Buying Property in Portugal as a Canadian
If your dream is to retire to Europe or have a holiday home there, buying a property in Portugal will be ideal. Foreigners like Portugal for its friendly community and the beautiful coast, not to forget the affordable lifestyle.
While Portugal has fewer rules for foreigners buying land there, the purchasing process is more complicated than in Canada. First, Canadians struggle with the language barrier in this state. Also, before purchasing a property, you must have all the requirements, including a Portuguese tax number and qualifications for a mortgage.
Is Buying Property In Portugal Easy?
Buying property in Portugal is easy for foreigners because there are no restrictions. However, the buying process can be challenging for Canadians who live over 4200 miles apart.
Before you commit to a beautiful house on sale online, ensure you see it in person first. Then, you can plan a trip to Portugal to view the property and hire a realtor to help you with the inspection.
The language barrier is a significant challenge that Canadian homebuyers face when acquiring property in Portugal. Portugal citizens speak Portuguese, which is less common than French and English, the two main languages in Canada.
Since understanding the seller could be difficult, consider hiring a Portuguese lawyer to help you with purchasing.
The other significant requirement to buy property in Portugal as a foreigner is a Portuguese tax number (numero de contribute or NIF). You will apply for this at a local tax office for a small fee.
The next thing to check is your qualifications for a mortgage. Non-Portugal citizens get 70 percent of the property’s value, while Canada gives its citizens 80 percent. Therefore, you must have the other 30 percent to complete your payments.
You must also have a copy of your passport, the NIF number, a good credit report, and proof of address to apply for a mortgage. In addition, the bank will ask for your recent bank statements and a copy of the tenancy agreement.
Other Requirements to Buy Property in Portugal
Your Portugal property buying preparations do not end at getting the NIF number and applying for a mortgage. Other important information to know as an interested buyer is;
Once you get a lawyer to lead you when purchasing your property in Portugal, ask them about the IMF transfer tax and other fees. There is no fixed amount of tax. Some foreign buyers pay up to 10 percent of the property value in a tax haven, while those buying cheap property or second-hand houses don’t pay a penny.
Other taxes you will pay are Property transfer tax, locally known as Imposto Municipal Sobre Transmissões (IMT). The value depends on the value of the property. Second-hand home buyers pay more than those buying a new house.
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Land Registry and the Notary Fees
The property seller and buyer pay this fee. It varies with the property you buy. Some buyers pay about 0.2 percent, while others produce as high as 1.2 percent of the total property value.
The other necessary documents to have when purchasing property in Portugal are the Contrato-Promessa De Compra e Venda (CPCV), the property’s energy certificate, the Land register, and Payment of the stamp (Imposto de Selo).
Benefits of Buying Property in Portugal as a Canadian
Canadians buy properties in Portugal because of various reasons.
- First, Portugal’s lifestyle is cheaper than Canada’s, making it a choice for most retirees. Second, Portugal’s affordable lifestyle is due to its steady economy.
- Property in Portugal is cheaper than in Canada. Canadian houses are expensive to buy, and the rent is also higher. Non-Portugal citizens owning property in the country can also easily invest and benefit from the steady market growth.
- You can rent your houses out if you don’t want to live in Portugal. They become
financial investments that earn you income. You will get more revenue during the peak tourism seasons like summer.
- Canadian citizens who buy property in Portugal become eligible for the Portuguese Golden Visa. Besides, owning a house in the country could earn citizenship after living there for six years.
- Portugal offers high-quality education compared to most countries. If you have toddlers or are a scholar, it is an ideal country to move into for studies. You will also access better healthcare services.
Pitfalls to Avoid When Buying Property in Portugal
Most Canadian property buyers in Portugal are excited about owning new houses and lands. Unfortunately, they forget to be keen and do their due diligence to avoid scamming. Although there are few crime rates in Portugal, there are e-transfer fraudsters, and you could fall victim.
To be safer, ensure you hire registered and licensed real estate agents. They should register with Associação de Mediadores Imobiliários, which registers all agents. Ensure you also check their license number.
Cost of Buying a Property in Portugal
Buying property in Portugal is cheaper than in other countries. The average cost of property per square meter is €2950. Therefore, if you want the Portugal Golden Visa, your minimum spending should be €280000.
However, note that depending on your money transfer method, you could pay more. Also, if you don’t have a bank account in Portugal, you will incur some currency exchange rates.
Homebuyers should consider using Knightsbridge FX to exchange currencies. You will get better exchange rates than when using banks and ATMs. However, homes near the coast are more expensive. They cost up to €1000000.
Places To Buy Property in Portugal
Once you know all the requirements to acquire property in Portugal as a Canadian, you can start identifying the best places to live. Where you choose depends on the reason you are purchasing the house. Some of the best places to consider in Portugal are;
Lisbon is a typical city for investors and expats. It houses many companies and startups and is rapidly growing. In addition, Lisbon’s economic growth has attracted many property buyers, increasing the value of the real estate.
You can find cheaper property in Lisbon as you move farther away from the city. You can live in Amadora, Benfica or Cascais. Although these towns are away from the city, the houses are more affordable, and Lisbon is a 30-minute drive.
Porto is a familiar city choice for Canadians buying property in Portugal. The town looks over the Atlantic, making it a perfect place to build tourist hotels. A mixture of history and urbanism also attracts tourists to the area.
Porto is mainly preferred by property buyers looking for investment property. You can choose a property in the Foz Douro or Ribeira neighborhood.
Another place to get beautiful beaches and homes along the coastline is on the Silver Coast. This area is ideal for commercial properties like tourist hotels and beachfront apartments.
Final Words
Buying a property in Portugal as a Canadian is easy, but you must know the essential requirements. For example, you must have a NIF number and pay the necessary taxes. In addition, the buying process can take longer and get more complicated when doing it alone, so it is advisable to get a registered lawyer to help.