Buyer´s Handbook by maprorealestate

BUYER’S HANDBOOK

Welcome!

Buying a property can represent a major decision, both ﬁnancially and emotionally.

Our Buyer´s Handbook guides you through a step by step process, with information to ensure you make a conﬁdent and deﬁnitive decision.

Requirements Running Costs Non Habitual Resident (NHR)

The ﬁrst edition of Mapro´s lifestyle magazine. The Scene. Your handbook to life in the Algarve and your guide to the local property market with expert advice.

DISCLAIMER Before purchasing your property, we encourage you to ﬁnd out about the process and costs involved in the purchase. Choose a good lawyer. A lawyer with experience in this area will check the ownership of the property, taxation history and registered deeds, at the same time that an independent inspector analyzes the condition of the property.

SUZANA BENTO MAPRO | KNIGHT FRANK

Our Story

Mapro Real Estate began in 1992, initially as a management and rental company until the new partnership was formed in 1999 and the real

The abandoned area whose licensing had expired, needed reigniting, planning and licensing with the local council along with

Having sold nearly all 45 plots of the ﬁrst phase in the ﬁrst year, the exchange of owners buying into Quinta Verde and selling their properties in Quinta do Lago, Vale do Lobo and the surrounding areas, connected Mapro, and our client base grew from strength to strength. Mapro’s involvement in Quinta Verde set a ground-breaking milestone.

This established recognition and credibility, as one of the most experienced and stable agents in today’s market. Mapro has grown organically over the years and we are now excited to learn, grow and deliver as an oﬃcial Knight Frank co-branded associate.

We believe you deserve the personal attention and professional expertise that we have become known for. We are a fully licensed Portuguese agent with over 30 years of local knowledge and experience in the market. Whether buying or selling, our goal is to deliver yours, by providing a straight forward, simple and stress free experience.

"A company’s success hinges on the excellence of its team members."

SAM REMUS

SUZANA BENTO

SANDRA NEVES

FRED MACIEIRA FILIPA SILVA

Buying Process

1 ST STEP BE INFORMED

Before buying your property, make sure you understand the process and the costs involved. Appoint a good lawyer. An experienced local lawyer will check the property’s ownership status, taxation history and deeds before drawing up the purchase contract, while an independent surveyor can inspect the property, once a full agreement is in place between all parties.

2 ND STEP CONDITIONS OF SALE

In addition to agreeing a value for the purchase of property, it is important to agree an outline of the terms and conditions with the seller.

3 RD STEP PREPARE YOUR DOCUMENTS

In addition to your formal identiﬁcation, you will require a Portuguese Fiscal number to purchase property in Portugal, while your residency status and whether the property is your main or secondary residency, will determine the amount of purchase tax (IMT) you will have to pay. Copies of these documents, proof of your primary residential address and proof of employment, will be required by the agent dealing with your purchase in compliance with the anti-money laundering regulation. A KYC will need to be duly ﬁlled in and signed by you.

4 TH STEP PROMISSORY CONTRACT

After the bill of good standing has been checked and validated, the terms and conditions will then be drawn up on contract. Normally, a deposit of 10% is exchanged at signing of the promissory and the diﬀerence paid at the deed/exchange of ﬁnal contract. If the buyer defaults, they will lose their deposit. If the seller defaults, then the buyer must be compensated for double the deposit paid.

5 TH STEP FINAL DEED

The deed takes place at a public notary or a local land registry oﬃce. A third option is now available, which is through a private authenticated document to be prepared by a lawyer. Payment of the purchase tax (IMT) will be required before signing the ﬁnal contract. Once completed, the contract will be registered under your rightful ownership.

Purchase Costs

STAMP DUTY

Stamp duty is paid by the buyer and levied at a rate of 0.8% of the deed value.

NOTARY FEES

Notaries have a minimum fee outlined by law, but in addition the full fee is calculated on a sliding scale subject to the value of the property purchase.

REGISTRATION FEES

Registration of the property purchase in the Land registry oﬃce costs €250.

LAWYERS FEES

Lawyers' fees are generally around 1% + VAT of the agreed property purchase price.

SURVEYORS FEES

Surveyors fees will depend on the size and nature of the property, along with the extent of the survey carried out. Fees start at around €1000 + VAT

PURCHASE

TAX (IMT) FOR A PRIMARY RESIDENCE

PROPERTY

The Property Purchase Tax is levied on the buyer before signing the ﬁnal deeds.

Properties bought for less than €633.453 are taxed on a scale from 2% to 8%, oﬀset by a ﬁxed deductible value.

Properties sold between €633.453 up to €1.102.920 are subject to a ﬂat rate of 6% for a secondary property.

Property over €1.102.920 will be subject to 7.5% purchase tax.

Urban building plots are subject to a rate of 6.5%.

