Professional Real Estate Agents in the western Algarve
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B&P News and Views
What Today's Buyers Want
2017-04-05 21:18:14
At B&P we receive approximately 30 clients per week, 52 weeks of the year. From this volume of
clients we get a clear understanding of their wants and likes. These range from current fashions to standard features.

So what are these current trends and, if your property does not have them, what should you do?

The obvious ones are the same the world over. Modern stylish kitchens, smart bathrooms, good
showers and easy to take care of gardens.

Whilst most of these features are becoming standard in many of the new apartments coming to the
market, many of the older properties are still furnished in the dark solid wood fittings. Not only in the kitchens but throughout the properties including wardrobe doors and even main doors on the rooms. This style is one of the recent past where clients were looking for traditional Portuguese features. Be it the dark wood, the garish tiles or the old style extractor hoods, these are now seen as passe and the modern buyer looks at these properties with an additional bill to change if they buy the property.

Remember that following a 5 year recession the average buyer has changed by around 10 years. What I mean by this is the current buyer is around 45-55 years of age. We have almost lost a generation of buyers due to the crisis and the new buyers coming through have a much more
contemporary expectation on their purchase.

Smart modern laminate kitchens have replaced the dark wood or cherry wood finish. Induction hobs are preferred to gas in many cases. And light colours with neutral decor is a must for almost all clients these days.

So what do you do if your property is looking outdated or in need of a freshen-up? It will most
certainly have an effect on the time it takes to sell your property as well as the price you achieve. Many clients would neither want nor know where to start in refurbishing the property and tend to look towards a property where this work has been done or otherwise look at a new property. Just look at how all the new projects are selling out even before construction is complete.

Therefore you have three choices. One, you make the changes prior to selling and add to the price. You will certainly make the property more appealing but you need to take advice from your agent as the final price may not exceed your investment. Secondly, reduce the price to include the refurb cost or inform your agent that you would be negotiable based on your understanding that the property is looking dated. Or finally, do nothing and hope someone loves the property as you did when you bought it. This option could lead to a long wait.

In either event, speak with a professional agent and they can give you some sound advice. If you would like to discuss this subject in more detail and specifically about your property, either email me on mail@bpaproperty.com or call into the office.
Tax and Compliance
2017-04-05 21:09:25
Two headliners that never have, and never will, form part of a title of any blockbuster movie.

No entertainment value here; however, they both play out dramatic effects on our financial lives. Not movie-worthy: true, but to let it play out without following the script, we are at peril of losing. Creating an environment that promotes tax compliance wisely from the earliest stages is essential to improve tax compliance and reduce cost.

Tax can be an immediate event (withheld at source) or planned (capital gains tax) and the net outcome may have a serious effect on the bottom line. Combined with low interest rates suggest that, in real terms, any capital lodged with the bank is being eroded in real terms.

In the case of receiving a nominal rate of bank interest, Portugal levies a flat rate of tax of 28% and, where interest is generated outside of Portugal, it will be reported under the Common Reporting Standard to the Portuguese authorities simply by sharing your tax identification (fiscal) number. This 28% rate applies to all earnings from capital, be it bank interest, share dividends and even capital gains.

You should report your worldwide interest and gains, wisely and without fear. When you have income outside of Portugal, you have to consider withholding taxes and the effect of double tax or bilateral tax treaties whether you remit the income or not. Don’t forget capital gains tax!

A myriad of complex rules apply with options either to have the tax deferred to a time when capital gains tax rates may be lower or become mitigated completely, all in a compliant fashion to boot.

Pensions and life policies follow in the next article (or production, if we are approaching with the same analogy). These types of mainstream investment vehicles provide a long-term tax compliant shelter for nearly all earnings from capital and when set up correctly, deferring any personal assessment until such time that you need to draw income, capital or even loans in your own name. An excellent way to plan your tax liabilities come what may, and still recognised under life and pension regulation whilst at the same time adhering to the Common Reporting Standard.

Getting it right from the start means could mean far less trouble down the line. Providing a sensible implementation acknowledging that it is not a one solution fits all approach. For taxpayers it is now time to meet these obligations, gather your information to report your 2016 IRS. Your tax adviser should be in a position to understand where you can save tax wisely and report compliantly.

Your financial adviser’s involvement raises awareness focusing on long term tax planning, exploring and taking measures to try and ensure your financial stability.

All statements concerning tax treatment and their benefits are based upon our understanding of current tax law and practices both of which are subject to change in the future. Levels and bases of reliefs from taxation are also subject to change. This article is intended to provide a general review of certain topics and its purpose is to inform butNOT to recommend or support any specific investments or course of action.

Raoul Ruiz Martinez is a resident and independent consultant for Finesco Financial Services Ltd., Glasgow and advises clients on private financial matters in both the UK and throughout Europe under the MiFID regulation. Finesco Financial Services Ltd is authorised and regulated by the Financial Conduct Authority (FCA). Some of the services provided are not regulated by the FCA because they are not included within the Financial Services and Markets Act 2000.
Raoul has a weekly radio feature (Raoul's Rant) on the Owen Gee Solid Gold Sunday morning show on KissFM Algarve.
The Winter of Content
2017-02-20 12:01:15
The Winter of Content

With all the turmoil in the world at the moment from Brexit & Trump through to the French & German elections, refugees & terrorism it wouldn’t surprise anyone if the overseas property market was struggling.

However this is not the case in Portugal. 2016 saw unprecedented levels of growth, and here at B&P we enjoyed the best quarter 4 in our history.

So after such a buoyant end to 2016, you would again expect a slow start in 2017.

Seasonality has pretty much disappeared from our market; January for sure is slower than say September but not akin to the days where agents could pretty much shut up shop from November to March. I think we all saw how the summer holiday season smoldered on all the way to the end of November last year, which was clearly part of the reason for the superb quarter 4 results.

So as 2017 kicked in we were expecting a steady start to the year and in fact in terms of enquiries and viewings that was most certainly the case. However in terms of sales closed we saw one of the best individual months ever. If you look at actual days worked in January, the sales team closed a sale every 1.3 days, or put in terms of hours worked they closed a sale every 10 hours! This is extraordinary even in the world of B&P where we keep breaking records consistently.

So where has this rush to buy come from? The exchange rate most certainly wasn’t helping as it sat at around 1.15 for most of the month. Brexit is still making buyers feel insecure and NHR is looking less secure than it did 12 months ago.

All we can put it down to is the same reason as the holiday boom we are currently experiencing. More and more people are returning to Portugal for holidays instead of holidaying in Tunisia, Turkey or Egypt, meaning there is a huge influx of new or returning holiday makers. Some of these are helping with the increase as well as people who visited over the summer realizing how attractive Portugal is and what it has to offer. These clients are returning now to make their investments.

The same old reasons such as “would you leave your money in a bank?” or if you do "what level of return are the banks offering?” are helping clients make their decision. Some banks are actually talking about charging you to leave your savings in their bank in the near future and this is definitely having an impact! Unbelievable. Portugal still offers a fairly secure investment in terms of your holiday or in terms of bricks and mortar. Added to that, the beaches are some of the best in the world, cheap cost of living, fantastic food, amazing culture and huge investments in places like Lisbon & Porto. All these points are helping.

One further selling point is Lagos itself. We are seeing much more investment in the town. Of course we all want more but, compared to other cities, Lagos is looking superb. A strong Christmas period and an increasing number of events across the year are making Lagos a year-round resort.

Overall, we are experiencing the" Winter of Content!” The market is in a good position. If you have decided to sell then come talk to me! If you are considering selling now is a perfect time, come talk to me. If you are thinking of buying, come talk to me.

Either call in to the office, email me on mail@bpaproperty.com or simply give me a call on 00 351 282 764 193
Is the Algarve Sun Starting to Shine on Golden Visas?
2017-01-30 10:29:16
The Golden Visa scheme was introduced in 2012 and was seen by many as a fast track way not only to sell property to foreigners who wanted a European Visa but also as a get rich quick scheme for many would-be agents.

At B&P we looked at this scheme with great interest as our background had been property investment consultants and many of our partner agents from those days had jumped onto the band wagon and were looking for properties to sell. At that time we chose to back away from the scheme for two primary reasons:

1. We felt the way the agents were finding the clients was too lax and lacked integrity.
2. We felt that the Algarve did not offer what many of the clients wanted.

We are after all a holiday destination. If people were moving half way across the world, we felt they would expect the facilities offered by the major cities of Lisbon & Porto.

The legislation for the Golden Visa was also a concern. The vetting of clients appeared to be onerous and this came true in 2015 when the scheme was suspended following a really successful 2014 where around 1400 visas were applied for. The scheme was suspended while the authorities introduced further legislation to tighten the prospect of fraudulent applications and this led to the resignation of the Minister of Internal Affairs, Miguel Macedo. Following the lifting of the suspension, 2016 saw a rejuvenated scheme start to move forward with an estimated 2000 applications in the year. The total investment in this scheme since its launch totaled around 2.5€ billion.

In fact, SEF, the controlling body that manages this issue of the Golden Visa claim they can approve most applications in under 3 months!

Having said all of this and even with B&P achieving record year after record year since 2012, we had only closed around 3 Golden Visa sales.

Until the last few months!!! It appears although many of the Chinese clients prefer to buy real Gucci handbags rather than the choice section available on Lagos avenida; they are starting to realize what the Algarve does have in its favour. In addition to the Chinese, we have also sold to a number of Russian clients looking to relocate to a calmer environment.

That being said, there does need to be a minimum of €500,000 invested to gain the visa, not just for the investor but also for direct family members. In 2016 approximately 2000 investors made a purchase under the golden visa scheme resulting in around 3000 visa applications for their direct family members.

Because of this, and after another record year, we are now in need of high quality villas and apartments over the €500,000 price threshold.

If you have a property to sell email me at david@bpaproperty.com or call in to the office for a free consultation.
A New Year, A New Start….
2017-01-30 10:22:20
2017 is here. Your New Year’s resolutions are in full swing and yearly travel plans and holidays are being researched. Now as always it is time to predict, assign, keep score and possibly do some careful post-mortems of your financial life.

Yearly predictions are always difficult and 2017 is already up for grabs with the UK invoking Article 50 in March. Will le Pen win France and Merkel lose Germany? Trump and Putin? China’s currency and Venezuela’s default?

With all these big predictions in the air it’s easy to sometimes to forget the basics of your own financial life. Boring as it may sound, household budgets are important.

With the intent of avoiding to sound patronising, let’s start with the basics and ask yourself “What is the use of a budget?”.

When done properly it is the best measure to analyse your finances beyond compare. In fact, it answers two key questions that haunt us all through our daily lives: -
(1) Do I really spend more than I earn?
(2) What can I afford?

Let’s look at each of these in turn.

(1) You will have a sense when you are either building up personal debts or eating into your hard-earned savings that you will already know you are overspending. To solve any such situation for you or your loved ones, the key here is to get a more precise evaluation of the size and severity of the issue. I cannot help but repeat the exert from the Charles Dickens’s character Mr Micawber in the novel David Copperfield:
“Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”
(2) As soon as you really do know what you are spending, only then can you make a start on prioritising your spending and living within your means. The challenge isn’t just analysing your budget – it is to learn to stick with it.
After you acknowledge the shortfall and challenge to balance your daily budget, you cannot simply then focus on a month-by-month basis in complete isolation of what it means on an annual or even 5-year basis. This is because each month does not consider those annual one-off costs such as holidays, Christmas, the replacement of white goods or a car every 5-10 years. In fact, a car is a classic example of how your money can disappear quickly since not only (aside from collectibles) does the value depreciate as time moves forward, you have the additional costs of fuel, insurance, servicing, etc.

Conclusively the way you plan your budget needs to be as important as what you put in it and should be checked on an annual basis.
There are plenty of free online budget planners you can utilise. If you are already employing an adviser or business manager, they should already have built in in their objective opinion and expertise on an annual basis, at the very least.
If the results of your budget analysis prove that you are overspending, then you need to look where you should be cutting back. Here you are looking at some short-term pain for the longer term gain.
A strong healthy household budget is one less thing to worry about and an excellent foundation/position to commence your economic predictions for the year ahead.

