< PreviousQP SAVILLS • AN EYE FOR PROPERTY • MEET THE LOULÉ TEAMWWW.QP.PT10MEET THELoulé TeamKimberley Tucker Manager, QP Savills – Loulé Office Originally from the UK, Kim moved to Portugal in her early 20s and loved it so much she decided to stay. 18 years later, with a house in the Silves countryside, a Portuguese partner, 2 bilingual children, and a variety of 4-legged friends, she proudly calls the Algarve her home. Born in Dagenham and an only child, Kim was raised in a family of postmen and teachers and grew up enjoying all that London had to offer. But her biggest passion was sports which led to an offer of a scholarship with the RAF. Nevertheless, her ambition drew her to pursue studies in Law instead. Busy London life took its toll and, always the adventurer, a summer job in Portugal caught her attention and a few months later, with a gleam in her eye, she landed in the Algarve. Professionally, Kim spent 7 years at the award-winning luxury boutique hotel and 2-star Michelin restaurant Vila Joya. What an experience that was! From working alongside some of the most talented professionals in the industry, organising incredible events, and, of course, tasting world-class food and wine, it was indeed a journey and where she met her partner Markus, father of her two adorable children, Ariana and Ella. With two young daughters, hospitality began to weigh heavily and Kim decided it was time for a change. Where better to apply to than QP Savills? QP SAVILLS • AN EYE FOR PROPERTY • MEET THE LOULÉ TEAMWWW.QP.PT11Kerstin remembers first meeting Kim and how she was immediately struck by her quick, sharp intelligence and amazing energy. Kim was hired as Client Liaison in our Quinta do Lago office at the beginning of 2017 and not only slipped into the job quickly but soon reinvented the position and took the service we offered to our clients to the next level. In 2019, with her positive can-do attitude, Kim was part of the great start-up team which opened our new QP Savills office in Loulé. The office quickly flourished. They grew the QP portfolio of fabulous properties across the coast and introduced the company to a much wider audience of buyers and sellers to the benefit of all of our clients. At the end of 2020, Kim was offered the position of managing the Loulé business and, luckily for us, she accepted. With incredible enthusiasm and full of ideas, she has set to work building up this young business on the strength of the existing offices. Buyers can now contact QP and receive the very best care and advice on buying, or indeed selling, property - not only in the Quinta do Lago and Vale do Lobo areas, but our expertise has grown to cover residential properties across the Algarve. This includes excellent developments such as Palmares in the west, Amendoeira and the spectacular Bayline on the waterfront in central Algarve, to the charming Ombria Resort on our doorstep in Loulé, and, of course, our very own glamorous W Residences Algarve, where we are the exclusive agents. Kim is a firm believer that the lifestyle in the Algarve is hard to beat. From the quality of healthcare and education to the life she can offer her children. No wonder so many are encouraged to spend more time in or, indeed, relocate to Portugal permanently. Demand is up for better properties. “Our speciality!”, she proudly boasts, be it in the hills with fabulous views, front-row to championship golf courses, trendy lofts in historical city centres, or glamourous penthouses overlooking the beach - QP covers them all. Always on hand to give advice and information, Kim is not only passionate about all things property, but she is also a fount of knowledge on what to do and where to go to make the most out of your home in the Algarve.“Kim is a firm believer that the lifestyle in the Algarve is hard to beat. From the quality of healthcare and education to the life she can offer her children.” QP SAVILLS • AN EYE FOR PROPERTY • MEET THE LOULÉ TEAMWWW.QP.PT12Miguel Sousa Sales Executive - QP Savills Born in Lisbon in the last century, he is the oldest of 5 brothers and, for now, the only man on the Loulé team. He has become the W Algarve specialist at QP and has a great deal of experience in the property market. Miguel thinks outside of the box and is a big (1.91m tall) and much-valued member of the team. His hobbies are, among others, interior decoration, architecture and photography. He loves long walks with his partner Sabine and their two dogs, Mopi and Sami. Father of 2, Miguel’s biggest weekly stress is watching his son defend the goal for Sporting Football Club. A heady mixture of complete anxiety and great pride. He loves to cook! And during the last few years, he has tried to master (without great success) the mouthwatering dishes of Portuguese cuisine, but chocolate remains his biggest weakness. 