Rustic plots are subject to a rate of 5%.

Property with a touristic habitation license will pay 6.5% IMT.

In the event that a property is bought for less than the rateable value, the IMT will be taxed on the higher value (i.e. the rateable value).

The ﬂat rate charge at 6% for a secondary residence starts slightly lower at €607.528, and increases to 7,5% at €1.102.920.

If you are under 35 years of age and buying a property as your primary residence, you qualify for IMT exemption.

APPLICABLE IN 2024

CONTINENTAL PORTUGAL: PRIMARY RESIDENCE Up to € 101.917

From € 101.917 to € 139.412

From € 139.412 to € 190.086

From € 190.086 to € 316.772

From € 316.772 to € 633.453

From € 633.453 to € 1.102.920 € 2.038,34 € 6.220,70 € 10.022,42 € 13.190,14

*Properties up to €101.917 are exempt from IMT (APEMIP, 2024)

APPLICABLE IN 2024

CONTINENTAL PORTUGAL: SECONDARY RESIDENCE Up to € 101.917

From € 101.917 to € 139.412

From € 139.412 to € 190.086

From € 190.086 to € 316.772

From € 316.772 to € 607.528

From € 607.528 to € 1.102.920 € 1.019,17 € 5.201,53 € 9.003,25 € 12.170,97

*Properties up to €101.917 are exempt from IMT (APEMIP, 2024)

Company Purchase

THE BUYING PROCESS

The buying process for a property held in a company, is not dissimilar to a standard purchase process of a privately owned property. In addition to running the local checks on the title of the property, a thorough due diligence will be carried out by your lawyer to include the history of the company, its activities and accounts, along with warranties and liabilities.

Once a full bill of health is approved, your lawyer will draw up the Share Purchase Agreement also referred to as the Share Transfer Agreement. A minimum deposit of 10% is usually paid, with a set deadline on the completion date, whereby the outstanding balance is exchanged. The management company handling the corporate structure will then transfer the share ownership to the new beneﬁciaries.

Your agent will require copies of your full identiﬁcation, your Portuguese ﬁscal number (*), proof of your primary residential address and proof of employment, in compliance with the anti-money laundering regulation. (*) This may not always be mandatory in a non-resident company purchase.

Company structures are held in various jurisdictions, such as Malta and Delaware being the more common. Recently we have also experienced more Portuguese company structures too. It is compulsory to fully declare all beneficial owners. Company transactions are completely transparent and frequently used in estate planning or asset management. Beneficiaries must be registered on the official Ultimate Beneficiary Declaration list.

THE BUYING COSTS

Legal and property survey fees are similar to purchasing a privately owned property.

Non-resident companies are exempt from the Purchase Tax (IMT) and Stamp Duty. For Portuguese companies, the IMT is only exempt if one beneﬁciary does not own more than 75% of the shares. In this event Stamp duty is also exempt. Husband and wife do not qualify as separate shareholders.

Wealth Management will be determined by the scale of the service.

Mandatory Requirements

KNOW YOUR CLIENT (KYC)

Once a full bill of health is approved, your lawyer will draw up the Share Purchase Agreement also referred to as the Share Transfer Agreement. A 10% deposit is paid at promissory with a set deadline on the completion date, whereby the outstanding balance is exchanged. The management company handling the corporate structure will then transfer the share ownership to the new beneﬁciaries.

Running Costs

COUNCIL TAX | IMI

The Municipal Property Tax (IMI) is an annual cost levied on all properties. This payment is made in arrears, 2 or 3 times a year, depending on the amount due. The IMI rates vary from council to council and property to property. A rateable value (VPT) is attributed to property by authorities using coefficients including the year of build, construction area, location and amenities – the tax applied to the rateable value (VPT) of the property is usually between 0.2% and 0.5%. Within the Loulé Council, the current rate is 0.3% for urban properties, 0.8% for rural properties. Properties held in white listed companies have a flat rate of 0.4%, while properties owned in blacklisted jurisdiction, identified by the Portuguese authorities are subject to a IMI rate of 7.5%. Some exemptions can apply if the property is bought as a primary residence.

Taxable Value of the Property

VC

x A x CA x CI x CQ x CV

Value of the build per square meter ﬁxed by the authorities

Gross build area

Registered use of the property, for example commercial or residential.

Location of the property whose coeﬃcient is ﬁxed every three years by the municipalaty and can vary between 0,4 to 3,5

Quality and comfort indicators that increase or decrease the value and take into consideration the number of ﬂoors a property has, a swimming pool on the property and even the existence of an elevator

Determines the age of the property, the more recent the build the higher the coeﬃcient

Running Costs

COUNCIL TAX | AIMI

The AlMI is an additional municipal tax introduced in 2017, levied on residential property and urban plots.