This article is intended to provide a general review of certain topics and its purpose is to inform but NOT to recommend or support any specific course of action.

Raoul Ruiz Martinez is a resident and independent consultant for Finesco Financial Services Ltd., Glasgow and advises clients on private financial matters in both the UK and throughout Europe under the MiFID regulation. Finesco Financial Services Ltd is authorised and regulated by the Financial Conduct Authority (FCA). Some of the services provided are not regulated by the FCA because they are not included within the Financial Services and Markets Act 2000.

Raoul has a weekly radio feature (Raoul's Rant) on the Owen Gee Solid Gold Sunday Morning Show as well as the Money Minute programme on the weekly Si Frater’s Breakfast Show, both on KissFM Portugal.
Happy Christmas from all at the Belo Efeito Group
2016-12-21 13:55:47
B&P celebrate 10 year anniversary

B&P Real Estate Agency celebrated our 10 year anniversary in December at Dom Henriques restaurant and DH cocktail bar in Lagos.

The event had a high turnout from the many agents, lawyers, constructors and developers as well as suppliers and partners in and round the Western Algarve.

Starting off as Investment consultants our group has developed and grown over the years.

The group now comprises of 3 main businesses, B&P Real Estate based in Lagos and Lisbon, Resort Rentals which manages and rents around 165 properties in the Western Algarve and Lagos Long lets which is the only bespoke residential letting agent in Lagos.

B&P was set up in 2006 by myself following my experience at both Vigia Group, Parque da Floresta & Praia D’el Rey where I was Sales & Marketing Director.

Over the last 10 years, we have developed from 1 person to around 20 direct employees and are still growing with capabilities to provide excellent hands on service for sales, property management and rentals.

If you are looking to buy, sell, rent for long or short term, or have a property to let, please contact us on mail@bpaproperty.com and we will be happy to assist.
Time to Sell...
2016-10-25 16:11:10
The last few months have been a little bit unsettled to say the least.

Following Brexit the UK market was sent into turmoil with buyers getting no assurances from the UK government on how cross bordering will affect foreign home owners. This seems to be now settling down but will take some time before confidence is fully resumed.

Another area of impact has been the exchange rate with the Pound versus the Euro dropping to around 1.10 euros to the pound as I write. Of course for UK buyers this is not ideal; however there is always a silver lining and that is for UK vendors.

The market as mentioned in previous articles has been bolstered by a huge increase in buyers from Scandinavia, France, Belgium and various other locations where buyers are realising that Portugal offers much more than just sun and sand. A relatively cheap cost of living, a much slower pace of life coupled to a much safer environment to live has raised the profile and indeed the number of sales from these countries. This has resulted in a record month in September for B&P where we sold a property every working day across the month!

This has meant there is again a shortage of good properties for sale.

If you are a UK home owner here in Portugal, now could be an ideal time for you to sell.

If your home is valued at €200,000 and you sell today, you would receive approximately £180,000. If you sold pre-brexit, you would have received £153,000. That is an increase of around £27,000.

There are plenty of Scandinavians, French, Belgian and many other European buyers waiting to view, offer and buy your property, so now may be the best time in the last 2-3 years to sell your property.

If you would like a free valuation or would like to put your property on the market, either email me on mail@bpaproperty.com or simply call in to the B&P office on the avenida.
Property Sales and the Web
2016-10-19 16:58:26
We bought B&P back in 2011. The recession was at its worst and friends & colleagues thought we had lost the plot when we announced we were buying the ailing agency here on the avenida. Resort Resales had been relatively successful at our Luz office, being the only bespoke resort property agency in the western Algarve. The move to become a mainstream estate agency was a risky move at that time.

On taking over the office we immediately started work on re-building what was a tired brand and office.
The website we inherited had a Google ranking of 74 (eighth page of Google), an outsourced database management system and a website that hadn’t been updated in around a decade. This was resulting in low levels of enquiries, low visibility and when found a less than positive image of our offering.

Over the next 10 months, apart from smartening up the actual office, we invested in new logos and branding, new back office system and window designs. The website was completely replaced with only the web address www.bpaproperty.com retained.

By the end of this period we had a state of the art website that had achieved first page on Google status and in fact had an average Google ranking of 5. This has over the last 4 years developed to 3 and is only consistently beaten by Rightmove and being the highest Google ranked agent in the Western Algarve!

The website increased its performance in a number of areas:
Number of hits increased by almost 600%
Number of pages viewed increased by almost 400%
Duration on the site increased by almost 700%
Total pages viewed per visitor increased by almost 1000%
This resulted in final closed sales increase of 3400% 2010 vs 2015
All in all this is a great success story of which we are immensely proud.

As for our rental and management business, again this area has seen huge growth. Since its conception in 2009 this business has grown from a side business looking after around 10 personal client’s properties to a rental & management company of approximately 165 properties. In 2015 the business handled around 1150 holidays. The support systems being used were fine when we had 10 units, but as we grew we were starting to feel those growing pains and knew drastic action needed to take place.

In the world of Holiday Rentals, Real Estate and IT you can never sit still.
Because of that in 2015 we commissioned Creation Media, a Lagos based Web Design, & Business Management Solutions Company to redesign both the portfolio of websites as well as a data management system that could handle our company’s size & depth.

We have recently launched our new websites for sales & rentals. These sites incorporate Resort Resales & B&P, including the new B&P Lisboa. The rental site incorporates Resort Rentals, Lagos Long Lets as well as our owner log in areas. All the websites are responsive, meaning improved accessibility and readability on smart phones and tablets.
The new back office system has allowed us to automate many of the manual tasks previously handled by our admin team, improving response times and workloads. Our field property managers now work off tablets, again improving response times and communication with our owners.

The rentals side of our business is currently being automated, improving not only response time to holiday enquiries but also payment and confirmation times.

Upgraded newsletters for both sales and rentals are designed to increase our accessibility to potential clients and keep current potential clients fully aware of offers, new listings or price movements.

Overall we believe this new system will allow the group to continue to grow, continue to offer our customers the highest level of IT service and our owner clients a speedier and informative level of information communication.
We welcome you to visit our new website and would be happy to receive any comments or reviews of your B&P or Resort Rentals experience.
Residency in Portugal - Part 3: Dual Residence and Non Habitual Residence
2016-04-14 09:52:35
This is the third and final article in a 3 part series on Residency status in Portugal

Dual Residence

Because residence is broadly defined, most double taxation agreements recognize that a person could meet the definition of residence in more than one jurisdiction – dual residence – and provide a “tie breaker” clause to eliminate double taxation. Such clauses typically have a hierarchy of three to five tests for resolving multiple residency, typically including permanent abode as the major factor. Tax residency rarely impacts citizenship, although a country's immigration laws may influence tax residency.

Nearly all tax treaties provide some mechanism under which taxpayers and the jurisdictions can resolve disputes. Generally speaking, the government agency responsible for conducting dispute resolution procedures under the treaty is referred to as the competent authority who generally have the power to bind their governments in specific cases.

Individuals who could be caught in the trap of dual residency and double taxation are retirees with a second home in another state; taxpayers who live in one state but have business activities or interests in another; individuals who have relocated to another state but return after a number of years; individuals who temporarily relocate overseas for a job assignment, and individuals who have severed all ties with a state but fail to establish residence in another.


Regime for Non-Habitual Residents

Foreigners and returning Portuguese emigrants who settle in Portugal may be eligible for this status. The “non-habitual tax resident” may be allotted a flat 20% tax rate on Portuguese and foreign source employment and self-employment income. To qualify, this income must arise from scientific, artistic or technical activity as defined by the Finance Ministry.

The Non-Habitual Resident may also be exempt from assessment on various forms of income originating outside Portugal if such income is subject to taxation at source under the terms of a double tax treaty and does not involve designated tax havens. However, exempt income must be declared for the purpose of establishing the tax rate to apply to other income.

The NHR regime requires only a potential liability to taxation in the source State under the rules of a tax treaty or of the OECD Model Tax Convention. After your registration as a Non-Habitual Resident in Portugal, you must request an International Certificate of Fiscal Residence from the Portuguese tax authorities. This document then has to be sent to the tax authorities in the income source country. In principle, this should enable you to be exempt from tax in that jurisdiction.

However, this narrow interpretation is not necessarily shared by all tax authorities around EU. In the Netherlands, for example, the NHR status is under hostile attack from the Belastingdienst with Portugal accused of being a “Tax Haven” within Europe. Under current practice, withholding tax exemptions that were formerly granted without difficulty are being systematically rejected by the Dutch tax authorities.



by Dennis Swing Greene
Chairman and International Tax Consultant for euroFINESCOs.a. eurofinesco.com

This is the final article in a 3 part series on Residency status in Portugal
So who is buying property in Portugal this year...?
2016-04-14 09:47:05
Once again we are seeing a wind change in the property market. Over the last couple of years the French market has been dominating not only the space in magazines but also keeping most of the estate agents busy, however, we are starting to see a step change this year.
In 2014 & 2015 the French market grew from almost zero through to almost 25% of the market. The number of French registration plates on our roads was as good an indicator of how many French were spending time here as any.
Well the number of cars hasn’t subsided but the number of enquiries has started to level off. This is clearly down to an increase in the number of agents promoting to French clients but it is also down to the fact that the rush has now become a steady flow of clients.
Having said that here at B&P we are experiencing another fantastic year and are currently running at over 30% up on 2015. So what is driving this increase?
In a normal year we sell to an average of around 15 different nationalities. This year is no different and at the close of Q1 we have already sold to French, Belgian, American, German, Swiss and of course to UK & Irish buyers. But the new rush is coming from Scandinavia.
The Scandinavians have been buying for a few years but it is only this year, 2016, that we have started to see a definite consistency to their buying patterns. Swedish buyers in particular have been looking for a few years. Their buying style is different to that of the French. The French would come with cheque book in hand. They would want to see a wide number and style of properties but once they were here they usually bought. The Swedes have a slightly different approach. Most prefer to do a lot more homework. They want to make several visits to the property and rarely make a quick decision. They also appear to have higher budgets and are looking for penthouses and sea view apartments as well as 3 & 4 bedroom villas.
Don’t expect to get an offer within hours of viewing your property. It can take several weeks and in some instances a month or so before you hear back from them. This is their nature. They like to consider their purchase, weigh up the alternative properties and be ready to move when they decide.
The Scandinavian market was running at around 15% of our business over the last 2-3 years however we have seen this grow to around 25% in the last 6 months. I see this market being a little longer than the French rush of 2014. Swedish clients in particular tend to follow each other. So the increase we are seeing is just the beginning. For sure the Swedish clients are more demanding than the French and most certainly take longer to decide but this market is here to stay. So expect to see a few more Volvo’s driving around the western Algarve this winter.
This increase in sales we are experiencing means we need new properties to sell. There is a shortage of top floor apartments, sea view apartments and mid-range villas on the market. If you have been thinking about selling your property now is the time. Please contact me at the B&P office on the avenida or email me at mail@bpaproperty.com
Residency in Portugal - Part 2: Non-Residents
2016-03-07 17:43:06
This is the second in a 3 part series on Residency status in Portugal

NON-RESIDENTS are taxable on income and gains within Portugal. When the paying entities are resident or assets located within or services performed in Portugal, then the following examples of income would need to be declared:
- Local rental income;
- Holiday lets
- Capital gains on sale of Portuguese shares;
- Capital gains from Portuguese property sales;
- Fees from scientific, artistic or specialised services;
- Administrator/director’s fees from resident companies;
- Domestically-sourced pensions;
- Lottery winnings.

Employers should deduct income tax at source on earnings. This withholding is final, unless governed by specific treatment under a Double Taxation Treaty. On all sources of income, proof of tax paid is required when transferring the proceeds outside of Portugal.

Question: I am only a visitor to Portugal (less than 6 months per year) but rent out my flat to holiday makers when I’m away. Do I need to declare this income in Portugal, even though I report it back home?

euroFINESCO: Yes. Your first obligation is to settle up with the tax authority in the country where the income is generated. As such, non-residents are taxable on letting income arising in Portugal. If you conduct a local lodging business (short-term furnished lets to holidaymakers), your income is reported in Category B, Self Employment. As a Portuguese-based business activity, it may not need to be declared in your home jurisdiction as per the prevailing double tax treaty. You should consult with the applicable double tax treaty.
If you practice long-term rentals, this assessment should be eligible for an international credit in your home jurisdiction, once income has been declared and tax paid in Portugal. Be aware of new procedures as of 2015.

