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Portugal has shown itself to be a resilient second-home haven. So, what changes, if any, have recently come about for prospective property buyers? MATLAW - a Portuguese law firm for real estate investment, guides Abode2 readers through the latest updates

Now the UK has officially left Europe, is investing in property still a straightforward process?

Yes, it’s still a streamlined process. Although now having the UK outside of the European Union can be a challenge, for UK nationals living in the EU and EU nationals living in the UK. However, the real estate investment process remains one of the few areas where everything is as before.

The main impact as a result of Brexit, has been in relation to freedom of movement and the establishment of UK nationals in EU member countries, including Portugal. However, Brits are still free to travel to Portugal without needing a visa and stay up to 90 days (3 months), every 180days’ period.

Both Portugal and the UK currently have relatively low COVID figures. Do you expect a spike in property investment as a result?

It’s no secret that the pandemic has brought a new set of challenges to the real estate market, namely with potential foreign investors prevented from travelling due to lockdown restrictions.

However, Covid has triggered many other decisions with regards to property investment, with people redesigning their lifestyles and giving due consideration to the importance of owning property in a ‘safe’ country.UK investors have maintained their trust and interest in the Portuguese real estate market. As such, the softening of restrictions will enable a conversion to business-as-usual.

What are the primary differences between the UK and Portuguese conveyancing processes?

The most relevant one is the promissory agreement and associated deposit mechanism laid out in Portuguese law, which isn’t incorporated within the UK’s conveyancing process. The promissory agreement lays out in detail the terms and conditions of the purchase and sale, as well as safeguarding the rights of both parties.

The signing of this agreement entails the payment of anon-refundable deposit (known as a Sinal), a necessary requirement to confirm the transaction and a clear undertaking that both selling and buying parties are committed to the agreed terms and to completing the agreed purchase and sale. As such, Portuguese law lay down severe sanctions for a defaulting party.

What’s the time frame between the promissory agreement and property completion?

It’s directly dependent on the structure and financing of the transaction in question (pure cash or financed purchase), as well as any pre-existing conditions identified at due diligence stage carried out prior to the signing of the contract. On average, a pure cash purchase with no pre-existing conditions can be finalised in one to three weeks upon the signing of a promissory agreement.

If an overseas purchaser buys a holiday home that generates rental income, what are the tax implications?

Very often overseas buyers decide to capitalise their Portuguese real estate investment through various property rental schemes. Whether an investor decides to use a property for short or long-term rental, the income obtained will be subject to taxation in Portugal, meaning that the owners will be obliged to comply with the fiscal obligations and present an annual tax return in Portugal in relation to rental income.

The tax rates and the applicable legal framework will depend on the rental scheme chosen. Taking appropriate legal advice is of course highly recommended.

There are numerous Golden Visa schemes available. What advice would MATLAW give to clients with regards to going through the residency process?

The Golden Visa programme is a more straightforward way of obtaining a Portuguese residence permit, enabling an individual to side-step certain restrictions encountered with the standard residence permit.

The Golden Visa offers the possibility of obtaining a residence permit without changing your tax residency in your country of origin, with a minimum required stay of at least7 days in the first year and of at least 14 days in subsequent years, all the while ensuring access to the Schengen area.

Until the end of the current year, a real estate investment of at least €500K (which can be reduced to €400K in certain parts of the country), carried out in all kinds of properties located in any part of the country, including the Algarve, Lisbon and Oporto will qualify for the Golden Visa. The same applies to the transfer of €1M to a Portuguese bank account.

From January 2022, real estate investments carried out in the coastal areas of the country will only be eligible for Golden Visa if the targets are properties licensed for other purposes than habitation (for example, those located in touristic resorts and licensed accordingly). From January2022, this will be limited to property investments in the country’s interior, Madeira and Azores islands. Also, the transfer of €1M to a Portuguese bank account will be increased in 50% thus a €1.5M transfer will be required.


Algarve (+ 351) 289 356 330

Lisbon (+ 351) 210 434 150


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