portugal may seem daunting if you are unfamiliar with what’s involved.
Instructing A Lawyer
It is highly recommended that you use a Portuguese property lawyer to assist with purchasing a property in Portugal.
Property Surveys
If you are taking out a mortgage on the property, a valuation will be carried out by the mortgage lender.
Fiscal Number (Numero de Contribuinte)
You must apply for a ‘fiscal number’, which your lawyer can obtain for a small fee on your behalf.
Promissory Contract (Contrato Promessa de Compra e Venda)
Once a price has been agreed between you, the purchaser, and the property seller, you can sign a ‘Promissory Contract’.
Final Deed (Escritura de Compra e Venda)
This is the completion of the property purchase, where the balance of the price is paid, and the ownership is transferred.
Check here for our complete guide to buying a property in the Algarve