Q&A on Buying Property in Comporta
How is the real estate market in Comporta?
Excluding the effects of Covid-19 which are unknown at this time.
May 2020 – Property in Comporta, Portugal is currently a strong asset with sustained values over the last five years averaging around twelve percent per annum. That’s not to say that property values have not increased at a higher-rate, as the facts on the ground prove that due to the demand, some pockets of real estate in Comporta has doubled in price and in some particular instances has risen even higher.
Areas that have seen a 100% increase in value (Certain properties and estates) have been Brejos da Carregueira de Baixo, Muda and some properties in Melides which is a more mountainous area twenty minutes south of Pego Beach.
Is the real estate market secure?
Comporta offers a well-established property market with legal registration of all properties and owners within the land registry database and prior to closing your property transaction, the Notary is legally obliged to ensure that the documentation is in order.
What is driving the demand for real estate in Comporta?
Prior to the 2008 financial collapse which lasted in Portugal until 2012, Comporta had been predicted to be one of the hottest property spots in southern Europe and was expected to become a bull market lasting some twenty years.
The effect of the financial crash meant that many Portuguese buyers lost their access to credit which helped stagnate the market and wasn’t reversed until some six years later.
At the latter part of 2013 and early 2014 multiple French nationals, many with the help of their Swiss bankers emerged in Comporta, and perhaps partly due to the financial incentives and residency programmes earnestly started buying real estate.
Apart from the financial incentives, most foreign nationals who are mainly from Europe and the United States have purchased property in Comporta, Portugal driven by the demand for a safe destination within the secure borders of western Europe (Think terrorism and travelling abroad) and the close proximity that the village offers to the capital city, Lisbon and the international airport, (Only one hour and fifteen minutes) which makes travelling from many European capitals a quick and safe journey.
To add to the above, and probably the largest driver of the market, is the outstanding natural beauty, the fifty some kilometres of gorgeous beaches stretching from Troia to Melides, the sun (Three hundred days per year), bright blue skies (Even in Winter), the welcoming behavior and attitude of the Portuguese locals, high-end low density development and the affordable and laid back lifestyle.
Is it easy to purchase real estate in Comporta?
The process of buying property in Comporta is really straight-forward. Once you have identified the property you wish to buy, you’ll make an offer to the seller through your broker and after a little negotiation perhaps, your offer will be accepted. At this stage it is important that you employ the services of a competent lawyer who will then assist you throughout the process until completion of the sale.
Are there any restrictions on buying property?
There are no restrictions on buying a home in Comporta except for perhaps budget as property prices are quite high and continue to rise.
Can foreigners buy property in Comporta?
There are no limitations on foreigners buying property in Comporta, in fact, if it wasn’t for the foreigner investor, the real estate market in Comporta would not have grown as fast and strong as it has.
What are the property prices?
Properties for sale in Comporta range between €150,000 for a small plot in one of the villages whilst a stunning country estate with all the bells and whistles will cost in the region of €2.5m and upwards. That’s not to say that you cannot find something in between, you can, it’s just a question of what type of property you require and the area in which you intend to buy.
The market although quite small is growing with smaller developments coming online more frequently due to the fact of a law relating to Rural Tourism which allows a land owner with the approval from the Tourism Board and local planning department to build multiple properties within one estate. The rules are quite stringent but worthwhile if you want to become a small real estate magnate.
There are a number of new developments catering to the middle-class buyer, whilst the majority of purchases are from the top five percent wage earners and business owners.
How do I find a property to buy in Comporta?
That’s the million Dollar question, as unfortunately Portugal doesn’t offer a Multiple Listing Service, however, as the Comporta real estate market is relatively small your agent Living Portugal Property should be able to cover most bases. Just give us a call or send an email with your requirements.
How do I choose the right property?
Well, that’s probably the wrong question, it should be more on the lines of “Will I be able to find the right property?” As the majority of buyers who are looking to purchase and have the funding to do so, leave emptyhanded.
If you’re looking for something out of the ordinary, then a little patience and waiting time of around six months should suffice, although I’ve had clients who have waited patiently for over a year.
Fortunately, for most lucky buyers who end up with a home in Comporta to call their own, much of their research is conducted prior to their arrival and in most instances it’s only a question of choosing the one that suits them most.
What type of properties are for sale?