Non-Residents and Fiscal Representation
Non-Residents sometimes wonder why they need Fiscal Representation. First and foremost, for non-EU citizens, it is a legal requirement. Any non-EU citizen owning property or with income arising in Portugal must designate a resident entity to serve as Fiscal Representative to fulfil all compulsory tax obligations.

For European Union and European Economic Community citizens, Fiscal Representation became optional in 2012. Despite the formalities, Non-Residents will continue to need competent professional assistance to take charge of their compliance requirements, keeping them informed and backing them up in a foreign land where you can easily be vulnerable.

Non-Residents need support to make the most of their life in Portugal while helping them to pay the legal minimum of tax. Whatever the situation today, we are confident that you will find welcome collaboration in Fiscal Representation for cost-effective solutions to meet on-going prerequisites in Portugal.

by
Dennis Swing Greene who is chairman and International Tax Consultant for euroFINESCOs.a.
eurofinesco.com

Next: Part 3 - Dual Residence and Non Habitual Residence
What has gone and what is coming?
2016-03-07 17:41:01
So 2016 is now well under way. After a record breaking 2015 we came into the year half expecting things to calm down a little. That has not been the case so far. Both January and February have exceeded 2015 achievements by approximately 20% and enquiries are reflecting the same. Lagos & Luz feel busier than ever, even though we have had some very inconsistent weather.

So what are we expecting from 2016? From a sales perspective I believe we will see a consolidation year. 2015 was extremely busy fuelled by the NHR market through the Scandinavian and French markets. I honestly believe that sales trends come in waves and the French revolution was always going to be a 5 year wave. Believe it or not we are in to the 4th year of that 5 year wave and we are already seeing a calming of the French market. Of course there are still plenty of French buyers but budget levels and numbers have dropped slightly. This I predict will continue until we get a more even and normal French overseas market. We are already seeing a churn in terms of buyers from 2013 and 2014 selling and upsizing. The Scandinavian market is still going strong and in 2016 we have already seen an increase in both enquiries and sales from this region.

When any market improves naturally new players come to the market to capitalise on this growth. Lagos has seen at least a couple of dozen new players enter the market trying to “get in on the action”. Whilst competition is always good for business and I welcome new competition; some of these players are only here for the short haul. Some of the more established agents such as B&P have been trading for many years through thick and thin and offer a history of professional trading and a successful track record. I think we will still see more new smaller players enter the market but the experienced agents have invaluable knowledge and experience.

With all the negative events taking place across Europe and the Middle East, Portugal is cited as a hotspot for holiday makers this year. 2015 saw a 30% increase in pure holiday numbers for Resort Rentals. I am forecasting a further 30% increase in 2016 meaning we will handle almost 1500 holidays this year. The biggest challenge is to secure more quality properties for holiday rents for both 2016 & 2017. We are actively looking for new modern stylish properties to add to our portfolio.

2015 saw our newest venture “Lagos Long Lets” grow from a small additional interest to a business in its own right. We have around 2 enquiries a day for long lets every trading day of the year. This demonstrates how strong this market is. The weak area is the number of rental properties. Long term letting offers a great investment for landlords. For more information email raquel@resortrentalsalgarve.com

As an overview, I believe 2016 will be an eventful year. Property sales will consolidate with the new markets calming down. Holiday Rentals will continue to grow and residential letting to overseas clients will develop as quickly as the properties become available. So hold on to your hats for another fantastic ride in 2016!
Residence in Portugal Part 1: Residents
2016-02-16 00:00:00
This is the first in a 3 part series on Residency status in Portugal

Increasingly, countries challenge former residents who attempt to move to another. Although the rules vary, most states define a “resident" as an individual who is in the state for other than a temporary or transitory purpose. Countries consider a person’s “residence" or home to be the place of his or her permanent home to which he or she intends to return to whenever absent from the state for a period of time. Most claim the right to tax an individual’s income if they are believed to be a resident. Usually, they also impose tax on 100% of a resident’s income from all sources, including investment portfolio income.

Resident individuals are taxable on income and capital gains wherever arising worldwide (except for those with Non-Habitual Resident status) and not on a remittance basis (where taxation is based on income actually received in Portugal) as occurs in some jurisdictions. Unlike the “Residência” (the Residency Permit issued by the Foreign Office or your local Council) residence for taxation purposes is factually determined. Individuals may be deemed to be tax resident in the following situations:

- When physically present in Portugal for more than 183 days in a calendar year; or
- When physically present for less than 183 days but have fixed a permanent physical home in Portugal by 31 December; or
- If, at the end of a tax year, owning a dwelling in Portugal that might reasonably be considered their habitual residence, individuals are generally considered to be resident in that tax year; or
- If the head of a family group is resident in Portugal for tax purposes, other immediate family members are normally considered to be resident, even if living separately. However, if the foreign country has a tax treaty with Portugal, the treaty contains rules to determine residency. Residence qualifications may be modified under the terms of Double Taxation Treaties.


Question: When is a foreigner considered resident for tax purposes?

euroFINESCO: It is important to distinguish between a Residency Permit (“Residência”) and Fiscal Residency. The former is a documented status. The latter is circumstantial in nature. Individuals are deemed tax resident when they meet any of the criteria detailed above.

If you do have a “Residência”, you are deemed to be resident whether physically present or not in Portugal. The Estrangeiros office now insists that non-EU residents present IRS tax declarations for “Residência” renewals as does Finanças as proof of your status.


Question: I am “pay-as-you-earn” in the UK and haven’t filed a tax return in years. Do I have to declare in Portugal?

euroFINESCO: In the 2015 tax year, all residents are required to submit a tax return with the exception of those with earning falling below €8,500.

No IRS income tax return can put you on the wrong side of the law and vulnerable to undesired consequences from the authorities. Perhaps it is better to turn the question around: Do you have a valid reason for not obeying the Law? If you are renewing, you will not be able to update your “Residência” without one.

Dennis Swing Greene is chairman and International Tax Consultant for euroFINESCOs.a.
eurofinesco.com

Next: Part 2 - Non-Residents
How to plan your holiday home purchase... parte deux
2016-02-16 00:00:00
How to plan your holiday home purchase... parte deux

Following on from last month’s feature on how to plan your purchase to gain maximum success, I have detailed some of the things you need to consider once you have found your perfect home in the sun below.

Firstly, once the decision has been made you always need to instruct a lawyer. Portugal does not have some of the legal issues that you may have heard of in Spain or other European countries, due to the bureaucracy behind planning and legality of construction. For once the bureaucracy works in our favour! Having said that, I recommend always using a lawyer to process the purchase. The lawyer will charge you 1% + VAT of the final purchase price; you need to build this in to your final and total cost of purchase. The lawyer will ensure that the property is correctly and legally registered. They will also ensure that there are no debts, liens or charges against the property and will advise on any mortgages that are on the property. The Portuguese notary system will ensure that all of these will be cleared prior to you actually signing for the property. In the first instance the lawyer will produce a due diligence report, in your language. This report will inform you of the legal status of the property, the ownership, fiscal position and, if necessary, the lawyer will advise on any potential building developments nearby. Finally, all the purchase details such as the price and any agreements you have made with the vendor will be documented.

The lawyer will ask you to confirm you are in agreement with the details in the due diligence report and will then produce the first contract the “Contrato Promessa Compra e Venda” (CPCV). This document sets out the agreement and terms applied. This is a legally binding document and is signed by both parties; vendor and purchaser. If either party decides not to proceed after this point there will be heavy costs. The seller will have to pay the deposit back in double and the purchaser would lose the deposit paid. The deposit is usually 10% of the agreed sale price. It can be higher but this is the norm.

Once everything is signed, the sale can proceed to the final deed. This normally takes place 4-6 weeks following the signing of the CPCV and will be signed at the public notary office. At this stage the full value of the property is paid plus taxes.

The taxes work on a sliding scale dependent on the price of the property. However as a guide you should prepare yourself for around 6% of the agreed purchase price, plus the 1% lawyer’s fees.

Following the signing of the final deed the lawyer will continue to work on your behalf. All the names on the land registry, utility companies, and condominiums need to be changed into your name. This can take a few weeks.

Money transfer – if you live in Portugal then payment is very easy as you would simply ask your bank to make a transfer in the normal way. If you are in France, Germany, Spain or any other Euro zone country; again, this should be straightforward. If you are outside of these areas such as the UK, Scandinavia or the US you should consider using a Foreign Exchange company to assist with your transfer. These companies do not charge you anything and can save you several thousand euros on larger purchases compared to international bank transfers!

Furniture – this is the best part for many. Choosing the style and ambiance of your new property enables you to design in a different way than you would at home. Indoor / outdoor living is key to enjoying your property to the fullest. Light and bright furniture may not suit you in the dark winter in the UK but here in Portugal where the sun shines all year round you may choose something completely different to your norm. To assist you there are a range of companies offering everything from budget furniture packs through to high end ateliers offering full interior design services. My advice is to shop around and choose the way that suits you best.

At B&P we assist on the full process. We can advise on a panel of superb friendly, multi-lingual and efficient lawyers, competitive money transfers and a furniture companies.

We believe that it is not just about selling you a house it’s about helping you make the biggest investment outside of your main home. This we take seriously and offer professional advice in an experienced and knowledgeable way.

If you have any questions or queries relating to your potential purchase please contact me on david@bpaproperty.com
IRS Tax Credits: Have you checked your invoices? by Dennis Swing Greene
2016-01-16 11:23:41
In the old days, the watch word was: “Factura, se faz favor”. Following the tax year, you would add your bills into the proper categories to complete your annual “IRS” return. Now the system works “semi-automatically”. Let’s look at what’s needed under the new system and where some of the pitfalls lie.


Will IRS deductions be pre-filled in your online declaration?

Yes. Based on the data generated by the e-billing system, online IRS's forms will now include the fields of registered expenses that have been completed. The system works like this: When you ask for an invoice with your tax number, the merchant communicates this data directly to the Tax Authority (AT). This information is then added to your page on the Finanças Portal. Each expense (health, education, restaurants, family, overhead, etc.) is allocated as a credit to your IRS. You have no need to add up invoices because the work has already been done for you. However mishaps can occur; invoices may be missing. So the data must be checked.


Are all invoices registered by the tax authorities?

That's the idea. However, there may be problems in the communication of invoices. First, the taxpayer must ask to have their tax identification number (“NIF”) to be included on the receipt. Then the merchant reports the transaction to the Tax Authorities. The bill must be appropriately “classified” by the type of expenditure because not all are of equal worth when calculating tax credits.
You need to check that invoices are correct on your page and have been inserted properly. If some are missing, you will have to register these invoices (note that merchants have until the 25th of the month following the issue of the invoice to do so) or properly allocate invoices (the AT may not have allotted a given expense to the right category). This verification must be done by the taxpayer prior to 15 February 2016.


Which expenses can you use?

Theoretically, just about everything, but with limits:
a) General family overheads: this category has with a maximum credit of €250. To reach this level, you must spend €715 a year.
b) Health expenditures can discount 15%;
c) Education is worth 30%;
d) Housing credit on interest and rents can also count on up to 15%;
e) Tax incentives can give partial tax relief for certain expenses such as:
contributions to retirement plans; medical insurance; donations to charities;
f) Alimony and child support payments are allotted 20% tax relief;
g) Nursing facilities and home care expenses up to 25%;
h) 15% of VAT paid in restaurants, hairdressers and car repair shops up to €250.

The amount of your total credits also depends on your level of income. Lower earners have a higher ceiling.

Note from the author: Parenthetically, wouldn’t a simple “standard deduction” as is used in the USA or a comprehensive “personal allowance” as in the UK make life much easier and be more cost effective for everyone, including the tax man, rather than this baroque bureaucratic jumble? Isn’t it time for a renewed “Simplex”?

What happens to those without internet access?

