Buy Property in the Algarve: Complete Checklist

Six times voted the best European beach destination, the Algarve is a true oasis for tourists visiting Portugal. Every year, between March and September, the Algarve’s cities receive hundreds of thousands of visitors from all over the world. However, more than a tourist destination, the Algarve has become an excellent option for those wishing to buy a house in Portugal.

Faro, Vilamoura and Albufeira appear as the main options for those who want to buy a villa in the Algarve. Apart from the blue ocean, golden sandy beaches and an extensive summer, the Algarve is also notable for the large number of luxury offers, both in tourist experiences and opportunities in the real estate market.

Golden Triangle: The Luxury of Algarve

The more you research on real estate investments in the Algarve, the more you will discover the secrets of one of the regions with the most sunny days in Portugal. There are innumerable nooks that leave any visitor enchanted, with eyes to shine.

Among these areas, it is essential to highlight the Golden Triangle. The curious name covers the areas of Quinta do Lago, Vale do Lobo, Vilamoura and the surrounding areas.

Over a long period, the Golden Triangle was side-lined due to higher prices when compared to other Algarve regions. But in recent years, it has become the right place to buy a home, whether to invest or to live.

There are some elements that make the Golden Triangle such a special region. Starting with the security it offers and very well maintained roads. In addition, those who live or stay there have miles of cycle paths, palm-lined streets and vegetation that join the scenery of stunning houses.

Discovering the Algarve as a destination to buy home is a journey of positive surprises, with breathtaking landscapes and properties to match all the natural beauty.In this article, you will get to know a complete checklist that you must follow before buying housing in the Algarve. Follow this list and use it as a guide before making your investment in Portugal.

Before Buying a Home in the Algarve

In order to facilitate the understanding of the steps that you must follow, we divide the content between the different phases that contemplate the purchase of a house. The first step is the evaluation of the family budget. It is essential that all expenses and charges are analysed, since only then is it possible to understand what is the real value available for the investment. If you would like to have a better understanding about the purchasing taxes and legal expenses, check our article about Property Taxes in Portugal.

Evaluating the budget is an indispensable step for anyone considering buying a home, as well as understanding how issues such as the necessary credit, payment method and all other aspects that will impact the purchase.

Foreign Investment in the Algarve

For investors who do not have a Portuguese nationality, there are some steps that must also be taken in this initial phase. One of these points is the Tax Identification Number (NIF). This document is necessary for anyone who will buy a house in Portugal, regardless of the region, besides allowing actions such as opening a bank account.

The Residence Permit for Investment (ARI) or Gold Visas as it is known, is also much sought after by foreign investors. The visa guarantees temporary residence in the first five years for those who invest in properties with a value equal to or above 500.000 Euros. (Portugal Golden Visa Residence Permit Article)

The Choice of Property

After financial analysis and budgeting possibilities, it’s time to start choosing the property. There are numerous points that should be taken into consideration when choosing a home to buy.

Location

There is no doubt that the place where you will buy house will have direct impact on your satisfaction with the investment. For those who are thinking of investing in a home to live, there are different aspects to consider:

  • Location in relation to services and commerce, such as supermarket, health centres, pharmacies and restaurants ;
  • In the case of families with children, it is important to check which school is closest;
  • Proximity of work.

When buying a property in the Algarve as an investment, the proximity to the beach or golf courses are points that will make all the difference in the monetization of the house. Also, it is important to think about the leisure facilities that the property offers. Pool and a nice garden can be, for example, the deciding factor for the rental of a holiday home.

If you are not familiar with the central Algarve and more specifically with the Golden Triangle, we will be more than happy to tour you around and show you the features of each area. We do believe that this is the most important factor when buying a property. Finding your dream property in a location where you will feel comfortable, integrated and happy should be your and your agent’s ultimate goal. Do not hesitate to contact us shall you need assistance on this matter.

New or Used?

The choice between these two options should be one of the first aspects to be considered. New homes tend to have higher costs. In turn, the used ones may require investment in renovations and arrangements that directly impact the final real value. On the other hand, you will have a much larger choice if you decide to go for a used home.

Property Typology

The number of bedrooms, suites and bathrooms should also be thought of before beginning the search for a property. If you are going to buy a house to live with the family, the choice will be made from the need of it. If you are going to buy a house in the Algarve as an investment, it is important to know which is the best option: whether to rent to tourists or to the residents of the region or to resell in the future.

The Visit to Buy Home

Once you have defined the location, typology and all aspects relevant to you, it becomes simpler to select the properties that will be incorporated into your list of interests. With the selection in hand it is time to start the visits to the properties.

Before booking your flights, make sure you have informed your agent of the selection of properties. It is important that your agent can guarantee all the visits and make sure the properties are available. Especially during high season it can be very difficult as some of your chosen properties might be rented making it problematic to ensure a viewing.

four chairs and table by the pool overlooking an amazing landscape

The visit is a moment of great importance to the success of home buying. It is at this time that those who are thinking about investing should take into account all the structural, functional components and details, such as:

  • Construction Materials;
  • Finishes;
  • Natural brightness;
  • Solar orientation;
  • Position and Views;
  • Thermal insulation;
  • Electrical installations, gas and water.

One precious tip is to be aware of positive and negative elements before making a decision .

Buy a House in the Algarve: The moment of signing the contract

Finally you have found the house you were looking for. The property is within the planned budget and the technical visit has been made in recent weeks. With your real estate agent you can enter the bidding process. After having agreed a sales price for the property it is now time to sign the contract between the parties.

Once again, there are steps that must be followed in order for the purchase to be a successful investment.

Assinatura de contrato de compra de casa

It is essential that you make an appointment with a local solicitor who will check all documentation and paperwork relating to the property. They will consult with the Land Registry Office to check if the property has any debts which could ultimately fall on you.

When all documentation checks out, a promissory contract will be drafted outlining the terms & conditions. Feel free to read our article about all the legal steps for buying a property in Portugal.

Documents and Taxes

The Land Registry is the body responsible for the provisional registration of the transfer of the property in its favour, as well as the mortgage in favour of the bank. The provisional documents shall be valid for six months from the date of their formalization.

Whenever there is a change of owners of a property and this involves a financial exchange, it is necessary to pay the Real Estate Tax (IMT). The proof of it being delivered already in the execution of the public deed, which in turn is the most important document of the entire transaction.

The public deed is the definitive contract of purchase and sale of the property. In order for the transaction to be signed on a permanent basis, the following documents must be in possession: certificate of the contents of the property description and the mortgage loan document (if applicable); certified copy of applications for provisional registrations; updated building permit; license to use the property; IMT settlement statement; technical file of housing. Finally, it is necessary to convert the provisional registers into definitive ones.

The Final Stage

If you are thinking of buying a villa in the Algarve, or any other region of Portugal, you are likely to think that this can be a complex process. Despite the many steps, if done with care and attention and with the support of an experienced and serious real estate company, this will be an unforgettable moment in your life.

Receiving the keys for your property is an exciting time. And, as you get to know the Algarve even more, you will quickly realize that you have made the best decision. On our Your Luxury Property blog you will find more tips on buying a home and investing in the Algarve. For any doubts, more information or if you would like to start the dream house “hunting”, do not hesitate to contact us