2021 promises to be a big year of change not just for all of us, but especially for Miguel and his big goal is to fit into his groom’s suit for the wedding scheduled for December. Optimistic by nature, he believes that despite the current conditions we all live in, the best is yet to come and he passionately believes the Algarve is a fantastic destination for those that value quality of life, security, amazing climate, delicious gastronomy and the gentle and friendly local people. Miguel will be delighted to help you find your dream home!Roshni Matharu Sales Executive - QP Savills Roshni was brought to Portugal by her parents when she was a baby. Her father was opening a dental lab in Almancil and for 15 years the family made the Algarve their home. Roshni was fortunate to go to the local school and grew up bilingual. When they returned to the UK and West Sussex, Roshni finished her education at the Central Sussex College and went on to work in the travel industry, her appetite for foreign travel far from extinguished. In 2014 she returned to the Algarve and worked as a beauty advisor for The Body Shop and went on to manage a successful clothing boutique. As part of the Loulé team, she certainly dresses to impress. She is the QP fashionista and loves nothing more than to cook the occasional Indian dishes for a special team lunch; (her parents were Punjabi Kenyans) and occasionally some Venezuelan “empanadas and arepas” as her partner is Venezuelan. Roshni is truly international. She is organised and her colleagues might go as far as saying she is a bit bossy. She would say she just likes getting the job done. But, she is fun too and always has time for some office jokes. Roshni started in the QP Savills Loulé office as office admin in 2019 and at the end of 2020 was invited to join the sales team. With her bubbly personality, her love of the area, knowledge of the QP portfolio and the paperwork associated with all things property, she is starting on the front foot. Our clients will be in good hands!“Miguel passionately believes the Algarve is a fantastic destination for those that value quality of life, security, amazing climate, delicious gastronomy and the gentle and friendly local people.”QP SAVILLS • AN EYE FOR PROPERTY • MEET THE LOULÉ TEAMWWW.QP.PT13Tuna da Cruz Sales Executive – QP Savills Tuna is a truly modern and international girl. Born in Holland to Turkish immigrant parents, Tuna grew up as many do in Holland - speaking several languages. At 19, after seeing an ad looking for performers for a theatre project, she auditioned and landed the lead role as Juliet. She went on and toured 4 countries in 3 weeks with a group of 60 people from all around the world. She smiles, “It was such a privilege to be part of such a venture”. Not bad for a first job. She came to live in Portugal in 2005 and has never looked back. Last year she celebrated 22 years of marriage to her Portuguese photographer husband, Luis, and together with their beautiful son Şahin, they live in Loulé. Tuna is a real foodie and has been seen munching on anything from a super healthy veggie burger to an entire bucket of ice cream. Her true weaknesses are cheese and wine – commodities in great quality and quantity in Portugal. With her 5 languages, Dutch, English, Portuguese, German and Turkish, Tuna had a 7-year career managing the multinational Booking.com in Portugal before joining the QP team in 2019. “I love QP Savills but especially our office in Loulé. The office is a gorgeous old building and it's right in the heart of the old town next to the town's oldest and best-loved café Calçinha. We have all the benefits of working for a well-known company but also the challenge to grow the Loulé business. The properties we are taking on are amazing and certainly in step with the QP brand. Promoting them is no hardship!! Our clients often pop in for a coffee and we have a wonderful atmosphere.” “Home is absolutely Portugal although I miss a patatje oorlog (French fries with peanut butter sauce, mayonnaise and chopped onions on top) from the Bram Ladage and a nice appel taart (apple pie) from Café Dudok in Rotterdam. I miss travelling with my husband but for now, I’m happy to indulge in my other passions: reading adventure and sci-fibooks and, binge-watching my favourite TV shows with a bag of “Drops” liquorice.”