The rate is applied to rateable values (VPT) over €600.000 per person. 0.7% is only levied on the VPT which is greater than €600.000 but less than €1.000.000.

1% is applied between €1.000.000 - €2.000.000. Over €2.000.000 – 1.5% is applied. The additional tax will only apply to the excess levels.

Some exemptions can apply if the property is bought as a primary residence.

Properties held in white listed companies have a ﬂat rate of 0.4% on the full rateable value.

Properties owned in blacklisted jurisdiction, identiﬁed by the Portuguese authorities are subject to a IMI rate at 7.5% on the full rateable value.

EXAMPLE

An individual owning a property with a rateable value of € 550,000 will be exempt of the AlMI, and only the standard IMI of 0.3% on the VPT will be applied.

An individual owning a property with a rateable value of € 850.000 will be charged as follows:

| € 850,000 - € 600,000 = € 250,000 x 0.7% = € 1,750 of AIMI

A property owned by more than one individual will have the beneﬁt of the € 600.000 deduction for each named owner.

EXAMPLE

If Jane and John Smith own a property together whose VPT is € 1.200.000, they will be exempt from AIMI. Only the IMI rate of 0.3% must be paid on the taxed asset value.

Running Costs

ESTIMATED RUNNING COSTS PER YEAR OF A 4 BEDROOM VILLA

IMI/AIMI

RESORT MEMBERSHIP CLEANING SERVICES

GARDEN MAINTENANCE

POOL MAINTENANCE

ELECTRICITY

GAS WATER

SECURITY / ALARM SERVICE

INTERNET

CABLE TV

Non Habitual Resident (NHR)

The Non-Habitual Resident program was ﬁrst announced in 2009, and granted over 30.000 individuals to beneﬁt from this tax incentive, with the exceptional tax rate of 20% for 10 years requiring a minimum stay of 183 days. After undergoing various reforms, the program ended last year with a transition phase to carry through in 2024.

ELIGIBILITY CRITERIA FOR THE TRANSITIONAL PHASE

To qualify under the transitional rules, you must meet one of the following criteria:

Portuguese Tax Resident Status by 31st December 2023; You must be a tax resident in Portugal as of 31st December 2023.

Portuguese Resident Status by 31st December 2024:

Work Contract/Agreement: A work contract or agreement dated before 31st December 2023, with duties performed in Portugal;

Property Lease: A property lease signed before 10th October 2023;

Promissory Contract: A promissory contract for Portuguese property signed before 10th October 2023;

Dependant’s Education: Enrolment of a dependant in an educational institution in Portugal by 10th October 2023;

Residence Visa/Permit: A residence visa or permit valid until 31st December 2023;

Initiated Visa/Residence Process: Initiation of the visa or residence permit process before 31st December 2023.

Non Habitual Resident (NHR)

BENEFITS OF NHR STATUS

If you qualify and decide to apply for NHR status, you can enjoy signiﬁcant tax advantages, including:

0% Tax on Certain Foreign Source Income and Capital Gains: Certain types of foreign-sourced income and capital gains are not subject to Portuguese tax.

10% Tax on Foreign Pension Income: Foreign pension income is taxed at a reduced rate of 10%.

Lower Employment and Self-Employment Tax Rates: Reduced tax rates for employment and self-employment income derived from “high value activities.”

NEXT STEPS

If you are eligible under the transitional rules and are considering applying for NHR status, it may be beneﬁcial to consult with a tax advisor or legal expert to navigate the application process and maximize the beneﬁts available.

NON HABITUAL RESIDENT (NHR) 2.0

Government in discussion.

Residency Visas

GOLDEN VISA

Since the introduction of Golden Visa in October 2012, the government have granted over 12.500 Golden Visa Permits of which just over 11.300 has been through acquiring real estate. The permit allows foreign nationals outside the EU to reside in Portugal and circulate within the Schengen countries without a visa for short periods. However on July 19th, 2023 the Portuguese parliament approved the final version of the “More Housing” bill that significantly impacts the Golden Visa program. It will no longer be possible to attain a Golden Visa through the acquisition of real estate, a real estate related investment fund or a capital transfer of €1.500.000. However the other options still maintain: The creation of 10 jobs; Minimum capital transfer of €500.000 in a qualifying venture capital fund (not real estate related), the same minimum amount for research activities conducted by public or private scientific research institutions, or forming a commercial company based on national territory with the creation of 5 permanent jobs.