Currently, almost 90% of the 5 million IRS declarations in Portugal are reported electronically via internet. Of the remaining 10%, half of these households do not pay IRS because their income is too low. The remaining 5% of taxpayers who do not have internet access can either get help privately or seek assistance at their local Finanças office.

Dennis Swing Greene is chairman and International Tax Consultant for euroFINESCOs.a.
How to plan your holiday home purchase
2016-01-16 11:05:27
Once the decision has been made that a home in the sunny Algarve is something for you, there needs to be a certain amount of planning before you start your search. Property sales have improved significantly over the last couple of years to a stage where if you see it, you need to buy it. You cannot procrastinate for weeks on end, like you could have during the depths of the recession.

So what do you need to prepare prior to your visit?

Finance – Firstly, decide on your budget and stick to it. It is very easy to get carried away and overstretch yourself. Agents will always present you with a couple of options just outside your budget just in case you can stretch but you need to be strong!

Property type - This can be flexible. The dream may be a large villa with pool overlooking the ocean, however, this may not fall within your original budget. You may need to decide what the priority is. View, property or location. In some instances you can have it all, but at a cost. Therefore you may need to choose which is most important for you. There are many choices around the Western Algarve from walled and gated condominiums through residential apartments through to stand alone villas. The choice is yours.

Agents – This area can be a mine field. Agents split into different categories. There are portal agencies which do not have many or in some instances any direct listings. They simply advertise properties listed by the local agent and then pass you to this agent once you have expressed an interest to view. You then have National Agents which in the western Algarve tend to cater for the residential market. And finally, local high street agents. These agents are usually the most knowledgeable about the area and the properties. The choice is yours and within the final category there are probably a handful of primary agents supported by a large number of smaller agents.

It may seem sensible to try and deal with as many agents as possible so that you don’t miss anything that could be your potential dream home. However things work a little differently in Portugal. Most properties are listed on a multiple agency basis. This means that there is no limit to the number of agents that can list one property. Therefore you will find that the larger agents will usually have almost every property on their books or the ability to list for you. It is sometimes much easier to choose one agent and stick with that agent. It allows the agent to fully understand what you are looking for and your likes and dislikes.
It also allows you to spend more time looking for the right property rather than explaining this 3 or 4 times to different agents.

Agents as in life come in all sorts. Some good some bad but overall the Lagos agents offer a pretty good standard of service. My advice would be to choose one you are comfortable with and stick to it.

The final area is to do your homework. Decide on the above: Budget, property type, agent to use and finally, book your viewing trip. You need to do this at least a couple of weeks in advance. You can book earlier but there is no guarantee the properties you are interested in will still be available.

Once you are here there will be a lot to do. From money exchange to lawyer to furniture. All these will be covered next month.

For further information or assistance you can contact me directly on david@bpaproperty.com or call into the office.
How to pay taxes in instalments by Dennis Swing Greene
2015-11-16 10:27:11
Taxpayers can pay the IRS and IRC levies in installments if they feel they can not rectify their tax situation within the prescribed period. These two taxes allow for a phased payment plan under certain conditions.


1. When can you ask for payment in instalments?

Taxpayers can request payment in instalments within 15 days after the deadline to pay the tax voluntarily but before the establishment of the executive process that can lead to the seizure of assets. However, to qualify, one must not have any other fiscal related to other taxes. Late interest is still due on the outstanding amount in debt.


2. How is the request done?

Applications may be made electronically on the Portal of Finance or in person at the local tax office where the taxpayer is resident.


3. How long will Finanças take to respond?

The head of the local Finanças Office must issue a decision on the case within 15 days of receipt of the request.


4. Does the taxpayer have to give a guarantee?

Not always. For debts are up to €2,500, the taxpayer is exempt from the provision of providing collateral. When the value of the debt exceeds this amount, it is mandatory to have a bank guarantee. Alternatively, you can use a guarantee insurance done by a legally authorized insurance institution or by a mortgage.


5. In how many instalments can you pay?

When no guarantee is required and for debts up to €355, the taxpayer is required to settle the amount in a single payment. For debts between €1,068-€2,500, the debt may be paid in a maximum of six instalments. In the case of a required guarantee, the taxpayer can pay in up to a maximum of 36 instalments.


6. Is there a minimum amount for each payment?

There is no minimum value but the number of instalments must be completed as defined by law.


7. What happens if an instalment is not paid?

If the taxpayer fails to pay any of the instalments, the Tax Authority establishes a tax lien for the amount owed that can lead to the seizure and sale of assets.


8. Are these conditions also valid for businesses?

Yes, but only for IRC debts up to five thousand euros. In this case, the maximum number of instalments is six. If the company has to provide collateral, it can settle the amount requested in up to 36 instalments.


9. If Finanças has already issued a demand, can I still pay the debt in instalments?

Yes. However, this requires a guarantee whatever the amount. The number of instalments should not exceed 36 and the value of these can not be less than 102 euros. Since it is established that there is a case of extraordinary financial hardship and economic consequences for debtors, the payment period may be extended up to five years if the debt exceeds €51,000. In this case, an instalment may not be less than €1,020. If there is an economic recovery plan, the payment may be extended to twelve and a half years if the debt exceeds €51,000. Instalments may not be less than €1,020.

Dennis Swing Greene is Chairman and International Fiscal Consultant for euroFINESCOs.a.
Why long lets are more popular than ever...
2015-11-16 10:21:44
You may remember that last year we launched the Lagos Long Lets website. This was in response to a rapid increase in demand in long term rental enquiries for high end properties. This side of the business has gone from strength to strength and is now the most visited website for long lets in Lagos and our reputation is spreading as the place to go for a long term rental.


Who are the clients?

Generally overseas clients with healthy budgets and good taste. Long term rentals are frequently, but not exclusively, for clients seeking Non Habitual Residency enabling them to live in Portugal and claim their pension tax free. These are usually Swedish, Finnish, French, and to a lesser degree German, Dutch and Belgian. They tend to be mature, respectful of the properties and do everything correct and by the book. They are only required to be here for a minimum of 6 months per year (often returning to their “summer house on the lake” or back home for extended periods) but need a contract which projects continuity, so a minimum of an annual renewable contract.

Then we have the winter lets, anything from 6 weeks to 6 months through the quieter low season for clients dipping their toes in the water before committing to a year or the kind of clients we had before the days of NHR – again retired but more likely Brits, Germans or North Americans looking to escape the rain and cold.

What type of properties are we looking for?

Virtually everything we list gets let, recently before it even hits the website or the window display. But then we are only interested in listing quality product for rental. If the typical client could tick every box on their list it would be high spec, sea view, walking distance to the centre of Lagos, garage, quiet, not isolated, heating, A/C… but a combination of a number of those features works too.


What are the taxes which the property owners need to pay?

For each new contract registration, owners pay a stamp tax. Secondly, there is an annual income tax bill to pay. New this year is that nearly all related expenses incurred in conducting the rental activity, including now the agents commission, are now deductible, bringing the tax down. And the property tax (IMI) remains the responsibility of the owner to pay.


What about licenses?

For long term rentals you do not need the Alojamento Local (AL) rental license which is required for short term holiday lets. However, legislation requires that the property has an energy efficiency certificate.


Which generates the most income, holiday rental or long term rental?

It really depends on the property and your own personal use of it. If it is already earning well through the summer on holiday rentals, you might just leave that and look at catching some winter lets. But if it is costing you nearly as much to run the house, why not have someone else pay that for you?

So if you can live without your property for a year or two in exchange for a regular income, contact Lagos Long Lets in the B&P Real Estate office, info@resortrentalsalgarve.com, 282 77 11 32 and speak to either Victoria Johnson or Raquel Rodrigues.
Landlords and IRS by Dennis Swing Greene
2015-10-08 10:43:34
The IRS Reform law has brought substantial changes on taxation of rental income for landlords. The following highlights punctuate the principal modifications in the law. In fact, the premise for allowable relief from assessment has been brought into line with the principles and practices of other member states throughout the European Union.


A) Category F - New basis for deductible expenses

If you choose to be taxed under category F, the income from rents, net of allowances, will normally be subject to IRS at a separate rate of 28%. Most necessary expenses incurred in conducting the activity ? not just maintenance and repairs as before ? are now deductible. This means that the agent’s costs are now covered. Note that expenses for building contents (furniture, household articles, comfort or decoration) are not eligible.


B) Landlords can choose to be taxed by Category B (as business income)

Until now, when calculating income tax, landlords could only declare the proceeds from long term letting of property in Category F (rental income). With the “IRS” Reform in the 2015 Budget, landlords are now able to declare as a business and be taxed according to the rules of Category B (Sole Trader business income).

The legislation provides that, in either case, the basis for assessment is identical: rental income is only taxable on net income after subtracting allowable overheads. In other words, landlords have the option to deduct all expenses essential to the exercise of the activity to determine their net income and apply the Category B tax rates.

Keep in mind that beyond income tax under IRS, “business” income from Category B is also subject to VAT when it exceeds €10,000 per annum. Category F remains VAT exempt.
What then is the advantage of opting for taxation of Category B or Category F? Proceeds from the Category B can be aggregated with other sources of income and taxed at marginal rates while rental income taxed under Category F can assessed at the flat rate of 28%. It is up to each individual to choose which method proves more advantageous.

> An important note: If landlords prefer to be taxed under category B, they must submit an “Início de Actividade” (Declaration of Opening of Business) with Finanças where they should opt for the Simplified Regime. If gross annual income exceeds €200,000, they are required to switch to standard accounting practices.


C) Aggregation: new options

Many categories of income may be taxed in one of two ways: autonomous assessment - taxed separately at a flat rate independent from other sources of income (such as bank interest), or aggregate assessment - all forms of income are added together and then taxed at marginal rates (according to the tax tables). In the past, when one option was selected, it had to be applied to all forms of income. Starting in 2015, the most appropriate form of declaration may be selected for each category of income. They no longer have to be the same.

> Bank declaration no longer required
Anyone with rental income in IRS no longer needs a bank declaration regarding income obtained from capital as was required in the past. This measure already applies in the 2015 tax return in respect 2014 income.


Dennis Swing Greene is Chairman and International Fiscal Consultant for euroFINESCOs.a. www.eurofinesco.com
What about Lisbon?
2015-10-08 10:39:31
Property for sale in Lisbon has seen an unrivalled growth over the last 2 years. Prompted by the Golden Visa scheme for non-Europeans buying property and receiving a European visa this market has grown exponentially. The Non Habitual Residency scheme is now adding to this remarkable growth and making Lisbon one of the hot spots of European property markets.

You cannot walk 2 blocks anywhere in the downtown area of Lisbon without seeing historical blocks of apartments being renovated. From Studios to 5 bedroom penthouses these properties are being snapped up by savvy investors as well as purchasers wanting to benefit from these visas or tax schemes.
Lisbon is on a crest of a wave. 30% capital appreciation coupled to an average of 8% ROI for rental properties is making Lisbon a desirable place to invest your money. (Source: Inspired Property internal data).

B&P Real Estate Agency have identified this growing market as a key strategical area for the expansion of the B&P brand with the first office opening taking place in September 2015. In partnership with Portugal Immobilier, B&P will focus heavily on the French & Belgian NHR market. The UK market is yet to waken to the possibilities in Lisbon but this is about to change. B&P will be marketing heavily within this market as well as the Scandinavian market.

In the Algarve the average price per meter averages around 2500€ per m2. In Lisbon this can be as high as 8000€ per m2. (Source: Portalimo) This demonstrates the shortage of quality properties as we see this figure rising year on year.

The rental market in Lisbon is also growing at the same ratio. In 2014, Lisbon presented its best results ever. It was the city with the highest growth in Europe in terms of total room-nights (+15.3%), and the city with the second highest growth of foreigners in Europe (+14.95%). Source: INE (Jan/Nov 2014, in comparison with 24 relevant European cities on the Tourism sector). This in itself shows the potential Lisbon has in terms of tourism as well as investment.

