There are many incentives to buying property overseas, especially when you choose to buy your dream home in a place such as Portugal. From the beautiful countryside to its beach resorts and golf communities, Portugal has a lot to offer. For those investors who are looking for a good opportunity, the country’s low taxes and its strong rental market are key to seal the deal.

But how is the current property market, and how does Brexit and Covid-19 affect your buying plans?

The price of a property can be severely impacted by various factors such as the state of the economy, both in the country of residence and in the country you are buying in, as well as supply and demand. You might also want to consider that the investment you are making now will not be affected by the political climate in the specific country. 2020 has been a difficult year, as many countries, including the UK are still dealing with the effects of the coronavirus pandemic and the prospect of further lockdowns, while Brexit is still looming in the near distance.  The pandemic has deeply hurt economies and has inevitably hurt property prices home and abroad, making earlier investments seem more affordable now, which is not necessarily a bad thing.  

Brexit will accelerate the process of buying a home

British buyers are trying to secure their property abroad and their right to residency by buying before the Brexit deadline. Estate agents predict that the autumn will be a busy time for buyers dominated by higher property prices until the end of December, indicating that it is perhaps better to start your research now and ensure you do not pay more for a house you could have got much cheaper earlier.

Portugal, for example, has taken steps to attract British buyers, especially retirees by offering attractive tax schemes. Portugal is ranked the best country in the world for expatriates.

NHR Tax Status

In 2009, the Portuguese government introduced the Non-Habitual Tax Resident status (NHR) to attract high value residents, and it offered reduced tax rates and some exemptions for the first ten years in the country. Until recently, NHR allowed most foreign pension income to be tax-free. However, the 2020 Portuguese Budget introduced new changes to the NHR approved by the Portuguese Parliament on Thursday 6th February 2020. According to it, there will be a 10% tax on the foreign revenue of British pensioners and other foreigners who move to Portugal, with those living there before 2020 not being affected. If you already have NHR status or applied for Portuguese residence before 1 April 2020, when the new regime came into effect, you can still be eligible for exemptions on your UK pension income for the remainder of your ten-year NHR period.

No matter what, the tax is much lower than that charged in other countries such as the UK and significantly lower than the Portuguese income tax rates of 14.5% to 48%. It is still considered very attractive to foreigners.

The proposed changes come to address specific tax regimes and visa schemes that offer EU residency rights in return for property purchases. Retired Portuguese nationals and residents outside the NHR regime cannot access such tax breaks, there has also been pressure for change from within Portugal itself.

Whether low taxes or the Portuguese lifestyle itself seem appealing to you, real estate agents argue that now is the right time to buy and transfer your money abroad to complete your property purchase. They see that confidence will soon return to the market by the autumn of 2021 and that the first few months of the year will present an even bigger opportunity to buy.

If you are a British buyer, and want to secure a strong investment opportunity, now is the time to get in touch with your currency broker. A currency specialist such as Universal Partners FX can help you navigate the current market while taking into consideration your specific needs, goals and your budget.

When considering buying your dream home in Portugal, Universal Partners FX can give you peace of mind when sending money overseas. If you want to schedule ahead and safeguard your funds, talk to one of their foreign exchange experts today.

Brits buying property abroad and looking to experience that unique Mediterranean atmosphere, sun-kissed beaches, and European heritage have often turned their gaze towards the majestic Portugal. A great alternative to Europe’s overpopulated cities, Portugal has been the choice for many expats looking for their second home abroad.

However, with recent reports suggesting that Portugal will not be on the initial list of air bridges from UK, there has been a clamour from many tour operators and holiday makers alike to ensure that this is not the case come tomorrow when the list is announced. These demands may fall on deaf ears, but it highlights how Portugal is a real favourite amongst Brits as a holiday destination. This is for many reasons, first and foremost, Portugal is England's oldest ally since 1147 when English crusaders helped King Alfonso I capture Lisbon from the Muslims.

Famous for its national drink, port, beaches and dramatic scenery, Portugal is also an affordable destination, and the second best in value after Bulgaria. Younger generations have heard of the Livraria Porto bookstore in the Portuguese municipality of Porto, which has inspired the Hogwarts Library in JK Rowling’s Harry Potter books, while older ones are enthralled by its rich history, being one of the oldest states in Europe.

Portugal combines contemporary lifestyle with antiquated charm, and despite the recent financial crisis, the country has managed to recover, offering expats attractive tax and residency incentives and low mortgage rates.

Buying property in some of Portugal’s most popular locations

Whether you’re looking for a holiday home, your dream property to retire to or an investment, Portugal offers a variety of properties at different locations and prices. From Algarve’s beaches and golf courses, to Lisbon’s hip neighbourhoods and Porto’s famous wineries, Brits have many choices depending on the kind of lifestyle they want to experience and their budget.