“I love QP Savills but especially our office in Loulé. The office is a gorgeous old building and it's right in the heart of the old town next to the town's oldest and best-loved café Calçinha. We have all the benefits of working for a well-known company but also the challenge to grow the Loulé business. Tuna da CruzQP SAVILLS • AN EYE FOR PROPERTY • MARKET REPORTWWW.QP.PT14The local property market is certainly not immune to the global events of 2020 and has experienced shifts in what people are looking for, how people buy property, and how much they are willing to invest. Surprisingly, these shifts were not all negative. The lower and middle markets have suffered. The level of demand decreased as people’s financial situation made investing in property more difficult and, even if they still could and would invest, the travel restrictions made viewing properties only possible virtually. And as the levels of transactions reduced, so did prices and what vendors might accept. As is often the case, the top of the market has proven to be a little more resilient to market influences and we can report an increase in enquiries, transactions, and property values. The first change we all saw was how it felt to live through a lockdown and spend a great deal more time at home. It affected how we live, work, and play and, even though these changes felt quite dramatic, many of these changes had already been happening over the past 5 to 10 years. 2020 only made us look more closely at the possibility of working from home and gave us the extra push, or should we call it a shove, to make working from home a real possibility. Spending more time at home then made us look more closely at the properties we live in and many of us decided that how and where we live could be improved. No longer do most of us need to live within commuter distance to cities. In Portugal, we have also felt the effect of this trend. Enquires were up and so were the number of sales. 2019 was an extraordinary year at the top end of the property market. If we had had another year like it in 2020 we would have been delighted. The fact is, 2020 turned out to be even better. As soon as we were released from lockdown, and after a few months of no sales, the pent-up demand was unleashed, and it was all hands on deck at QP. Statistics at the end of 2020 show that enquires were up 67% on 2019. Looking a little closer we can see why. Historically our buyers have been predominantly interested in holiday homes. Over the past year, we have seen many more enquiries from buyers wishing to establish residency in Portugal. We see that this was spurred on not only by a relatively safe and healthy environment the Algarve represented in terms of lifestyle and the desire to work from a home in Portugal, but also by the fact that many Brits were keen to reserve themselves the right to travel to and stay as long as they liked in Portugal; a right they would otherwise post-Brexit no longer have. What was also unexpected was the average sales value hike in 2020. Between 2012 and 2014 the average sales price was 1.45m. In 2018 and 2019 it was 1.8m and in 2020 it climbed to 2.3m. The purchase of a holiday home or a permanent or semi-permanent home are two very different projects. Not least of all with regard to the amount people might be willing to spend on each. It is clear to see that our enquiries came in with bigger budgets and from people looking for exceptional properties in which they were planning to spend more time. And as a result, they were often on the search for bigger, better homes and better locations. And many of our existing property owners also came to the conclusion that they wanted to spend more time in the Algarve and also wanted a better property. This stimulated the top end of the property market beyond all 2020/21 has been as unexpected as it is unprecedented.expectations. So much so that there was more demand than supply and consequently a noticeable hike in property values. Price tags for private villas within Quinta do Lago and Vale do Lobo of between EUR 6 to 8m have become quite normal in recent years. Over the past 2 years, more and more exceptional properties have achieved sales prices of over EUR 10m and EUR 18.000 per square meter. This is an important milestone for the country’s property market and represents values not seen before nationally. Outside of the resorts, there is also a noticeable increase in demand and a lack of properties for sale. Going forward, we expect prices to increase in these areas and hopefully motivate more property owners to sell… Another development we observed in 2020 is that historically buyers have come out to view properties 2 or 3 times before deciding which property was right for them. This changed in 2020. With the British losing some of their travel freedom within the EU at the end of 2020 and the increased amount of transactions taking place, buyers were more motivated to make faster decisions or face losing out on some of their top choices. It was quite common that multi-million Euro properties were bought upon a single viewing. Our sales team has had to adapt. Virtual tours and dealing with our clients online soon became the norm. But not only that, while our enquiries are still predominantly from the UK, there is a substantial increase in the number of other nationalities coming to the central Algarve. We have grown the team to over 20, not only to be able to cope and maintain the level of service we provide but, to also introduce more languages into the sales force. Enquiries from French and Spanish is up 20% and no longer are these buyers looking to invest between EUR 500k to 750k; they too