“B&P Real Estate Agents, Lisboa” will be offering a range of properties form studios for sale to apartments for sale in Lisbon
For more information either email myself on david@bpaproperty.com or take a look at our website http://tinyurl.com/bpa-lisbon


Lisbon

Almost everyone who has ever visited Lisbon will totally agree with one thing: The Portuguese are possibly the most friendly and hospitable people in Europe. Whether you are simply asking for directions on the streets, the local people will not only point you where you should go, but the chances are they will walk you to the door!
Lisbon is still not a hugely touristy city. The locals love to meet and chat with visitors, often giving friendly advice and directions to the best places to see or even eat. The Portuguese are incredibly hospitable and love to serve their guests with a friendly smile.
The city boasts some amazing features from art and culture through to fantastic cuisine and wine. Nightlife in the city is also diverse with the hustle and bustle of Bairro Alto. The night life in Bairro alto is vibrant, and offers a variety for everyone. From Fado houses, to reggae bars to punk and rock spots. No one will be bored in Bairro Alto. What distinguishes the Lisbon night life is the fact that people love to hang out outdoors rather than inside crowded bars and clubs. You’ll often find crowded streets, filled with people from all walks of life, having a fun night out through to sophisticated restaurants in Principe Real and Chiado. The Mercado da Ribeira and Cais do Sodre offer stylish night life while the Avenida Lideradade offers plenty of opportunity to spend your euros in top high street and designer shops.


The City

Lisbon faces the river Tagus, and is connected to the south by way of 2 massive bridges. Ponte Abril 25th reminds us of San Francisco Golden Gate while Ponte Vasco da Gama is over 10km long and connects through to the east of the city and the Expo area of Lisbon. The city itself is composed of seven hills. This enables Lisbon’s geography to offer stunning view points and breath taking sunsets. The historical centre with it’s labyrinth of streets and tile covered buildings are unique in the world. Here the old and modern mix in perfect harmony.

Unlike most big Europeans cities, Lisbon still conserves some of her old neighbourhood’s intact. Areas such as Alfama, Mouraria, Graça, Bica, Principe Real, Chiado, Rato, Lapa, Estrella and Santos offer the opportunity to go back in time and forget you are in a major capital city and just relax while walking through the little narrow streets, where colourful fragrant flowers adorn the typical Lisbon houses.


Lisbon weather

Lisbon offers a mild climate throughout the year. Our summers are nice and hot, very inviting for a beach day. The winters are usually sunny and relatively warm during the day.
Lisbon is one of the best destinations, no matter what time of the year you decide to visit.


History

Lisbon is the second oldest capital in the European Union, only overpassed by Athens.
Having endured a number of ups and downs over the last 1500 years, Lisbon is now rising from the ashes and is being compared with cities such as Barcelona and Madrid. During the 15th Century Lisbon became the most important port in Europe bringing Spices from India and the far east. The new world was under the domination of Portugal and Lisbon became one of the richest capitals in the whole continent.


B&P Real Estate Agents

Our company philosophy has always been to offer you property for sale in Portugal, at the right price with support and independent advice. Our unique service provides a one stop shop for our clients. Whether you plan to buy an apartment in Lisbon for living in or to find a solid investment in Lisbon we are committed to find every potential client the property to suit them.

On top of the expected high level of customer service our clients are used to B&P Real Estate Agents also offer a full short term and long term letting of your property. Our newly formed Management and letting team has been designed around the success of Resort Rentals Algarve, the largest independent letting and management agent in the Western Algarve.

When choosing your Lisbon Property we have formed strong links with a network of Portuguese partners, ensuring that the highest standards are maintained and the ideal property can be sourced for your personal requirements. We have developed contacts with some of the best developers in Lisbon. You cannot walk more than 2 blocks without seeing the investment being made in the city.

We are very selective with the properties in our sales portfolios; we will only offer you properties that we would want to buy ourselves.
We realise that it is very important that when you visit Lisbon, you are looked after by friendly, professional staff in a ‘no pressure’ environment. This again is a key principle of the B&P way.
IRS Procedures: Marital status - How should you report ? by Dennis Swing Greene
2015-09-02 16:20:43
Who said marriage was simple? Or being single, for that matter. But when it comes to tax time, it’s best to be informed so you make the best of your lot. Over all, marital status works as follows: single, widowed and divorced taxpayers submit an individual return; couples must file a joint declaration. Separated couples who are not divorced may file separately. This is usually advisable since both spouses are responsible for meeting all fiscal obligations under a joint return. All unmarried couples living together for more than two years, whether of different or the same sex, may also file a joint return.

The following questions and answers should point you in the right direction.

QUESTIONS AND ANSWERS:
Q: I got married in October. Should my wife and I file separate returns for the period of the year that we were still single?

A: No. You may only file a joint return because it is your status at the end of the tax year that counts. This, in fact, should work out to be in your favour since a couple normally pays tax less tax than two individuals.


Q: My boyfriend and I have been living together for several years. Should we file separate returns or can we file jointly?

A: While either is possible, unmarried couples may file a joint return and both must sign the return. To qualify for this status, you must have been living together and registered with Finanças at the same address for at least two years. This status applies to both heterosexual and homosexual couples. It’s a good idea to run a simulation before finalizing your return to be sure which status is most advantageous.
Attention: While unmarried couples are treated the same as married couples for IRS income tax purposes, there is no carryover of this equality to other forms of taxation. This is specially important in planning for Inheritance Tax. Unmarried couples normally have no succession rights, with marital and/or blood relations taking precedence. While Estate Planning is advisable for everyone, it is imperative in the case of unmarried couples.


Q: My wife and I broke up last year but we are not yet divorced. Do we still have to file a joint return or can we now file separately?

A: Both ways are accepted although your circumstances may make separate returns more practical. If filing individually, remember that both cannot claim the same dependents or deductions.


Q: My spouse passed away last year in May. How should I declare?

A: The death of a spouse must be reported in the tax return. The survivor submits a tax return, ticking the widow/widower box for marital status and reports the fiscal number of the deceased. Both incomes, as well as deductions and credits, need to be reported on the appropriate annexes.
In some instances, the estate may generate income prior to final resolution that will need to be reported as well. If there are complications or delays in the settlement of the estate, it is strongly advisable to seek professional advice.


Q: I am divorced and pay alimony to my “ex”. Am I eligible for tax relief on these payments?

A: Yes but only partially. If you pay court-ordered alimony or child support, there is a 20% tax credit for court ordered payments up to a maximum of €419.22 per month.
You will need to provide the Portuguese Fiscal Number of your “ex”. In certain instances, this requirement can prove awkward if the “ex” has never lived in Portugal and does not have a tax identification number (“NIF”).

Dennis Swing Greene is Chairman and International Fiscal Consultant for euroFINESCO s.a.
www.eurofinesco.com
Another summer gone...
2015-09-02 15:41:00
Can you believe that it is September already? From the balmy heat of July to the fresher long days of August this summer has been a great one all round. And that includes property sales. At B&P we have sold almost 50 properties during June, July & August a record for us and continues the fantastic year here at B&P. In holidays we have handled almost 1000 holiday weeks making 2015 our busiest year for holiday rentals leaving our owners feeling very pleased with their summer returns.

But this is just the start. Did you know that 40% of our sales come from the last 3 months of the year? During the key summer months most sales and clients tend be holiday makers from the UK, Holland, Spain and Germany but once we get to September the French Revolution happens all over again. Couple that to the Scandinavian market which kicks in from October and we expect to have a busy Autumn.

Property prices are also starting to improve slowly with small gains of around 5% being seen in our valuations. The resorts took the brunt of the pain when the recession hit in 2008, are also starting to recover. Over the summer we have secured sales on several properties at Boavista, Baia da Luz, Belmar, Quinta de São Roque & Jardim da Meia Praia. In fact B&P/Resort Resales have sold almost all the properties on sale at QSR & JDMP! We are in need of new listings on both these resorts.

And so as the madding crowds slowly dissipate over the next couple of weeks we are all looking forward to enjoying the town at its best… September and October offer the very best of Lagos. The Indian summer that we are all getting used to now runs through to mid-October and the beaches are less crowed, the restaurants less busy and the town has a calm buzz about it.

If you are planning a trip over to Lagos now is a great time to do it. B&P have been heavily listing new properties in anticipation of this busy period but we still need more. With almost 100 sales this year already we need quality listings now!

If you are thinking of selling your property please contact me on david@bpaproperty.com or call into the office for a chat.
Exchange Rates – How to get the best and reduce risks.
2015-07-28 14:19:44
With the financial turmoil in Greece dominating the newspaper headlines over recent weeks, the single European currency, the Euro, has been very much in the spotlight. And for those of us living and working in the truly international environment we have in the Mediterranean region, the future and the value of the single currency is of growing concern, particularly for people who need to move money between different currencies. These people may be earning money or have assets in other currencies and planning to buy or sell property or boats, or simply need to make regular transfers between bank accounts in different countries. With such volatility in the financial markets, it is difficult to know how, and when, to do this and to ensure we are all getting the most for our hard earned cash.

But why do exchange rates move so much? This is a complex area but, very simply, the currency markets are just that. A market. They are driven by supply and demand. They are heavily influenced by economic and political events, such as we are seeing in Europe at the moment, and investment confidence in a nation or region. Stable governments and good economic performance attracts investment and this in turn can increase the value of the relative currency. Conversely, poor performance and political uncertainty can have the opposite effect, with banks and institutional investors selling the currency and moving into areas where they can see better returns. The problem that gives those of us who need to manage our personal or business finances as efficiently as possible, is that it is very difficult and sometimes impossible to predict. And we all know that even relatively small movements in exchange rates can have a significant impact on how much we are getting for our money.

So how can we make this all a little less unpredictable and save ourselves real money without being glued to the markets and news feeds 24 hours a day? Well this is where having a good currency broker can help us. Most of us have naturally used our banks when needing to move our money around, but they tend not to offer very competitive exchange rates, nor be able to help and advise us properly. Currency exchange is a very tiny part of their overall business after all. Currency brokers however, are specialists in this field. They watch the markets closely, offer better rates than the banks and can give us personal advice based on our own unique circumstances. Plus they have a number of tools to help reduce the risks of adverse movements in exchange rates, thereby making our money go that much further.

But another reason most of us use our banks is that we have traditionally trusted them, and it’s also very convenient. They tend to have big, well-established names and that gives people security. And that begs the question: “Is my money safe if I use a specialist broker?” The answer is that we need to choose a broker wisely. Most of the established brokers are UK headquartered and that’s important as it means they are heavily regulated and their client accounts are segregated and secure. This means that our money is fully safeguarded under UK law.

A currency broker can help devise a simple strategy for our planned currency transfers. Exchange rates can be fixed for up to 2 years when the market is in a good position to do so, which can help with budgeting and takes away all the risk of adverse movements. They can help with regular transfers for our pensions, mortgages or bank account top-ups. They can act quickly to secure the best rates on our behalf. We can also use them to pay third parties too. And another benefit is that a number of them do not charge for their services or pass on bank charges which all helps at the end of the day.

So what will happen to the Euro over the coming weeks and months? Well it’s difficult to predict with any certainty, but one thing for sure is that the current volatility will continue, so it may well be worth seeking some specialist advice to make sure we are making our money go as far as possible.



Nick Jones
Business Development Director
Premier FX

Nick.jones@premfx.com

www.premierfx.com
Giving up the rat race...
2015-07-28 14:07:41
Have you ever fancied getting away from it all? 2 hour commutes to work, kids stuck inside as it is constantly raining, golf course closed due water logging…. Does this all sound too familiar?

Have you ever thought about running a business here in Portugal?
B&P Real Estate Agents have a number of business opportunities for sale, from running one of the busiest bars on the marina, The Marian Bar through to running a cocktail bar at the trendy Rosko’s bar in Lagos old town centre. We also have restaurants for sale in Lagos and Burgau.

If you want a more relaxed way to earn a living we also have investment opportunities where you can buy an existing restaurant with a sitting tenant for the next 10 years and simply take the rent as income, at Fresco’s Cafe.
Other opportunities include owning & running a pool and spa in Luz through to owning a small hotel in the centre of Lagos.
Price points vary so all in all no matter what your budget is there could be something out there for you. The question is “are you ready to make a life changing move” and give up on the rat race?
The dream really could become a reality. The opportunities are varied and we can assist you in finding the dream business for you.

