Portugal has just updated its citizenship legislation
so it is now possible to apply for a Portuguese passport
after just five years as opposed to the previous six years.
La Vida have a vast property portfolio of qualifying investments,
including a unique selection of renovation options
which qualify for the reduced programme at €350,000.
One of Europe’s oldest countries, Portugal boasts a rich historical and architectural heritage.
Luminosity, radiance and culture beam through the whitewashed villages and lush vineyards
of this country positioned on the blissfully elegant shores of the Atlantic ocean.
WHY CHOOSE PORTUGAL?
Portugal boasts a rich and diverse culture, Mediterranean climate, and a safe and stable setting ideal for raising families, conducting business or travelling. Investors find many opportunities in Portugal’s secure and fast-developing market, including the following:
Residence visa waiver for entering Portugal.
Live and work in Portugal.
Visa-free travel within the Schengen member states.
Permanent residency after five years as a temporary resident.
Citizenship after one year as a permanent resident.
Inclusion of family members, such as spouse or partner, dependent children and dependent parents.
Portugal’s Golden Resident Permit Program is offered in accordance with the Ministry of Foreign Affairs through the Department of Consular Affairs and the Portuguese Trade and Investment Agency (AICEP).
Aimed at attracting foreign direct investments to the country, the program yields a residency permit in Portugal to non-EU investors who fulfill one of the investment options below and meet the following requirements:
Provide proof that investment funds originate from abroad.
Hold no criminal record.
The main applicant’s property is not frozen within the boundaries of the EU.
Pay application and processing fees where applicable.
Enter Portugal for the first time on a valid Schengen visa.
Meet or exceed the minimum stay requirements. (Seven days for the first year, 14 days for subsequent two-year periods.)
1. Property Investment Options
In July 2015, through Act 63/2015 and Regulatory Decree 15-A/2015, the required investment options were revised and new ones added. Investors can now choose from the following:
Applicants may acquire property valued at €500,000 or more, or
Applicants may acquire property valued at €350,000 or more for properties more than 30 years old or located in urban regeneration areas designated for refurbishing, or
Acquisition of property fitting any of the above requirements with 20% reduction on the minimum amount of investment, if purchased on a low density population area (€400,000.00 or €280,000.00).
Our handpicks prestigious projects to meet our clients’ expectations. By investing in fractions of pre-qualified projects applicants become co-owners of the entire project and qualify for Portugal’s Golden Visa. Our selected projects share some key benefits:
Guaranteed annual rental return, starting from the first year of operation;
Easy and flexible exit strategy;
100% funds return guarantee after 5 years;
7 days accommodation per year.
Luxury Hotel Apartments Santos Lisbon
€250,000-€400,000 each. Request our project brochure.
Located in the center of Cascais, facing the ocean and Cidadela, this palatial house rehabilitation of a 20-suite boutique hotel consists of 22 fractions at €350,000 each. Request our project brochure.
Caldas de Canavezes Luxury Hotel and Spa
Located in the heart of Porto, facing the Tâmega River, this luxury hotel and spa transformation consists of 45 fractions at €280,000 each. Request our project brochure.
2. Capital Investment
Applicants may invest a minimum of €350,000 in research activities.
Applicants may invest a minimum of €250,000 in the arts or in the reconstruction or refurbishment of national heritage projects.
Applicants may invest a minimum of €500,000 for shares in investment funds or venture capital.
Applicants must create 10 or more jobs.
The rates of property tax in Portugal vary depending on value and type of property purchased and whether it is to be your main residence or second home. Below are the current rates of property tax in Portugal. These scales apply only to purchases on the mainland.
Different tax rates apply in Madeira and the Azores
IMT Scales(Mainland Portugal)
Please note these scales may be subject to change
Value of Property Transaction% Tax Payable Amount to Deduct
Up to € 92,407 0%
From € 92,407 to €126,403. 2% € 1,848.14
From €126,403 to €172,348. 5% € 5,640.23
From €172,348 to €287,213. 7% € 9,087.19
From €287,213 to €574,323. 8% € 11,959.32
Over €574,323 6%
Value of Property Transaction% Tax Payable Amount to Deduct
Up to € 92,407 0%
From € 92,407 to €126,403. 2% € 924.07
From €126,403 to €172,348. 5% € 4,716.16
From €172,348 to €287,213. 7% € 8,163.12
From €287,213 to €550,836. 8% €11,035.25
Over €550,836. 6%
Value of Property Transaction % Tax Payable
Rustic and Agricultural Plots 5%
Other Property and Urban Plots 6.5%
Offshore in Blacklisted Jurisdictions 10%
Other Portugal Property Taxes and Financial Matters
Stamp Duty and Registrations
When buying a property in Portugal there is also Imposto de Selo (Stamp Duty) on deeds, mortgages and loans to be paid which ranges from 0.4%-0.8% of the purchase cost depending on the type of transaction and the property value. Your laywer will register the property in your name.