are looking to relocate to Portugal and are also in search of top properties. And money has never been cheaper. Helping more buyers to buy and buy bigger, local banks are offering incredibly good rates. Buyers across all budgets are borrowing more frequently to buy. In years gone by, we would possibly have a buyer a year who purchased with a mortgage. Today we estimate that up to 25% of our buyers are borrowing. Interest rates are low and this has also allowed people to invest in properties with slightly higher price tags. Millennium BCP are lending up to 80% with interest rates of between 1.1 and 1.5%. At QP Savills, we saw a 67% increase in enquiries, the average sales price jump from Euro 1.8m to 2.3m, and a total sales volume increase of 15% to Euro 169.7m. We anticipate that the trends seen in 2020 will continue in 2021. There is no sign of reduced demand and due to tight building regulations in the Algarve, there is no threat of oversupply. When compared to property values across other competing markets like France and Italy or the Caribbean, our prices are still relatively low, especially outside of the 5* resorts. Portugal continues to be a very attractive option for buyers and we look forward to the next chapter!Kerstin Buechner Director QP Savills QP SAVILLSMarket ReportLegal ConsultantsDra Gabriela Neves AFC Tax Intelligence T: +351 289 310 620 E: gabriela@afc.ptNeedKnowTOIn this section of our Property Guide, we aim to provide you with important up-to-date information on procedures, legislation, tax, the Non Habitual Residence and Golden Visa regimes as well as many other topics. We hope you find this information useful.Dra Elia Apolo Elia Apolo Advogados T: +351 289 395 570 E: elia.apolo@ mail.telepac.pt Dr Josué Coelho International Law Office T: +351 289 887 440 E: josuecoelho@ international-lawoffice.comColourful sunshades in LouléWWW.QP.PT18Need to KnowQP SAVILLS • AN EYE FOR PROPERTY • THE BUYING PROCESSBuying Process if the Property is Held in a Corporate StructureSTEP 2 The buyer's lawyer will carry out the normal legal searches on the property and also carry out due diligence on the corporate structure. This will include checking the fees, liabilities, warranties, representation, history and legal procedures of the company. STEP 3 A Share Purchase Agreement will then be prepared by the buyer's lawyer and, upon signature by both parties, all the conditions of the transaction are secured, and a usual 10% deposit will be paid to the vendor, via the lawyer’s client’s accounts. STEP 4 This transaction takes place under the jurisdiction of the company’s domicile but can also take place under Portuguese or another jurisdiction connected with the parties, safeguarding the formalities applicable to the transfer of the shares/rights in the jurisdiction of the company’s domicile. STEP 5 The process is simply completed by both parties fulfilling the terms described in the Share Purchase Agreement and the buyers transferring the balance of the purchase price to the vendors, again usually via the lawyers. STEP 6 The respective management company will transfer the share ownership from vendor to purchaser. This process is usually quick, simple and in English.Buying a Privately Owned PropertySTEP 2 Once the due diligence on the property has been completed by the buyer’s lawyer, the Promissory Contract (Contrato Promessa de Compra e Venda) will be prepared, which needs to be signed by both the vendor and the buyer. STEP 3 With the signing of the Promissory Contract, the buyer pays a deposit to the vendor, normally 10%, and generally via his lawyer’s client’s account. STEP 4 The Final Deed (Escritura) is the transfer of ownership to the buyer, which is signed on an agreed upon date at the notary’s office. If buyer or seller cannot be present, then they can give power of attorney to their legal representative. STEP 5 The balance of the purchase price and associated taxes are paid and the transaction is completed. STEP 6 The buyer’s lawyer will register the new owner in the Land Registry (Registo Predial), and usually also changes all utility bills into the new owner's name.STEP 1 After finding a property and negotiating a deal, any good agent will prepare the ‘Letters of Intent’ for both buyer and seller. The LOI outlines all of the terms and conditions of the deal agreed upon during the negotiations. Both parties should appoint a local lawyer and the signed Letters of Intent are then sent to the lawyers representing both parties. The vendor's lawyer will then forward all of the property documentation to the buyer’s lawyer, who will then perform due diligence and prepare the contract. The agent will also prepare an inventory list, which is sent to the lawyers and attached to the contract. Due Diligence Before any purchase, due diligence is performed by the buyer’s lawyer and involves checking that all the paperwork of the property is in order and ensuring that there are no charges