Up until a couple of years ago, it would have been difficult to find an apartment for sale in Comporta as most of the properties were village homes, estates, land and properties in need of renovation. Nowadays, there are a couple of options to choose from and worst-case-scenario you could always buy in Troia where there are both used and new apartments available.
The village homes are generally without conditions for a modern lifestyle, although with a good architect and flair, these options can be turned into something quite nice and are always conveniently located for the local stores and typical neighbourhood vibe.
Finding a luxury property for sale in Comporta has also been quite difficult, as most of these types of properties were built for their new owners to use, although there has always been one or two for sale.
Building plots in good locations have always been the preferred option, with many a property buyer opting to design and build their new home from scratch, the benefits of course are that you are rewarded with a home that suits your lifestyle and with all the facilities and conditions for comfortable living.
The larger estates in Comporta (Five hectares or more), have always been in demand as they afford convenience, (You can reach anywhere in Comporta within twenty minutes), privacy, and the space to fully appreciate Comporta lifestyle. Remember, Comporta isn’t your typical holiday destination but an environment where natures abound, and the human foot-print is still quite small.
Condition of the property
As previously stated, if you’re buying an existing property, not one that’s been built in the last five years or so, you’ll have to do some work. It may be a good idea to appoint a surveyor, (Not usual), although, that will depend on how much renovation work you intend to do, and your money may be better spent on an architect and hiring the right builder.
What is the procedure for buying a home in Comporta as a foreign national?
Purchasing property isn’t that different to buying real estate elsewhere in Europe or North America. What you will do is the following;
Find the right agent
That’s easy!! If you’re reading this article, you’ll know that we are professional and very knowledgeable about our area of expertise, Comporta; Coupled with the fact we’ve built an unrivalled network of professional service providers, I believe that a quick call or email will put in good-hands and on the right-track.
Finding the right property in Comporta?
Make sure that your real estate agent in Comporta, knows exactly what you want and has sufficient time to conclude the necessary due-diligence on your behalf.
If you’ve never been here, then one of the thing’s you’ll need to do is a recce of the area where homes within your budget are located, as it will be of no use visiting a beachside property if your budget is less than €500,000. There are always exceptions but as a rule you could be spending a million plus and in many instances for a brand-new home on a decent plot of land, you’ll be looking in excess of €2m.
Make an offer that is accepted by the seller
Luckily, this can be quite an enjoyable experience, although if you’ve found an incredible deal, be prepared that the seller may change their mind and ask for a higher figure than the original listed price.
Many sellers do not negotiate and expect to get what they’re asking, although in our experience there should be a little give and take, with potentially enough to pay for your legal services.
Obtaining a Fiscal Number
In order to close on a property transaction or even to open a bank account you will need to obtain a Fiscal number from the local tax authorities. The nearest office to Comporta will be found in Grandola, Alcacer do Sal or Setubal, although any office in Portugal may issue your card.
It’s a simple process taking no longer than fifteen minutes, although in many instances your lawyer will take care of this on your behalf.
Hire the services of a competent lawyer
Once your offer has been accepted, your will need to hire the professional services of a competent lawyer who will assist you throughout your process. A local lawyer is good although you may wish to engage one from Lisbon or elsewhere so as to avoid any conflict of interest.
Many lawyers in Portugal speak fluent French and English as well as Spanish, so finding someone who speaks your native tongue shouldn’t be difficult.
Signing the Purchase and Sales Contract
Your lawyer will prepare your Purchase and Sales Contract (CPCV – Contrato de Promessa de Compra e Venda) which will state the terms of your contract such as deposit amount, closing date and any pre-conditions that you have agreed with the seller, like, subject to survey, mortgage approval, quotations for works, or repairs that the seller has agreed to carry out prior to purchase, etcetera.
Although not compulsory, you should have the contract notarized in order that it may be registered at the land registry.
Paying the deposit
The normal deposit on a property purchase is between ten and thirty percent of the purchase price, although this will differ according to your offer and timeframe for closing the transaction.
One word of caution, under normal circumstances your deposit will go directly to the seller and will not be held in an escrow account prior to closing. The rule is, if you pull out of the transaction you will lose your deposit whilst if the seller does the same, they will have to pay back twice the amount that they received.
The size of your deposit may also be used as a strategy in your purchase to avoid being gazumped, as the higher your deposit, the higher amount the seller will have to return to you for not concluding the transaction.
