Introduction
Buying property in Portugal can be a long drawn out affair but the system does work providing you stick to the rules and follow a few common sense guidelines.
The Euro has strengthened against the US Dollar in 2003, which makes it a less attractive currency to purchase property in when funds or income are USD related.

Location
The Portuguese economy contracted in 2003 with lower domestic demand due to high unemployment. However, the forecasts for 2004 to 2006 are more optimistic. The Portuguese cost of living is becoming more expensive although general goods are cheaper than in other EU countries however some luxury and imported goods are relatively expensive.

Real Estate prices
From around £20,000 / $30,000 for older inland properties.
Approximately around £35,000 / $50,000 for a small apartments.
Approximately around £60,000 / $87,000 for a larger apartments.
Villas will generally cost from £80,000 / $115,000.
Golf complex property luxury villas approaching £200,000 / $300,000 and beyond.

Living Cost
Portugal is becoming more expensive to live in although general goods are cheaper than in other EU countries but some luxury and imported goods are quite extensive.

Buying Real States
When you have found your property, the Vendor or their legal representative will obtain a certificate from the local Land Registry confirming that the property is available to sell. This document will need to be produced to the Notary at the time of signing the contracts. The services of a government-licensed estate reveal to be helpful in these matters. If the full purchase price is being paid immediately, a purchase contract price and date of completion. At the time of signing the contract, the Purchaser will pay a deposit usually about 10% of the agreed purchase price. If the purchaser should withdraw from the contract, this deposit will be forfeited, whilst if the vendor should withdraw, they will be obliged to forfeit double the value of the deposit.

Lawyers
The conveyance (Escritura) will check that any searches and other requirements have been carried out, funds prepared and both parties can agree to a completion time. The transfer of the title will then be prepared and will be signed by both parties or by their solicitor/lawyers in the presence of a Notary. The balance of the purchase can be handed over.

Fees / Cost involved in buying property
The overall costs including Solicitor/Notary fees, Transfer Tax (SISA) equate to 15% of the purchase price. ´SISA´ tax (Portugal’s version of Stamp Duty) is 10%, however, the first €58,360 of the registered purchase price is exempt followed by a sliding scale up to €148,150, any value above that is charged at the full rate. SISA tax is payable prior to completion of the purchase. Often property is not registered at the buying price, which can reduce the SISA exposure. A certificate (Escritura) from the local Land Registry confirming that the property is available to sell is mandatory. A 10% deposit is required which is non-refundable in the event that the buyer fails to proceed.

Tax
You will be considered a Portuguese resident for tax purposes if you spend more than 183 days out of any tax year in Portugal, or you have a home in Portugal, which you intend to maintain as a permanent residence on 31st December of any year. Property Transfer Tax (SISA) is payable when the registered owner of the property changes in Portugal. However, if buying through an offshore company, you will not have to change the name of the tax, making the purchase more attractive to another buyer of the registered owner of the property and avoid the tax, making the purchase more attractive to another buyer realized sale price. Over 1% per year will be paid for municipal tax.

Mortgages
If the purchase is to be made with a mortgage, securing the loan against a property owned elsewhere i.e. the UK may be quicker and easier, the legal fees should be lower and it could be less expensive to redeem. Portuguese banks will only lend to permanent residents and offshore banks will only usually finance 65% of the property maximum term is 20 years.

Paperwork
Anyone wishing to settle permanently here must apply for a residence permit from the nearest office of the Portuguese Immigration Service. An initial five-year permit is issued, which is then renewable for 10 years

Capital gains Tax
If property is purchased through an offshore company then any change of ownership will not be acknowledged by the Portuguese authorities and any rate of capital gains tax applicable will be avoided. Otherwise Capital Gains will be a maximum of 24% on property bought since 1989.

Purchase Price in Associated Taxes and Fees.
It is usually more expensive to buy property in coastal resorts and. However the range varies from small apartments starting at Euros 60,000 to luxury villas in excess of Euros 360,000

Snippets
• The Algarve, in the South is by far the most popular region with choices of purpose built complexes and luxury    golf property which always have a wide appeal for holiday homes and rentals.
• Older inland properties usually in need of renovation: Euros 36,000 upward. Small apartments: Euros 60,000    upwards. 2 to 3 bedroom apartments: Euros 105,000 upward. Villas will generally cost from Euros 140,000.
• Golf complex property will be more expensive with luxury villas approaching Euros 360,000 and beyond
• Properties are generally slightly higher than in Spain.