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Portugal – Down But Not Out

Portugal – Down But Not Out

Portugal has a proud history as one of Europe’s old guard elite, which can be felt in its historic castles and proud university towns. It has an old fashioned charm that pervades throughout the country and a sense of adventure that is at the heart of this worldly charm of old. No longer the alternative holiday destination for discerning travelers, looking to avoid the packed beaches of Spain and the Greek Islands, Portugal has now become a holiday Mecca in its own right and the Algarve is currently as famous as anywhere for sun, sand and sangria. In saying that, there is still plenty of mystery to find in Portugal if you can just go beyond its southerly coast line.

Its historic capital Lisbon for example, which once visited is never forgotten. A magical blend of romance, laid back bohemia, extravagance, and an incredible night life. The city is awash with World Heritage architecture displaying the truly breathtaking verve of Portuguese skill throughout its creative past. It is a city that intoxicates with its inspiring panoramas and gorgeous 18th century alleyways and squares. It is full of art and history and is a place that reveals itself over and over like the kaleidoscopic multi layered mosaic tapestries that decorate its open areas.

Porto, is Portugal’s second city and is a treasure chest for anyone looking to admire its historic architecture. It is a city with a soul all of its own. With a medieval quarter that is a World Heritage site and a vast array of cultural landmarks, which helped to showcase Porto as European Capital of Culture in 2001. Its beautiful parks and squares, wonderful food and world renowned wine make it a city to be thoroughly explored and enjoyed by anyone looking for the other side of Portugal.

Portugal also shows its antiquity in its medieval towns that are strewn throughout the country. The most notable of which is Obidos, with its enchanting 12th century castle overlooking a town that is made up of ancient stone work buildings and cobblestone streets. The town is a romantic step back in time and a picture perfect monument of old Portugal. Other inland towns of rare beauty include Marvao and Monsaraz, also, with a full millennium of history in their ancient designs and surrounding ruins.

When traveling though Portugal, one often gets the feeling of great austerity deriving from the enormous wealth amounted in the ‘Great Age Of Discovery’. Much of that money was spent building up a country that could rival any in the world for architectural grand designs.

It is true that for Portugal, the last few years have seen a dip in her recent fortunes and the disparity between the various economies in Europe are starting to show through the single currency. Portugal is in trouble financially and is continually borrowing money at higher and higher interest rates, without the means to pay off the debt or change the habits of the work force. Is the strain of southern Europe having been expected to synchronise with its serious northern European brothers and sisters, finally beginning to show through? One thing is for sure, there are real problems at the heart of Portugal’s finances and the recent bailout is mostly seen as just plugging the leak and quite possibly not a long term solution.

So how does this affect those wishing to invest in a slice of Portuguese property? Well, in many ways this can be seen as a positive as insiders now feel that the housing market, that has lost some 30% of its value in the last few years, has now leveled out and started to stabilize with the help of the bailout. This remains to be seen, but the fact that Portugal with its amazing weather and coast line, rich history and first class infrastructure, plus a good rate of borrowing for non resident buyers, currently between 3 to 4% which is better than buying in the UK, still makes it as an attractive a place as ever to the foreign buyer.

When starting to look at house prices it is still possible to buy old country Portual real estate in need of complete restoration for as little as €15,000. Obviously the real cost of living in a property like this would be much higher once building work and materials have been taken into consideration, but for anyone who feels comfortable working with renovations this can still be a cost effective way to own your dream home.

If all that work sounds like too much for you and you are looking for a place on the coast that is finished and key ready on a budget, then you might consider “Fractional Ownership”. This is an increasingly popular way of purchasing. With this type of purchase you benefit from having part ownership of a property and subsequently part ownership of the increasing value of the property. This can work for those that are looking for the ideal place that they can holiday in and gain capital appreciation without the larger outlay and responsibility of an outright purchase.

If your looking for an outright purchase that is key ready you can find affordable country houses for as little as €35,000 upwards. Two bed coastal villas can be found starting at €70,000 upwards. Depending on location and opulence prices vary greatly, but you can find a real bargain now in Portugal if you are patient and hunt around. It is very much a buyers market and you can afford to haggle to get the price you want in the current climate.

Once you have found the area you wish to buy in, the first thing to do is to locate a trusted estate agent. This is essential, so that you know exactly what you are buying. Non Portuguese citizens can buy without restrictions but it is essential that a good English speaking lawyer is found, as they will be central in guiding you through the process, whilst guiding you away from any possible shortcomings in the sale transaction.

Once you have found a residential property in Portugal that you wish to bid on, to proceed ahead you must ensure they have the following documentation.

• A License for Habitation if the property was built after 1951
• An official record at the Land Conservatory
• At the tax office you must be able to trace a detailed description of the property

Once you have retained a good lawyer, it is their job to check that everything proceeds as it should. The Public Notary who is responsible for witnessing the transaction is not there to give you legal advise and is not accountable should something untoward happen after the transaction. Your lawyer will be responsible for all legal documents, all permits that have to be attained and payments that are to be made throughout.

Further costs can be up to 15% so it is prudent to set this much aside on top of the purchase price to cover fees by the notary and taxes, plus stamp duty, mortgage fees and all legal costs.

Even with this additional cost, Portugal still offers good value, with fantastic rental returns on investments. It may be going through something of a difficult time at the moment, but with this much history and beauty this small and wonderful country is still and will remain a European paradise.