So taking the kids to school in the pouring rain could be a thing of the past. Your 2 hour commute could be a 2 minute walk to work and the hours of being stuck inside could become hours enjoying the sun around the swimming pool.
B&P can help you find the business that suits your skills as well as accommodation in either a long let or purchase.

If this could be of interest to you either call in to the office on the Avenida or contact me directly on david@bpaproperty.com
IRS Procedures: Filing Exemptions by Dennis Swing Greene
2015-07-14 09:43:45
Before 1989, a conscientious Foreign Resident, wanting to declare income from abroad, would have been turned away at the local Finanças office. The reason was quite simple: under the former tax code called “Complementary Tax”, only individual income derived in Portugal was taxable; therefore, most income from abroad was exempt. Sadly, those days are long gone and all but a meagre few are expected to declare their worldwide income as Fiscal Residents of Portugal.


QUESTIONS AND ANSWERS:

- Who is exempted from submitting a Portuguese income tax return?

All those with earnings in 2014 are required to submit a tax declaration with the following exceptions:
a) Those who only have earnings subject to final withholding tax (except dividends) and accept the tax paid as final.
b) Those receiving only pensions falling below the annual pension allowance - National Minimum Wage - €7,070 per individual in 2014.


- The only income that I received in 2013 was from bank interest, taxed at source (28%). Do I have to declare this income?

If the interest and respective withholding were in Portugal, no declaration is required. Nevertheless, if your tax rate falls below 28%, you may achieve a small savings in reporting and submitting a return. In other word, you may be entitled to a refund!
If the interest that you received came from outside of Portugal and you are resident for tax purposes, this income should be reported regardless of the withholding.

Beware: The EU Savings Directive has been in force since 2005 and has substantially changed reporting procedures. Make sure you declare correctly under these regulations!


- My Old Age Pension falls below the Portuguese minimum wage. But I also had a small amount of income from investments abroad. Do I still have to submit a tax return?

Yes. The true purpose of this reporting waiver is to exempt the large number of small Portuguese pensioners who would only clog up the system without bringing in any appreciable income to the State’s coffers. All others must file. In addition to the standard Modelo 3, any investment income from abroad must be reported on Annex J (Income from Abroad).


- Even though I’m resident here, my pension is paid into the bank back home. Do I still have to declare?

Yes. Where your income is paid is irrelevant: neither where you receive it, nor if you spend it, nor the currency in which it is paid. What matters is that it is available to you. That’s what makes it taxable.


- My bank interest is paid in GB Sterling. How do I report income in another currency?

All income and expenses must be reported in Euros, regardless of the original currency.


- As a non-resident, I receive rental income in Portugal. Do I declare here or in my home country?

Possibly both. Your first obligation is to Portugal since the property, and therefore the activity, is located here. The appropriate Double Taxation Treaty defines the procedures to follow in your country of residence.

Dennis Swing Greene is Chairman and International Fiscal Consultant for euroFINESCOs.a.
www.eurofinesco.com
The heat is on...
2015-07-14 09:38:13
The weather seems to be hotter than ever this year with temperatures reaching over 40º already this summer. This is also being reflected within the property market.
June 2015 saw record sales for B&P where we sold an average of one property per day across the whole month! That represents a 30% increase for the year versus 2014 and continues the strong performance we are seeing over the last 3 years.

The French and Scandinavian markets have continued to deliver strong growth along with a strong pound giving a boost the UK market.
Sales are across the portfolio from Fractional quarter shares through to luxury villas.

Non-Habitual Residency and Golden Visa are still attracting quality clients hoping to move to Portugal to enjoy the tax breaks and residency status these schemes offer. While UK clients are looking to capitalise on the strong pound. A villa valued at 500,000€ in November 2014 would have cost approx. £435,000 and is now costing £358,000 representing in a saving of £77,000!

New build apartments are scarce but where we have them to sell they are selling well. Rodrigues & Vermelha apartments at Santo Amaro have completely sold out prior to completion where B&P sold around 35 properties in just over 12 months. The new development, Porto de Mos Beach Condominium is now selling equally well with viewings and offers coming in daily. Hopefully some of the other Lagos builders will kick-start their planned projects to fulfil the demand….
The need for new listings is constantly required as properties sell quicker than they have in the last 10 years so if you are considering selling we would love to hear from you.

Rentals are also hitting their peak and even with the new legislation we are experiencing record holiday clients this year. Resort Rentals and Lagos Long Lets offer professional service to both property owners and holiday makers. If you are considering renting your property or require a professional management company to look after your asset you can contact me on david@bpaproperty.com

Enjoy the summer and enjoy the heat it looks like it is here to stay in more ways than one!
IRS Procedures: Non-Residents And Filing Requirements
2015-06-09 10:32:44
NON-RESIDENTS are taxable on income and gains within Portugal. When the paying entities are resident or assets located within or services performed in Portugal, then the following examples of income would need to be declared:

- Local rental income;
- “Local lodging” income (short term lets to holiday makers);
- Capital gains from property sales;
- Fees from scientific, artistic or specialized services performed in Portugal;
- Administrator / director’s fees from resident companies;
- Domestically-sourced pensions;
- Lottery winnings.

Employers should deduct tax at source on earnings. This withholding is final, unless governed by specific treatment under a Double Taxation Treaty. On all sources of income, proof of tax paid is required when transferring the proceeds outside of Portugal.


NON RESIDENTS AND FISCAL REPRESENTATION

Non-Residents sometimes wonder why they must have Fiscal Representation. First and foremost, it is a legal requirement. Any Non-Resident owning property or with income arising in Portugal must designate a resident entity to serve as Fiscal Representative to fulfill all compulsory tax obligations.

Recent changes in legislation have dramatically altered the responsibility and obligations of the Fiscal Representative. Along with new responsibilities and revised enforcement practices, this once benign position has turned into a potential nightmare for both the unwary service provider and the non-compliant property owner.

A Fiscal Representative is now required to fulfill all accessory fiscal obligations for the Non-Resident. Under the reformed version of the “General Law on Taxation”, a Fiscal Representative can even be held accountable, in certain instances, for paying any outstanding taxes owed by the Non-Resident.


REGIME FOR HABITUAL NON RESIDENTS

Foreigners and returning Portuguese emigrants who settle in Portugal after 1st January 2009 may be eligible for this new status. This classification has certain similarities to the non-domicile status under UK and Swiss tax laws and hopefully may increase tax revenues by reducing tax rates.
The “non-habitual tax resident” may be allotted a flat 20% tax rate on Portuguese and foreign source employment and self-employment income. To qualify, this income must arise from scientific, artistic or technical activity to be defined by the Finance Ministry.

The non-habitual resident may also be exempt from assessment on various forms of income originating outside Portugal if such income is subject to taxation at source under the terms of a double tax treaty and does not involve designated tax havens. However, exempt income must be declared for purpose of establishing the tax rate to apply to any income taxed at marginal rates.


Dennis Swing Greene is Chairman and International Fiscal Consultant for euroFINESCO s.a. www.eurofinesco.com
And the madness begins...
2015-06-09 09:05:47
In years gone by, the summer months of June to September used to be quiet for the real estate market. Mostly holiday makers taking a look around properties at the end of their break and dreaming of having a property in the sun. Few clients would buy and agents spent hours running round trying to get into properties that were rented out for the whole summer.

How things have changed.

In the last 3 years we have seen an general improvement in the market and what was a cyclical market centring around the Spring and the Autumn has now evened out meaning we now enjoy an all year round market. What was a dry period in every sense of the word is now as fruitful as those traditional peaks.

So how is this affecting the way we work? Well in many ways. As I just
mentioned gaining access into the properties is always a fine art coupled to a little bit of luck! We still get the increase in traffic from holiday makers on top of the general growth the market is experiencing. Oh and throw in +30ºC heat just to mix it up a little more.

As we have discussed in previous newsletters the Swedish and French markets are buoyant. However in a way we get a stroke of luck during the summer months. The Swedes generally head out to their summer homes in Sweden and the French tend to spend time in France with their families. This actually helps as the Brits come over thick and fast.
Both enquiries and client tours are massively up in 2015. B&P are experiencing 30% growth versus 2014, which was 30% up on 2013 so we are all geared up for an exciting summer. It will then be “hold on to your hats” as we hit the real peak period of Autumn where we traditionally sell 40% of the years property.

If you are thinking about selling now is most certainly the time to act. Everything from budget apartments to luxury villas are selling. At B&P whether you are buying or selling we work hard for you. We aim to get you the best price either way!

For more information either call into the office or contact me directly on david@bpaproperty.com
IRS 2014 - Procedures: How, When and Where to file by Dennis Swing Greene
2015-05-11 09:36:33
In the “good old days”, many were exempt from submitting IRS tax forms. However, the law changed some time ago and now the overwhelming majority of foreign residents must declare. In the 2014 tax year, everyone is required to submit a tax return with the exception of those earning only Social Security pensions falling below the minimum wage. No tax return can put you on the wrong side of the law and vulnerable to undesired queries. If you are from a non-EU country, you will not be able to renew your “Residência” without one. For EU citizens, it’s only a matter of time before presenting your “Modelo 3" is compulsory for renewals.


Important Dates

All tax returns must be submitted by the following deadlines to avoid penalties.

Filing Dates
The tax year corresponds to the calendar year (01 Jan - 31 Dec).
Residents must submit tax returns by the following deadlines to avoid penalties. Fines start at €150 and go up to €3,750, depending on the level of coerciveness required to achieve compliance.

Filing, both on paper and electronically is as follows:
15 March - 15 April if only salaried and/or pension income;
16 April - 16 May in all other cases.

Also remember that the fiscal year in Portugal corresponds to the calendar year (1 Jan - 31 Dec). British nationals need to be specially careful since their April-to-April “P 60's” will not correspond to the Portuguese fiscal year.


Where to submit your return

Declarations may be submitted in person at the local tax office, by post or over the internet:
http://www.portaldasfinancas.gov.pt

The website and forms are only available in Portuguese. More and more services are becoming available on line, such as checking your newly updated “Valor Patrimonial” (rateable value) of your home. Most business related submissions can only be submitted over the internet.
Attention: Getting a password takes several days. This step should not be left to the last minute!

Tax forms keep changing and this year is no exception. Modelo 3 is now only an information cover sheet. Different categories of Portuguese sourced income are reported on the appropriate corresponding annexes. Foreign income is reported exclusively on Modelo J. All expenses have moved to Modelo H. Net taxable income is calculated by reducing taxable income by personal deductions and tax credits. Certain types of income benefit from specific tax incentives. Tax liability is computed according to tax rate tables, reduced by applicable tax credits.

If non-residents are subject to withholding tax, this payment-at-source represents a final payment and they are not required to file a tax return. However, any other income arising in Portugal, such as rent or capital gains on Portuguese real estate, must be reported. In fact, your first obligation is to report the income and pay the tax in the country where it arises (in this case, Portugal), then report again in your home jurisdiction to claim the international double taxation credit.


When to pay your Tax Bill

Based your submission, Finanças will calculate what you owe and send a demand later in the year. Income tax is due within 30 days of the issue of a demand by the Tax Authorities. Late payment will incur monthly interest charges and penalties.


Dennis Swing Greene is Chairman and International Fiscal Consultant for euroFINESCO s.a. www.eurofinesco.com
Its all in the planning...
2015-05-11 09:32:43
Every client is different. Every client approaches their purchase in a different way. From being totally armed with every conceivable detail, to having complete open briefs.

So what is the right way to start your search? Well clearly you need to understand your budget. The purchase of a new holiday home should be hugely pleasurable experience and once purchased should be your home from home in the sun. So keep to your budget, the last thing you want is to put yourself under pressure. The haven in the sun could become a millstone and that defeats the whole object.

Secondly clarify in your mind what the objective of the property is. Is it for the whole family to use or is it for the 2 of you to escape to. Do you plan to have large groups staying at the same time or just your immediate family? Do you like to spend time at home or out at the beach all day? What time of year do you usually take your holidays? Do you want a swimming pool? A Gym? A Garden? Do you need a garage? Do you want to walk into the town at night? Do you want privacy around your property? There are lots of choices out there so a clear understanding of your needs will not only help you but also your agent.