D2 VISA – ENTREPRENEURIAL VISA

Golden Visa applications and future renewals will be diverted to the D2 visa, commonly known as the entrepreneurial permit. Entrepreneurs may apply for the D2 Visa if they start or buy a business in Portugal with no restriction on the activity. This will allow the applicant to get a residence permit and all its benefits including visa-free travel to other Schengen territories. There is no limited investment threshold currently defined for the D2 Visa, although applicants must provide proof of sufficient funds to start and run their business in addition to owning or renting a property, health insurance will also be mandatory. Applicants must be over 18 years old with no criminal record. The visa validity is for four months in which time the applicant must enter Portugal in order to enable them to start their company and sort out their housing in order to apply for a residency permit. The residency permit is valid for two years and can then be renewed for three years. After five years, citizenship or permanent residence may be applied for. Family members may immigrate to Portugal with a residence permit for family reunification, however the entrepreneur and their family members must stay in Portugal for a minimum of 6 months a year.

HQA (HIGHLY QUALIFIED ACTIVITY) VISA

The HQA visa is more commonly known as the Hybrid start up visa. This program is aimed at residency visas intended for highly skilled professionals willing to work in Portugal. It is designed to fast track and prioritise residency for business professionals, SME´s, entrepreneurs and innovators. The applicant must provide a higher education certiﬁcate, proof of work agreement or written guarantee from the Portuguese employer for a minimum term of one year and gross monthly salary must exceed €1.330 per month. A clear criminal record and mandatory health insurance is also required. The residency permit will be valid for two years and then can be extended for a further three years before permanent residency/citizenship can be applied for.

Residency Visas

D7 VISA – RETIREMENT OR/PASSIVE INCOME VISA

Introduced in 2007, the D7 Visa is more commonly known as the “retirement visa” or “passive income visa”. This visa program allows non EU, EEA and Swiss citizens to apply for temporary residency in Portugal conditioned on the applicant proving a regular passive income derived from either a pension, rentals, dividends or ﬁnancial investment application of a minimum €9.120 per year, which should increase by a further 50% for your spouse and a further 30% for a child, a clean criminal record, proof of owning or renting a property long term. Spend a minimum of 16 months in Portugal during the ﬁrst two year period of application (Minimum six consecutive months or eight months non-consecutive, each year). The applicant is advised to open a Portuguese bank account with a deposit of one year of the minimum passive income and secure mandatory health insurance. Upon approval the applicant is issued with a residency card valid for two years and then renewable for a further three years, after which citizenship may be acquired.

D8 VISA DIGITAL NOMAD VISA

Introduced in 2022, the D8 visa is more commonly known as the Digital Nomad Visa or temporary visa as it deﬁnes the applicant as 100% remote worker. There are two possibilities for this visa: Either as a freelancer or self-employed business with the application for the visa for a period of 1 year with an option to extend for six months. The requirement is to prove a stable income of 3.040€ per month with minimum savings of 9.120€ if you apply with a dependent spouse/partner. Proof of tax residency outside of Portugal. Clear criminal record. Health insurance is mandatory. Alternatively an entry stamp visa may be granted which will be valid for four months and allow two entries to Portuguese territory, during this time a residency permit should be applied for which is valid for two years and renewable for a further three years before Citizenship may be considered. The requirements are the same; proof of minimum stable income 3.040€ per month plus the 9.120€ in a Portuguese bank account. Proof of tax residency outside Portugal. Clear criminal record. Health insurance is mandatory.

Testimonials

S.N. BUYER IN VILAMOURA

We had the absolute pleasure of working with Sam on the purchase of a property just outside Vilamoura. Sam went above and beyond for us throughout the entire process. We live overseas and were new to purchasing in Portugal and he helped with recommendations, advice, viewings and so much more. If you’re looking for someone who will work hard for you, choose Sam! 6 star agent!

K.N. BUYER IN VALE DO LOBO

We began our search for a property in Portugal at the start of 2022. We met several agents and looked at various properties but when we met Sam Remus from Mapro back in May, we knew he was the man. We looked intrinsically during the summer and sure enough he found us the right property. The service he gave and his attention to make the whole process run smoothly, was second to non. Thank you to Sam and Mapro for making our dream come true.

F.C. BUYER IN QUINTA VERDE

We have purchase two diﬀerent properties with Sandra over the years and have always received a friendly, informative and professional service. She is extremely helpful with all matters relating to viewings and purchasing properties. She is extremely knowledgeable and we would highly recommend her.

G.H. BUYER IN THE GOLDEN TRIANGLE AREA

Our UK company Heywood Real Estate and Knight Frank have a longstanding relationship and when we asked them to recommend an estate agent on the Algarve, they did not hesitate in putting us in touch with Mapro. My wife and I have had contact with many local agents over a period of time and can conﬁdently say that Mapro are head and shoulders above the other agents we have dealt with. Like Knight Frank we would not hesitate to recommend them, they are particularly eﬃcient, helpful and willing to go the extra mile.

Edifício Mapro Av. Alm. Mendes Cabeçadas 8135-106 Almancil · Algarve · Portugal

CHAMADA PARA A REDE FIXA NACIONAL LANDLINE

info@maprorealestate com

T (+351) 289 390 880 www.maprorealestate.com

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