or encumbrances on the property. Additionally, if a survey is performed and a problem with planning arises, your lawyer will try to assess the situation and make his recommendations.The Buying ProcessThe buying and selling process in Portugal is uncomplicated and can be completed relatively quickly if the property documents are in order. For a private transfer of ownership, the process usually takes between 4 to 6 weeks and slightly longer if the transfer is via a corporate structure. QP SAVILLS • AN EYE FOR PROPERTY • PORTUGUESE PROPERTY TAXATIONWWW.QP.PT19IMT - Property Transfer Tax Paid on the acquisition of a property by the purchaser prior to completion. On properties for habitational purposes, the rate varies according to the purchase price. Specifically, for properties with a rateable tax value of over EUR 1m, a 7.5% rate applies. On rustic land, the rate is 5%, while on plots for building or other property types, the rate is set at 6.5%. This rate includes the acquisition of shares in companies that own real estate (where certain criteria are met), which now, in a change enacted for 2021, is also applicable to the acquisition of shares in corporations (i.e., entities formed as a “sociedade anónima – S.A.”). A 10% rate is also applied to properties acquired (directly or indirectly) by offshore entities which are included on the Portuguese blacklist. Stamp Duty, Notary and Registration Fees To be paid by the purchaser prior to signing the notarial deed and the registration of the property in the buyer’s name. Stamp duty is levied at a 0.8% rate of the sales price. Registration of the acquisition costs €250.00. Notary and lawyer fees vary depending on the value of the purchase and complexity of the deal. IMI - Annual Property Tax Payable in two or three instalments per year (depending upon the total value). This tax is fixed annually but can vary between 0.3% to 0.45% depending upon the council where the property is located. Loulé is currently taxed at 0.3%. The IMI for rustic properties is 0.8%. A 7.5% rate also applies where the property is held (directly or indirectly) by offshore entities which are included on the Portuguese blacklist. AIMI - Additional Municipal Property Tax Introduced in 2017, AIMI applies to the combined total rateable value of properties (VPT) of all properties owned by an individual. Up to the value of EUR 600,000 there is no AIMI to pay. For values between EUR 600,000 and EUR 1 million it is 0.7%. On values from EUR 1 million up to 2 million the tax is EUR 2,800 (0.7% of EUR 400,000) plus 1% on the value in excess of EUR 1 million. On values above EUR 2 million the tax is EUR 2,800 (0.7% of EUR 400,000) plus 1% on the value in excess of EUR 1 million up to 2 million plus 1.5% on the value in excess the 2 million. AIMI for corporate owned properties is 0.4% of the rateable value. Similarly to IMI, a 7.5% rate also applies to real estate owned by offshore entities which are included on the Portuguese blacklist. AIMI does not apply to non-urban properties and properties registered as commercial, industrial or service providing. Capital Gains Tax For non-resident individuals, CGT is levied at a 28% rate. Residents are not taxed on 50% of their capital gain and the other 50% is added to their usual annual income tax return. This tax is calculated on the difference between the sales price and either the purchase and/or construction costs of the property, (index linked) or its first ratable value (index linked), whichever is the highest. Costs can be offset against this tax including invoices of certain refurbishments, taxes, notary and registration fees as well as real estate agency fees. If the property you are selling is your main residence and you reinvest the proceeds of the sale within 36 months in an EU/EEA territory, you can avoid this tax. For non-resident companies, CGT upon direct disposal of real estate properties is levied at a 25% rate. The taxable basis is computed in a similar way as established for resident individuals. CGT also applies to resident companies, at rates ranging between 21% and 31.5% (depending on the applicable State and municipal surcharges). In any case, a reinvestment relief regime may potentially be applicable, which can limit the gains subject to tax (depending on meeting certain criteria). Depending on the specific holding of companies that own Portuguese real estate, Portuguese taxation on capital gains may or may not apply. Specific assistance should be sought from a legal and tax advisor. Inheritance Tax Between close direct relatives (i.e., spouses and direct descendants/ascendants), there is no inheritance tax in Portugal. On gifts, a 0.8% stamp duty based on the VPT must be calculated. Other inheritance or gift situations are subject to stamp duty at the rate of 10% of the VPT.PORTUGUESE PROPERTY TaxationHere we summarise the applicable taxes when buying, owning, selling or inheriting properties in Portugal.Next >