Algarve’s property developments in such resort towns as Vilamoura and Quinta do Lago are sought after and expensive. A two-bedroom apartment can be up to €360,000 while a three-bedroom villa can worth around a million. Prices might be the same in Western Algarve, but, there, life is quieter as in the fishing town of Lagos where property prices range from €200,000 to €5 million. In the booming area of Eastern Algarve, properties can be cheaper, and you can find some attractive opportunities in the town of Tavira where country villas can be around €450,000.

Lisbon’s Blue coast, Costa Azul, is one of the most peaceful areas with such fishing villages as Sesimbra and Sines, most famous for its cuisine and seafood restaurants. Here, you can find five-bedroom villas ranging from €1-3 million or a three-bedroom house for €200,000.

Townhouses and apartments in developments can be a cheaper alternative, with the latter offering communal facilities such as pools and gardens with shared maintenance costs.

Financing your dream home in Portugal

If you are not transferring funds or re-mortgaging your UK home, you will need to consider your borrowing options, such as taking a Portuguese mortgage against a property. The larger amount of cash you deposit the easier it will be to secure a loan at a reasonable interest rate. You will need to also have in mind currency fluctuation as you will be better borrowing in the same currency you will be repaying the loan.

Currency Exchange

This is why, it is important to consult a specialist foreign exchange company such as Universal Partners FX right from the start. UPFX can help you manage currency fluctuations by fixing the rate, as the final price of your home could vary significantly from the time you made your offer.

When moving large amounts of cash, it is best to get in touch with UPFX’s currency specialists where they can offer you competitive exchange rates and the best value for your money. Find out what your money is worth by giving them a call or requesting a free quote.

For many British expats, buying property in Portugal remains a top priority despite the uncertainties of Brexit. From Lisbon to Porto, Chaves and Lagos, Portugal’s most popular locations continue to seduce British expats who emigrate in the country to enjoy the warm summers and uncrowded cities offering quality of life and delicious cuisine. Just think of Portugal’s iconic Fado music, Port wine, Algarve’s beaches and the delicious pastel de nata; Portugal’s charms can easily convince anyone to move there.

Whether you are looking for a villa or a beachside property, it’s important to be aware of the legal processes, costs, taxes and other fees involved in buying property in Portugal. Here’s some helpful tips to get you started.

The property market, residence and Brexit

The property market is now growing steadily and buying a property in a good location will count as a good investment.

In the last decade, around three-quarters of people own their own home in Portugal. As there are no restrictions on owning foreign property, EU citizens can buy their property easily. Around 50,000 Brits have been living in Portugal.

Especially if they can afford it, they can apply for a golden visa, which will allow them to live there for five years if they invest in a property worth a minimum of EUR 500,000000 (or EUR 350,000 for redevelopment in an urban renovation zone). After the period of five years, they will be able to apply for permanent residency. If you’re applying for a golden visa, you’ll need to reside in Portugal for at least seven days in the first year and 14 or more days in the following years.

In general, if you have been living in Portugal for five years you can apply for a permanent residence status, and after six years, for Portuguese citizenship as Portugal allows dual citizenship.

With Brexit, British citizens might lose some of the freedoms they enjoyed under the EU. While buying a holiday home and not moving in Portugal permanently won’t change after Brexit, there might be more bureaucratic processes, including applying for the visa waiver ETIAS scheme (European Travel Information and Authorization System). This is a completely new electronic system expected to be in place by 2021, which will keep track of visitors from countries who do not need a visa to enter the Schengen Zone. This means that you'll be limited to 90 days in any 180-day period within the Schengen area.

According to the Portuguese Prime Minister, Antonio Costa, the rights of British citizens who live or invest in Portugal will be protected. With the two countries’ close relationship and Portuguese economy depending on tourism and construction, British citizens’ rights might not be under threat.

Fiscal Number

To buy a property in Portugal, you’ll need to apply for a Personal Fiscal Number (Número de Identificação Fiscal (NIF), or Número de Contribuinte), a tax identification number issued to anyone conducting official business in Portugal. Whether investing in property, living or being involved in any form of business in Portugal, you will need to have a Portuguese fiscal number. For example, if you are buying a property with your partner and your names are both on the title deeds, then you will both need to have a Portuguese tax identification number. 

How much do properties cost in Portugal?

Location will naturally affect the property price, with Lisbon and the Algarve’s coastal areas being the most popular and expensive areas.  A villa in Lisbon and Algarve will cost you around €400,000 and €300,000 respectively, while a small apartment will be around €130,000 in either of these two locations. You have to consider that your expenses will increase depending on the property’s price. The more expensive your home, the more you will have to pay in property taxes, based on a property’s fiscal value. If you are looking for a bargain, heading towards the central region of Portugal, will offer you the advantage of lovely big homes at lower prices.  Compared to the Algarve, the Silver Coast is also a beautiful and cheaper alternative.

Universal Partners FX

If you have found your dream home in Portugal and you want to transfer your deposit from abroad, then you need expert help from a currency specialist firm such as Universal Partners FX. UPFX can help you make all your international money transfers safely and fast. Get in touch with their dedicated currency dealers to get access to bank-beating exchange rates and find out how much they can save you on your international currency transfers.