Overseas Mortgages: Buying Property in Portugal

Learn More About Buying Property with a mortgage in Portugal ...

Is it time to consider somewhere like... Portugal?

We have seen 3 bed property for just 38,432, With average property prices in 2003 increase by 12-18%. Some areas increased by 30% in 2003. Portugal has a rich cultural and historical background that has a great deal to offer foreign holidaymakers.

We can help secure mortgages in portugal in euros from native banks and lenders. Portuguese mortgages are available to overseas buyers and non-nationals.

Mortgages in Portugal

Once you have located the property of your dreams you may realise that you have not given sufficient thought to the financial aspects of the purchase or find that the price may require additional financing. Mortgages in Portugal are available from various Portuguese banks, Portuguese Mortgage lenders and other reputable sources, and as elsewhere, can be tailored to suit individual requirements and compared for their competitiveness.

A range of financing options is available for buyers with sufficient income to service a loan. For Portuguese residents, Euro mortgages can be obtained for up to 90% of the property value. For non-residents, mortgages are available in any major currency for up to 75% of the property value or purchase price.

Income Assessment

Income can comprise earned income together with pension, investment or rental income. However, it is not always the case that a lender will consider all sources of income when determining the maximum amount of loan available.

One should be aware of the fact that your application for finance will result in a variety of "additional" costs that will have to be borne. These range from the cost of a formal survey by the surveyors of the financial institution to whom you have made an application, to the fees for administration of the loan also. In addition there are likely to be a variety of other formalities.

Tax Implications

Whether you are emigrating, buying a second home abroad or investing in buy to let opportunities, purchasing abroad can have significant tax implications.

If property were purchased abroad for UK residents, then it would be taxed either in the country in which the property is purchased, or more likely taxed through the UK Tax System. If the property is for ordinary letting, then it would fall under Property Taxes, Schedule A, and all expenses would be deductible from the rental income, including a hundred percent of the mortgage interest. If the property for investment abroad was to be let out on the basis of holiday lets, then it would fall under Self-Employment, Schedule D, when on top of normal expenses incurred in connection with the property the investor would be able to claim substantial general overheads.

Capital Gains Tax would apply on the sale of any property abroad, as it would in the UK, with the same level of exemptions.

In every case of investment abroad it is advised that the investor seeks more detailed information from his, or her, Accountants, before proceeding with the investment.

Taxes & other costs - You should allow in the region of 10% of the purchase price for taxes, costs & fees.