Power of Attorney (Procuração)
Many buyers tend to leave their lawyer a signed Power of Attorney with specific powers to sign the Promissory Contract, utility contracts and complete on their behalf. This is easily done again in a Notary's office and takes on average half an hour and currently shouldn't cost more than 50 to 75 euros. This is recommended if you don't have the time to come over regularly to sign and deal with the bureaucratic part of the process.
Inheritance Tax and Wills Inheritance Tax (IH) was abolished in 2004 for spouses, children, grandchildren, parents and grandparents. All other beneficiaries are subject to 10%(IH). Non residents are advised to make a Portuguese Will to make it easier to dispose of your Portuguese property.
Capital Gains Portuguese tax residents receive a 50% exemption before the capital gain is added to the normal income tax scales. To calculate the capital gain tax due, you can deduct all buying and selling costs and any capital improvements on the property in the last 5 years prior to the sale. Non tax residents selling a property in Portugal currently get charged 25% flat rate of capital gains.
Exceptions to Capital Gains You may be exempt from capital gains:
If the property belonged to you prior to 1st January 1989
If you are a tax resident in Portugal and selling your main residence and investing in another main residence in Portugal, as long as the reinvestment is made either less than 2 years prior to the sale or within 3 years subsequent to the sale of the property.
If you are a tax resident in Portugal and sell your main residence in Portugal and reinvest in another main residence within the EU or EEA (as long as there is an exchange of information clause with Portugal regarding tax matters).
Corporate Ownership Corporate ownership can have substantial advantages over direct private ownership if well thought through. Not least in terms of benefiting from stamp duty exemption and reduced capital gains. There are several structures to choose from including offshore structures in white listed countries. There are also other Portuguese company structures benefiting from reduced tax rates.
Please contact Portugal Property Experts for more information on corporate ownership or any aspect of property tax in Portugal
Residency You will be considered a tax resident if you spend 183 or more days in Portugal; this does not need to be consecutive.
Fiscal Representation Non-resident homeowners are required to appoint a Fiscal Representative to ensure that your tax affairs are kept in order. Usually your lawyer will appoint one on your behalf as you need to pay your IMI charge and submit your tax return at the end of the year (which is compulsory under Portuguese law). this shouldn't cost you more than a few hundred euros.
Rental Licenses Many property owners choose to generate extra income from their property by renting it out to holiday makers. If you would like to do so then you must apply for a rental licence (Licença de Alojamento Local or Licença de Utilização Turística) and your property must meet the minimum safety standards set out in the legislation. We can arrange for a specialist local company to manage this process for you including gathering all the documentation, organising the inspections required and providing any additional safety equipment.
Tax on Property Rental Income Non-residents generating income from property pay a 15% flat rate income tax and you must declare it in your annual income tax declaration (IRS form).
Bank Accounts It is recommended that you open a Portuguese bank account to pay bills, taxes etc. Again your lawyer should be able to help you with this. Documents usually required for EU citizens are: passport/or identity card, residency card (if applicable), tax number and card (fiscal number) and a proof of residence such as a utility bill or driving licence and for non-EU citizens: a passport and another valid document proving identity with a colour photo, proof of home address in country of origin, tax card (fiscal number) and proof of profession/contract of employment and company details.
Currency Exchange There are now numerous companies that provide a free foreign exchange service. The rates offered by these companies are very competitive and if you are transferring funds from outside the eurozone they can often save you thousands on your home in the sun. This is usually quite a straightforward operation and it shouldn't take more than 3 to 5 working days to transfer your money from your local bank account to your Portuguese account. Please contact Portugal Property Experts for recommendations of reliable and competitive foreign exchange companies.
IMI This is similar to Council Tax and is based on the rateable value of your property not the real value. The rateable value for urban property is lower than the real market value and is based on a percentage scale ranging from 0.3% to 0.8% depending on the age of the property and the Municipal Council Area your property's in, size, level of luxury and a few other factors. For properties with a rateable value of over €1,000,000 the rate is 1%. Property in offshore blacklisted jurisdictions pay a 7.5% flat rate.
Condominium Charges If your property is in a gated complex, genertally there is a yearly condominium charge for the upkeep of green areas, pool, repairs etc.
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