Location – you may have spent your holidays for a couple of weeks every year in one location but when it comes to spending longer periods here location is key. Are there hospitals nearby? Supermarkets? Pharmacies? Markets? Bus stops? Taxis? You also need to think about winter time. Is the normal holiday location a busy community in the winter or does it simply close down? You don’t want to be the only person in the village in January… Or maybe you do!
Services – do you plan to be totally self-sufficient or would you prefer a fully serviced property? Resorts offer all year round support from security, on-site restaurants, reception through to maid service, laundry and property management. Alternatively you can manage all of this yourself or find a half-way house by appointing a management company to assist you.

The final decision is how to find your ideal property. There are many agents out there, some good and some not so good. My advice is to find one you are comfortable with. One that listens to your requirements and asks you the right questions. At the end of the day you are the buyer and will buy what you want not what the agent wants to sell to you! Some agents may want to sell you a property and then walk away others, such as B&P, offer a complete service where we will help you find the right property for you and then assist you with the whole process going forward. At B&P we offer support on Lawyers, currency transfer, furniture choice and once you have bought Resort Rentals Algarve offer you full management support and will also rent your property out if you wish.

So if you are starting the buying process or about to start, B&P will give you a professional and friendly service ensuring the whole experience is simple and enjoyable.
For more details contact me on david@bpaproperty.com or call in to the office located on the Avenida.
Non-habitual residents - Portuguese special tax regime for inbounds
2015-04-13 17:16:04
This summary provides a brief overview and explains the main guidelines and potential implications of the non-habitual resident (“NHR”) regime for new inbounds transferring their residence to Portugal and for Portuguese nationals returning to Portugal after an extended period of living abroad.

Overview of the regime: NHR individuals can benefit from the special personal income tax (“PIT”) regime for a ten year period.


Portuguese source income

Employment and self-employment income can be liable to a special 20% flat rate if derived from high value added activities of scientific, artistic or technical character performed in Portugal, as listed in a Ministerial Order.
Examples of high value added activities: Architects, doctors, university teachers, designers, IT technicians, engineers, researchers, liberal professions, investors and managers under certain conditions.
Other types of domestic income received by NHRs are liable to PIT according to the rules applicable to ordinary tax residents.


Foreign source income:

Employment income

Employment income can be exempt from PIT provided that:
- It is taxed in the source State according to the applicable Tax Treaty; or
- If no Treaty is applicable, the income is effectively taxed in the source State and it is not deemed as derived in Portugal.


Other income

Foreign source dividends, interest, capital gains and rental income, together with self-employment and professional income (in this case, only if derived from high value added activities), can be exempt from PIT if:
The income can be liable to tax in the country of source, according to the applicable Tax Treaty or to the OECD Model Tax Convention; and
-It is not deemed derived in Portugal; and
- It is not deemed obtained in a tax haven


Qualifying for the status

To qualify as a NHR, an individual must meet the following requirements:
- Be tax resident under Portuguese domestic legislation; and
- Not have been taxed as a Portuguese resident in the five years prior to taking up residence in Portugal.

An individual is tax resident in Portugal for any year in which:
- He stays in Portugal for more than 183 days (continuously or not) during a 12 month period, which begins or ends in that tax year; or
- He has a residential accommodation available in Portugal in any day of that 12 month period, which is used as the individual’s habitual abode.
Any day (or part of a day) spent in Portugal will count as one day if the individual stays overnight in Portugal. Residency is established as of the first day of permanence in the country.


Registration as NHR

Recognition of this status is not automatic and requires activation by attending to the following formalities:
- Application for a Portuguese taxpayer number;
- Registration as tax resident;
- Application for the NHR status.

Nevertheless, in case the Portuguese Tax Authorities have doubts about the individual’s effective tax position, additional documents can be requested, e.g. tax residency certificate(s) and other documents to prove that the personal and economic interests of the individual were located in another State in the five years preceding the arrival in Portugal.
The NHR status must be requested until March 31 of the year after taking up tax residency in Portugal.


Other considerations

Wealth taxes: Portugal does not have wealth taxes. Only local taxes on Portuguese real estate apply (as described below).

Acquisition of property: Portugal levies a municipal tax on the acquisition of Portuguese properties at rates between 0 and 6%. Stamp tax duty at 0.8% is also due on the same amount

Annual Property tax: Portugal levies an annual municipal tax based on the registered value of Portuguese real estate at rates between 0.3 and 0.5% (depending on the municipality and the type of real estate). Stamp Duty will also be levied at a 1% rate on properties with registered tax value equal or higher than € 1,000,000.

Inheritance tax: Stamp Duty is levied at a 10% rate on Portuguese assets only except for spouses, descendants and ascendants, who are exempt.

Gift tax: Stamp Duty is levied on gifts located in Portugal at a 10% rate except for spouses, descendants and ascendants, who are exempt. An additional rate of 0.8% is due on gifts of real estate.


Deloitte can help you

Deloitte can guide and assist you throughout the entire NHR process. It is crucial to ensure proper compliance with the applicable formalities in the year of relocation and in the subsequent years of residence in Portugal in order to fully benefit from the potential advantages of the NHR regime.

We offer a one stop shop for all PIT and NHR related requirements of your move to Portugal, which include (among others) the following tax services (1) (2):
- Initial personalized briefing on the NHR regime and your move to Portugal (€ 500);
- Arrival and registration formalities (€ 800);
- Applying for the NHR status (€ 1,000);
- Filing of personal income tax returns (€ 1,900);
- Ongoing tax and social security advice (hourly rate of € 200).
(1) Minumum fees charged per service and per person; a fee quote will be presented upfront considering your specific situation.
(2) VAT will be levied at the normal rate (if applicable).


Find out more...

The information provided in this brochure is an introduction to possible tax consequences of a move to Portugal. It is intended only to be summary and simplifications have therefore been made. Individual advice must be obtained before acting on any of the matters covered herein. There may be tax implications in other countries as well. Tax Treaties concluded by Portugal may also be relevant to some of the above taxes.

For more information, please contact: Rosa Soares rosoares@deloitte.pt; Luís Leon luleon@deloitte.pt or Aline Almeida marialmeida@deloitte.pt

For further information, visit our website at www.deloitte.com/pt/about
The market continues to change...
2015-04-13 16:55:49
Following several years of madness within the property market we have started to see a little bit of stability return. Having said that although we have normality in terms of the way we operate there is continued change in the overall face of the market.

Since the recession hit in 2008 we saw a number of agencies close from the high street. Properties stood stagnant for years with few to no viewings and even fewer sales. This started to improve in 2011 and has continued to improve to a current peak where we are seeing as many clients per week as in the heady days of 2005-2006. Sales are plentiful and if priced and presented correctly properties are selling within sensible timescales.

Of course we are still seeing price points way below that of pre-recession and in some instances as much as 50% lower but we are seeing stability in the closing prices of the sales. We are now valuing to within 5% of deed prices in most instances.

So what are the changes?

We are seeing changes more in terms of the types of clients. I have written on numerous occasions about the Scandinavian and French clients coming to Portugal for Tax reasons. This is added to now by upturn in UK clients looking to take advantage of the improving exchange rates. The pound is 20% higher than it was at its low point in 2014. Based on a purchase price of 200,000€ this means that the property was costing £167,000 in May 2014 and now would cost you £140,000 that is a significant saving of approx. £27,000!

So we have new markets as well as old markets returning and this is making for a buoyant market place. Interestingly and dependent on which location clients come from we have to take a different approach to our handling of them. Some require plenty of time to decide and some make their decision very quickly. We are even seeing movement from Ireland which at its lowest point was almost inconceivable that it would recover. But we are now seeing not only an increase in Irish buyers but also a strengthening in Irish vendors selling position.
So as you can see the parts of the ever changing Jig Saw puzzle of the overseas property market continue to shift. At B&P we continue to move with the market. We speak over 10 languages, have a team of 13 people and we believe we offer the most complete service in the area. We understand our market and will continue to develop and evolve as the market does ensuring that whether you are buying or selling you get the most knowledgeable and professional service there is. If you need any advice on the selling of your property or indeed are looking to buy a property contact me on david@bpaproperty for a personal consultation.
Fiscal Residency by Dennis Swing Greene
2015-03-03 15:30:22
The vast majority of Foreign Residents share a common trait: most, if not all, of their livelihood comes from outside of Portugal. Great confusion and dis-information abound regarding such Income from Abroad. Before analysing the different requirements surrounding Individual Income Tax (“IRS”) in Portugal, it is useful to dispel some of the myths and establish a few of the basics regarding Portuguese taxation and the obligations of the Foreign Resident. So the first question to consider is: Who is required to make an income tax declaration in Portugal?


QUESTIONS & ANSWERS:

When is a foreigner considered resident for tax purposes?

It is important to distinguish between a Residency Permit (“Residência”) and being resident for tax purposes. The former is a civil status and had new legislation in 2006 . The latter is Fiscal in nature and is circumstantial in nature. Individuals are deemed to be resident for tax purposes when they meet any of the following criteria:

An individual is deemed to be tax resident if he is 1) physically present in Portugal for more than 183 days in a calendar year; or 2) physically in Portugal for less than 183 days but has established a permanent place of residence at the year end. If one owns a dwelling in Portugal that the tax authorities might reasonably assume to be his or her usual residence, one can be considered resident for that tax year. If the head of a family is resident in Portugal for tax purposes, other family members are also considered to be resident there, even if actually living abroad.

However, if the foreign country has a tax treaty with Portugal, the treaty contains rules to decide in which of the two countries an individual is resident. Needless to say, if you do have a “Residência”, you are deemed to be resident whether physically present or not in Portugal. In fact, the Estrangeiros office now insists that non-EU residents present IRS tax declarations for Residência renewals.

Are non-residents required to declare income arising in Portugal such as rental income?

Your first obligation is to settle up with the tax authority in the country where the income is generated. As such, non-residents are taxable on income arising in Portugal, usually at the flat rate of 25%. If you are engaged in local lodging, your final tax rate should be less than 4% so compliance is, in fact, quite favourable.

What happens if I don’t file a tax return and get caught?

While the tax authorities used to turn a blind eye to foreign residents, the pendulum is now moving in the other direction. Rather than being invisible, expats have become prime targets. Legally tax resident in Portugal, many have never submitted a return, thus likely to be eligible to pay tax owed, back interest as well as hefty penalties. If you come forth voluntarily, you are dealt with accordingly. However, once on the “Black List” of tax-cheaters, it is difficult to shake that status. Look on the bright side: by being compliant, you can take an important step towards peace of mind.

But I already pay tax in my home jurisdiction...

Unfortunately, you don’t get to choose where you pay your taxes. The Law determines the choice for you. Just because you may pay (incorrectly) back home doesn’t mean that you will win any favour with Finanças. Double Taxation Treaties clearly define taxpayer obligations. And Portugal now has over 40 tax treaties with all of the EU countries and many others around the world. Many others are in different stages of the process. In other words, Portugal is rapidly internationalizing its fiscal perspective.

Will I pay more in tax in Portugal?

It may come as a surprise that filing a correct tax return in Portugal can actually save you money. Submitting a tax declaration is not synonymous with paying tax. The Portuguese tax code has generous allowances and unexpected exclusions on certain forms of income, broad deductions for numerous types of expenses and liberal tax credits for many common expenditures. Many people find their tax burden in Portugal to be significantly lower than in their country of origin. We will try to show you how in the coming weeks.


Dennis Swing Greene is Chairman and International Fiscal Consultant for euroFINESCOs.a. - www.eurofinesco.com.
The best way to list your property - Part 2
2015-03-03 15:07:13
When selling your property how do you choose an agent and what are the benefits of an exclusive contract versus a non-exclusive contract?

When you initially decide to list your property for sale you will find lots of Estate Agents to choose from. So how do you choose? Well before you do, you need to decide whether to list your property with one agent or whether to list with several.

You may feel that the more agents you list with the better the exposure… I’m afraid this is not always the case. By listing your property with multiple agents can sometimes have the opposite effect. Firstly, from the mind-set of the agents, if they know the property is with 5 or 6 different agents they know that there is a chance that other agents could well be presenting the property or have already presented the property to the prospective client. Therefore it is understandable that an agent would lead with properties that he knows only he can present and have a better chance of making that sale.