Taxes and legal fees
When budgeting for tax and closings costs on your purchase in Comporta, as a rule of thumb, you should account for an additional 8% to 10% on top of the purchase price to cover purchase taxes, legal and Notary fees. This assumes that you are purchasing your property either as an individual or in the name of a Portuguese company.
The property transfer tax (Imposto Municipal sobre Transmissões) known as IMT, will have to be paid prior to closing and proof thereof will be presented to the Notary.
Who pays the real estate agent?
Normally, it is the seller that pays the commission to the agent for selling the property, although in some instance’s buyers can pay the agent as long as these fees are deducted from the sales price.
Closing will take place at one of the many licensed Notary offices where you will sign the Deed of Purchase and Sale (Escritura Publica de Compra e Venda) and have the property legally registered in your name.
The date and time will have been agreed between you and the seller, usually through your respective lawyers and normally stated on the Purchase and Sales Contract.
The notary works on behalf of the state, and provides an important service on property sales in Comporta, as they are obliged to check the Land Registry (Conservatória de Registo Predial) and Tax Records (Repartição de Finanças) to make sure that the property that you have agreed to purchase can be legally sold and also to confirm any restrictions or debt placed on the asset.
Once in order, you will sign the contract with the seller which will be witnessed by the notary and pay any outstanding amounts in order to finalise the transaction.
Can we obtain a mortgage on the property?
The simple answer is yes, in most cases, the lender will require a suitable deposit and confirm that you can cover your mortgage payments from your foreign sourced income or pension.
Although, some banks do offer interest-only mortgages perhaps in the early years, most lenders expect you to pay both capital and interest until your loan is paid.
Loan-to-value will depend on multiple factors, such as type of property, condition and your ability to repay, but as a general rule you should consider an LTV of around 70%.
Some developers who have an established relationship with the bank may be able to offer you better terms, which they may have negotiated on a bulk funding opportunity basis, against a particular real estate asset.
Current rates could be anywhere between one and three percent over Euribor three-months.
Do I need to open a bank account?
As a property owner you will have regular bills to pay such as annual taxes, electricity, water and the like and therefore having a local bank account will make life all that simpler.
Opening an account is straight-forward although you’ll probably need a couple of hours to go through all of the paperwork and establish what kind of relationship you require.
Which bank should I choose?
This will depend on a number of factors including where the bank is located, what services they provide and whether one of the officers speak your language.
Portugal, like the rest of Europe has a modern banking system and offers both local and international banks for you to choose from.
Some of the largest banks include Caixa Geral Depositos, Novo Banco, Santander, BBVA and Bankinter although for a local bank you may wish to visit Credito Agricola.
Should I buy in the name of a Portuguese company or as a private individual (couple)?
Generally, if you buy in the name of an individual or couple you will not have the initial or annual expense of running a company but at the same time you will not be able to claim any deductions from travelling to and from your new home.
If you choose to buy property in Comporta using a Portuguese company, then expenses related to maintenance, staff and travel can be added to your company expense account and claimed or deducted from any income you may receive.
If you purchase in the name of an offshore company that is domiciled in what is referred to as a black-listed country, then your purchase and annual taxes will be much higher.
Who should I speak with about buying property in Comporta?
Buying your ideal home in Comporta is a huge step and as perhaps you’re a long way from home you’ll need the help of an excellent local agent.
Living Portugal Property have been selling real estate in Comporta for over ten years and have an enviable reputation for being one of the most knowledgeable real estate brokers in the area. Why not enlist their help to make your home purchase in Comporta run smoothly, enjoyably and more importantly in a professional manner.
Author: Ronald Wayne
February 6th, 2019
Living Portugal Property Comporta
May 2020 – Updated
Please note: The content and therefore the opinion insinuated in the above article is that of the author and is not to be taken as a legal statement on behalf of Living Portugal Property the company that they represent. Please remember, when purchasing property, one should always consult a lawyer and only conclude a transaction when all of the necessary due-diligence has been concluded to your satisfaction and in accordance with the law and legal registration of such transaction.
Note: Additional articles relating to property sales in Comporta are uploaded regularly, so please return at your convenience. Additionally, if you know somebody who may be interested in buying a home in Comporta, please share this information, by forwarding the link to this page.
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