The guide to spectacular property in and around ... - Quinta Properties

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London Branch MONEY TALKING quinta properties financial pages The Quinta Properties guide to finance, legal matters and property ownership We have put together the following pink pages to give potential purchasers and vendors an insight into buying, owning and indeed selling property in and around the exclusive resort of Quinta do Lago. In this section you will find invaluable information to ensure that you get the most from your investment. In these pages we have explained the different buying and selling procedures, with an emphasis on the Offshore/Onshore question, offered some mortgage options, and explained many aspects of property taxation. We have also shown examples of average running and maintenance costs – from condominium and security fees to maid service and pool cleaning! Getting them lined up At Quinta Properties we know that our business depends on happy customers, and happy customers are well advised customers. We make it our business to make sure that all our clients, buyers and vendors alike are given the very best guidance and advice. This starts with making sure that we understand our clients’ needs and then making that extra effort to guide them through the buying and/or selling procedure, to achieve the desired results. We hope you find these pages helpful! Money isn’t everything, but it sure keeps you in touch with your children Paul Getty Buying Procedures Quinta Properties Page 44 Financing The Dream The bank with local knowledge, Simon Perks of Totta Page 45 Company Ownership What are the advantages? Quinta Properties Page 46 Property Taxation The Facts on Tax, Dennis Swing Greene of euroFINESCO Page 48 Portuguese Tax Benefits How tax rates compare to Spain, euroFINESCO Page 51 Running Costs From infrastructure to garden maintenance costs in Quinta do Lago Page 52 Using Your Equity How to optimise your investment, Jyske Bank Page 54 43
Buying Procedures There are two main ways in which one can buy a property in Portugal. The first is the transfer of the deed from the vendor’s name to the buyer’s, which we refer to as Private Ownership. The second is the transfer of the shares of a company which owns the property, known as Corporate Ownership. Both are relatively straightforward. Private Ownership When buying a property in Portugal in one’s own name, the first step is the Preliminary or Promissory Contract (Contrato Promessa de Compra e Venda). This is a legally binding contract between vendors and buyers and signed before a notary. Upon this signature the buyer generally pays a 10% non-refundable deposit. This contract usually states exactly who the buyers and the vendors are, a description of the property, confirmation that there is clear title, and the terms of payment and completion. Both parties should be represented by a local lawyer. Upon completion the Escritura (Final Deed) is signed in front of the Notary who checks all the documentation and sees that the IMT (property purchase tax) has been paid. At this stage, the full purchase price is also paid. From time to time and with the agreement of both parties, a part of the purchase price may be withheld from the vendor until certain aspects of the deal are fulfilled. For example, a snagging list may need to be dealt with. In these circumstances, the buyer’s lawyer generally holds the ‘retention’ until all paperwork and other outstanding issues are resolved. Financing the dream quinta properties financial pages quinta properties financial pages Once the deed is done, the buyer’s lawyer registers the new owner of the property in the Land Registry (Registo Predial). Buyers should request a copy of this registration for their files. Corporate Ownership Many properties in Portugal, and especially in the Algarve, are owned by a company. Today these companies are usually domiciled in Malta or Delaware. The Property itself is an asset of the company and buyers purchase the shares of the company. This transaction takes place in the jurisdiction where the company is domiciled. There are benefits in buying and owning property in this manner and we have explained these in the section Corporate Ownership. Both parties do still require a local lawyer as the usual searches on the property here in Portugal must still be carried out, and most local lawyers are also familiar with this type of corporate transaction. A Share Purchase Agreement is drawn up, the usual deposit paid and a completion date set in the usual manner. The immediate benefits of such a transaction are indeed its simplicity and the fact that all documentation proceeds in the English language. The Costs Involved These are usually the lawyers’ and agents’ fees and taxes. In our pages on Taxation we have explained these in detail. The lawyers’ fees vary anywhere from 1% to 2.5% of the purchase price, but this depends on the circumstances and lawyers involved. The estate agents are paid by the vendors in Portugal. These rates also depend on the agent and vary anywhere from 3% to 7%. Simon Perks from Banco Santander Totta or simply ‘Totta’ There is no such thing as a ‘typical buyer’ of property in Quinta do Lago – although there are some common factors. Normally they are well-travelled, with an international outlook on life. They probably like golf, certainly enjoy nature at its best, and appreciate the delicious choice of wining and dining in the area. They may be looking for a mortgage to top up their available funds, or to use bank money rather than their own to buy a property: either way, they need to have confidence with their chosen finance provider and the comfort of people who speak their language. Banco Santander Totta (simply known as ‘Totta’ to its friends) is a Portuguese commercial bank that can trace its origins back to 1843. In March 2000 the bank became part of Grupo Santander, one of the world’s largest financial groups, who took over Abbey National in 2004. The London branch, in the heart of the City, opened in 1973: it is authorised by the Bank of Portugal and regulated by the FSA for the conduct of UK business, making it ideally placed to support those buying a property in Quinta do Lago – or anywhere else in Portugal, come to that! The mortgage plan offered by Totta is straightforward, with no hidden clauses or small print. Geared specifically for the market in Portugal, finance is available for the purchase of freehold land and buildings, apartments and villas. Stage payments will also be considered, and these are particularly useful for those having their dream villa built, or buying off-plan. The bank is happy to lend for properties being bought privately or through a company specifically set up for the purpose. It will require a first legal mortgage, on a privately-held property, or a charge over the shares of a company in a corporate structure as security, and also ask for an assignment over an appropriate life insurance policy. The bank will normally lend up to 75% of an independent valuation value, and will not lend more than the total Simon admits that he has a soft spot for Quinta do Lago. “Our clients here have all seen their properties rise in value, which shows what a good investment they have made, and we at Totta are always happy to talk to anyone thinking of buying in Quinta do Lago.” purchase price. The minimum loan is GBP 75,000 or equivalent, and interest is normally 1.75% over the bank’s base rate in the relevant currency: lower rates may be negotiated on a case-bycase basis. The maximum term is usually 25 years, and will not normally extend beyond the 65 th birthday of the applicant. Although Totta has an extensive network of branches throughout Portugal, mortgage applications are always handled from London. The man responsible is Simon Perks, a regular visitor to the Algarve, who knows the developers and agents well, and what the markets are doing, and can talk from personal experience about individual resorts. Banco Santader Totta SA t: 020 7621 2660 f: 020 7929 4970 e: mortgage@btax.co.uk www.totta.co.uk 44 45
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Page 13 and 14: Conjuror 24 Gisela is rapidly becom
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Page 17 and 18: 32 the Pride and the passion THE PE
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Page 31 and 32: A truly magnificent villa recently
Page 33 and 34: 64 “If your passion is golf, this
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