The news means that the Silver and Blue Coast may be the perfect place for foreign property investors to search for new investments for the property portfolio – the extra transport links will mean increasing rental demand in the area, and this means that property prices will probably grow significantly.

With many buyers now priced out of the Algarve market and with building restrictions on the Algarve coastline, the Blue and Silver Coasts offer an attractive alternative for overseas property investors with plenty of good opportunities to be found.

The Silver Coast stretches from Lisbon to Fiqueira da Foz and is currently fairly unspoilt by the tourist trade and offers a traditional lifestyle amongst medieval villages, quiet beaches and beautiful lagoons. However, property development plans have already begun with a championship golf course already on the books – so getting in now before the rush will net the best return on investment.

The Blue Coast is the southern stretch of Portugal’s west coast. Again, there is currently little in the way of mass tourism and the area boasts stunning countryside with quiet beaches and small fishing villages. Again, property development is already starting with golf courses and new housing developments already planned so getting in early is key to maximise you return on investment.

If you are planning to buy a property in Portugal, read our free Portugal Property Buyer’s Guide here.

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Joia das Dunas is a new sustainable development in central Portugal and if offers the latest in green housing technology. The developers are hoping to minimise the carbon footprint of the villas without compromising on deisgn aspects. Each villa will be built from locally sourced materials which can be recycled; Natural geothermal energy will be used for the heating and cooling systems. Heating bills are predicted to be about 66-74% less than heating provided by natural gas or electric.

Situated in an area of outstanding natural beauty and a 35 minute drive away from Lisbon airport, the development is sure to attract a lot of attention from foreign investors keen to jump on the Green bandwagon. Foxtons are offering 18 villas initially, with prices ranging between €575,000 to €810,000.

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When you have found a property you want to buy, your first step is to familiarise yourself with the local town hall known as the ‘Camara’. At this stage, it is also wise to find an independent Portuguese lawyer who speaks your language fluently.

Your lawyer will need the power of attorney (Parcuracao) so that they are able to act on your behalf. The power of attorney can be requested at the Notary office or the consulate offices.

You will then need to register at the tax office (Financas) where you will receive a fiscal number.

Now, you can have the searches on your property carried out. Make sure that the property is correctly registered at the land conservatory offices (Conservatoria do Registo Predial) and is in the seller’s name. If the property is not correctly registered, do not go ahead with the purchase. The searches should show the history of the land and property and will show whether there are any charges remaining over the property.

If your property is a place of residence, you will need to get a habitation license (Licencca de habitacao) which is issued by your local town hall.

If your property is located in an urban area, you will need to get a Cardernerta Urbana which is available from your local tax office. This will indicate the rateable value of your property as well as the tax you will need to pay on the property to the local town hall each year. Although not necessary, it is advisable to have a search of the property at the local tax office so that you are aware of all the charges you will need to pay.

Once both the vendor and buyer are happy with the property, the promissary contract (Contracto de promessa de compra e venda) can proceed. This contract is signed at the Notary office and is legally binding. At this point, you will need to pay a deposit on the property and you will agree a completion date with the vendor. The deposit is there to protect the house sale agreement – if the seller withdraws from the sale, they must pay twice the deposit back to the buyer; if the buyer withdraws from the sale, they lose their deposit.

Before completion, property tax (sisa) must be paid by the property buyer at the local tax office. The tax is variable, so check before you buy.

After the tax has been paid, the sale can complete. The sale must be executed in fron of the Notary and the balance of the property price must be paid according to the promissory contract. The deeds of purchase (Escritura de Compra e Venda) are now presented to the land conservatory and the property is then registered in the name of the new owner. A registration fee of 0.75% of the purchase price must be paid to the land conservatory for the registration.

You will then probably need to settle your legal fees to both the Notary and your lawyer. Legal fees vary, but 2% is a good ballpark figure to take. The fees should have been confirmed prior to you signing the promissory contract.

When you decide to sell your property on, it is important that you consider capital gains tax. For non-resident owners, capital gains are taxed on one half the capital gains being added to the taxpayer’s income for income tax purposes. If the owner is a resident of the property, capital gains tax is not payable if the full sale value is then invested in another property in Portugal within two years of completion of the sale.

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Portugal is popular because it has excellent transport links to the rest of Europe – return flights are from as little as £150. The transport infrastructure in the country itself is good, and is still being improved, with motorways joining the larger cities making travel cheap and easy. Portugal has a similar sort of climate to Spain however it is seen as the more exotic location. There is also less overdevelopment which has been seen in Spain and developers and planners have taken more care to ensure that the beauty of the country is not spoilt by all the properties which are springing up.

Portugal gets more sunshine than Florida – in the region of 3,000 hours a year. It also has low crime levels and no terrorism threat, again a bonus over Spain. The pollution levels are lower than most of Europe and the leisure facilities equal any other European investment hotspot.

The buy-to-let market is still strong and is still providing good incomes for those who buy houses in Portugal. It is important to research before you buy to ensure if you plan to rent your house, you buy in an area with a strong rental or tourist market.

Mortgages are also very easy to get in Portugal with international banks such as Barclays Bank well represented throughout the country. Most banks will have english speaking advisors to guide you through the buying process. Most also have specific products and loans aimed at foreign investors at good rates of interest. However, be aware that if you are planning a rural retreat, many banks will not give you a mortgage as they much prefer to lend in properties in the larger cities and towns, and in the areas with plenty of tourism.

One of the latest parts of Portugal on the brink of a property bubble is Minho, the most northern province. The climate is more temperate than the south, but ti sitll provides warm summers abd balmy winters. Prices have remained static for the past few years meaning charming rustic properties can be found for around £40,000. The scenery is pretty much unspoilt by tourism and offers acres of countryside. Recently, there have been a number of road and telecommunications improvements in the area meaning that home working and telecommunting have become a possibility for the locals. The easier road access also means that tourists are beginning to visit the area making it an excellent prospect for good investment returns in the next few years.

If you like to see a list of properties for sale in Portugal, please click here
If you would like to know more about property in Portugal, we suggest reading one of the two following books:

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