This therefore has the opposite effect meaning that your property could be presented further down the line rather than first. Also on a marketing point of view again if the property is listed with a number of agents and then included in marketing on the major portals this again could have a detrimental effect. The property shows up on the web portal several times and actually loses impact and can also look desperate. This can result in prospective purchasers dismissing it or simply overlooking it.

The alternative is to choose one agent that you believe can sell your property. You need to be comfortable with your agent and be happy with how they market your property. This starts at the initial meeting but follows through with the quality of the website, the quality of the pictures and the quality of the write up. Remember this is the hook that will entice prospective buyers to either email an enquiry or walk in the door of the shop.

So in summary a little research and maybe even a face to face discussion with the agent will give you a better idea of who will present your property the best and also be the most committed to selling your property as quickly as possible. Don’t be afraid to ask how they plan to market your property, what web strategy they have and also how are they performing in terms of hits and enquiries. At the end of the day you are going to be paying them to do this for you!

In the last 4 months B&P have sold over 60 properties. As previously mentioned 70% of our sales come from properties that have been on the market for less than 6 months. We now need more listing to cope with the demand of an improving market. If you are currently selling your property or considering selling your property B&P welcome the opportunity to sell it for you. Over 100 clients chose B&P to buy from last year and we made over 700 viewing trips during 2014 alone.

If you want further information on selling your property contact me directly on david@bpaproperty.com or call on 282 764 193
Why are house buyers choosing Lagos?
2015-01-28 16:59:31
Why are clients choosing Lagos? As we have discussed several times before we are experiencing a number of new markets where clients from France, Sweden, Norway and Finland are now buying property in Portugal.

We have also seen a new style to house searches with clients from different countries having their own way of searching. The French for example want to see more properties per viewing than any other nationality. The Swedes want to do “drive bys” and then view a smaller list of options.

One similar trait appears to be the desire to look right across the Algarve from Tavira through to Salema. Some are using specific agents that offer this service and others like to use the more knowledgeable local agents. But there is a consistent trend in that a high percentage of clients are choosing Lagos more than any other region.

This got me thinking, so why is this?

Of course there are the obvious benefits of Lagos. It is one of the most beautiful locations in the Algarve. A mixture of traditional buildings, heritage and history coupled to amazing beaches, gorgeous coastlines such as Ponta da Piedade and all surrounding the quaint old town of Lagos. Here we have a plethora of independent restaurants. Lagos has only 2 restaurant chains in the whole city with the rest being local family run businesses which offer a wide range of quality food from fish to seafood through to more typical dishes. They say there are 365 coffee shops, bars and restaurants in Lagos, so one for every day of the year. We all have our favourites and no matter what your budget is you will be served with a consistent high quality of food and service.

But for me, there is an overriding factor that keeps drawing these new clients to Lagos. Lagos is “an all year round city”. Yes of course it goes a little crazy during August. The city goes from around 26,000 inhabitants to a bulging 120,000 during the month of August. But Lagos has an all year round appeal. Most of the restaurants stay open all year. The fish market offers fish caught that day all year round and is supported by one of the most traditional farmers markets in the Algarve every Saturday morning.

Some of the other locations across the Algarve offer a great holiday experience during July and August and can be a nice place to visit out of season but for clients wishing to live in Portugal predominantly during the winter there really is only one choice, Lagos.

Another key ingredient is the infrastructure that Lagos offers. Hospitals, clinics, dentists, Pharmacies, supermarkets as well as a world class marina and oh yes I did mention some of the most amazing beaches in the world. Yes the world! Ponta da Piedade beaches have been nominated as one of the most beautiful stretches of coastline in the world by both Huffington Post and Condé Nast magazine.

So if you are considering buying a home or even renting in the Algarve, look no further than Lagos.
A Happy New Year for some!
2015-01-28 16:53:56
January has been an interesting month for currency exchange. We started the year seeing the GBP/EUR around 1.27 and we then briefly moved up to over 1.34.

The first news to affect the market was the Swiss National Bank’s decision to abolish the minimum exchange rate for the Swiss Franc to the Euro. This saw the Euro weaken and resulted in the GBP hitting a 6-year high against the Euro. GBP/EUR went up from 1.2850 to 1.31 in the interbank market in a matter of seconds; it was an extremely volatile move that caught out a lot of the market.

We still saw the GBP struggle against the US dollar; with oil prices remaining low the US dollar remains strong. However the GBP did manage to pull back slightly with the US employment figures being released, but then dropped back down again.

The European Central Bank announced it was going to inject money into the Eurozone until September 2016, which over time should boost the economy. This saw the rate jump up for the GBP from 1.30’s to the high 1.33’s in the interbank market.

As we saw in January the rate can change in one day so quickly. At Premier FX we listen to your requirement and timescales - which means we can react to the market to secure the best rates at the right time for you.

To register with Premier FX is free, you can either contact us directly or visit our website to find out more information. Once registered you have access to the up to date rates online 24/7. If you want to protect yourself against the fluctuation of the exchange rate we can discuss the best options to suit your needs.

If you would like to be kept up to date with where we see the rate going in 2015, please see our newsletter on www.premfx.com.

Whether you are looking to set up a regular payment or making a one off transfer, with no bank charges, and no minimum amounts, Premier FX is on hand to help; we are here to make your currency transactions stress free and simple.

Premier FX is authorised by the FCA (530712) and regulated by HMRC.

For an informal discussion contact Nick Jones of Premier FX on +351 912 211 446 or email nick.jones@premfx.com.
Cooking classes - Starting 2015 with new BBQ skills
2015-01-20 18:27:45
The Chef affairs, personal chef and catering service, in addition to traditional activities, this year offer 2 cooking classes: Portuguese kitchen and BBQ pit master class.

In the “Portuguese kitchen cooking class” you can discover where to find the best fresh, local and seasonal products by visiting the Lagos fish market, the Saturday vegetables and fruit farmer market, the Alvor lagoon shellfish farm.

Then, the chef and his assistant come to your house and start the class, showing the secrets of The Portuguese and Algarvian kitchen: Sauteed Prawns with garlic, white wine and coriander - Local chouriço stewed in red wine and onions - Fresh mussels Bulhao pato - Fish and seafood cataplana - Pasteis de nata – a sumptuous champagne and berries Sangria.

When everything is ready, table will be set and food served, in the meantime your kitchen cleaned and tied.
Yes, everybody can prepare a nice BBQ for family and friends, but with the “BBQ PIT master class”, you will learn several tips to transform you in a master griller!

How to set and stabilize your BBQ - The best cuts for BBQ - How treat your fish and meat before the grill - How to grill perfectly -Internal temperature control - The criticality of rest - How to clean quickly your BBQ
Together with the chef, you will prepare: Kentucky style Pork prime ribs L&S with bbq sauce - Juicy and tender Chicken breast with balsamic and herbs glaze - The perfect steak: Over KG Rib eye - Marinated salmon fillet with oriental flavors - Grilled Mango and pineapple with lemon custard and some complements to elevate your BBQ to another level: Lemon garlic butter - Dust rub - Chimichurri dip

For more info, see www.thechefaffairs.com or contact Roberto +351 917009238
Time to invest.... Buy to let is back!
2015-01-20 18:19:34
With exchange rates getting better by the week, could now be the time to make the move on your overseas property purchase?

The exchange rate has hit 1.31€ to the pound today (16/01/2015). This is the highest rate we have seen for 2 years. So now could be the time to take the plunge and buy that dream home you have been talking about for so long. There are still some superb bargains out there with prices still 30% below 2008 prices.

Another area of the overseas property market is “buy to let”.
This area of the market has been very quiet since the crash. However, in recent months we have been receiving more and more enquiries from investors wanting more than the banks are offering for their invested money.

The holiday letting market can be very lucrative but can also be time consuming and a lot of work. Add to this the changes in the rental legislation of renting your property out and this style of letting loses some of its appeal. A great alternative is residential letting.
The residential letting market has been growing consistently over the last 2-3 years, with demand out numbering supply. Therefore we are seeing many landlords looking to add to their portfolios with buy to let properties to fulfil this demand. We are also seeing a number of new clients that are looking to fill this gap of rental properties and buying properties to put straight back on the long let market.
There are many more long let clients than long let properties.

Therefore you could move your cash from sitting dormant in the bank earning little to no interest to a more solid property investment that will earn you a healthy return within weeks of leaving your account.

As the market is still in its infancy it could be a great time to get involved. Property prices are relatively low, rental values are on the increase and there is a consistent increase in demand for quality long term rental properties.

With some of the developers prepared to sell off new build properties at seriously discounted prices you could be renting your property and receiving a good return sooner than you think. The properties are new, modern with little to no maintenance and are exactly what the new breed of international renters look for. We need all sorts of properties from 1 bedroom apartments through to villas. Buy to let may well have been a thing from the past but for sure it is becoming the new sensation for the future!

If you would like to discuss opportunities for residential letting give me a call on 00 351 918 473 280 or email me on david@bpaproperty.com
Short Term Rental Legislation Changes 2014
2014-12-17 18:13:41
This year the legislation involving short term “holiday” rentals (stays of less than 30 days) in Portugal has changed. The crux of the change is that the individual or entity promoting the property and engaging in the business must be clearly defined – is it the owner or an agent? Depending on whether this is an owner or an agency who takes responsibility for the rentals will determine the processes and taxes which should be applied, the most tax effective route being with the owner identified as the promoter. The promoter (owner or agent) of the property must be clearly identified on any advertising (including all websites) together with their license number.

The law has now entered into force and we have until 27 December 2014 to comply, with threats of heavy fines for non-compliance so action needs to be taken quickly.


START UP PROCEDURES

If the owner declared to be promoting the property and engaging with the guests, they must:

1) Register as a business with the Portuguese tax authorities – this document needs to be submitted to the local council to be filed with your rental license.

2) Register with Social Security - many clients will be eligible for an exemption from paying Social Security (e.g. if they are paying Social Security in an EU country or receiving a state pension) though that eligibility would need to be applied for.

3) Register for IVA (VAT). Exemptions can apply as described below.

4) Until now, rental licenses were given a local number (not national number) the local councils will now assign a national number for all rental licenses and send a letter by post to notify the owners.


INVOICES FOR GUESTS

An invoice should be raised to the holiday maker, by the promoter for each holiday booking. The invoice values will be inclusive of IVA (VAT) applied at a rate of 6%. If the total rental income of the promoter is under €10,000 per year then they are exempt for the following year. Therefore all those registering their business activity for the first time will be exempt in the first year.

If your total annual rental income is over the €10,000 level and you are therefore obliged to personally charge IVA, you will need to submit a quarterly IVA return. As many services you pay for relating to the property are now at 23%, the IVA deducted from your rental income should be recovered.


BENEFITS

The benefit of registering as a touristic business, etc, is that the income will be taxed under the Simplified Tax Regime (called “Modelo B”) which has a reduced tax rate of 25% calculated on just 15% of the gross rental income (a straight 85% of the gross income is considered as tax deductible overheads). Moreover, there is no further requirement to pay additional tax on this income in your home country.

Under the previous tax regime (called “Modelo F” which was designed for reporting long term rental but has generally used by most owners for all their rental income, both short and long term), the tax is 28% of the gross rental income (with IMI, insurance, condo fees and repair maintenance all costs which can be used as deductible overheads). Incidentally, this is still used to report long term rental income, which is considered anything over 30 days where contract is used, simple receipts and with no VAT involved no matter the values.

N.B. Disclaimer - Resort Rentals are simply offering an opinion. We are not accountants or lawyers and this explanation and the suggestions made are merely as advice to our clients. For further information please contact your accountant or Resort Rentals and we will introduce you to one of our panel of accountants.
And so this is Christmas…
2014-12-17 12:07:07
And what have we done?

Well 2014 has been an exciting year all round. I have updated you on several changes throughout this year.

Firstly, we have experienced the influx of new markets which are now becoming part and parcel of our daily life at B&P.

French and Swedish clients are accounting for almost 50% of our business during the winter resulting in us expanding our sales team and we now speak around 10 languages to cope with this diversity.

Business has continued to grow with record sales being recorded in every single month this year culminating in almost 40 sales being made in the last quarter. The average sale price has also increased again demonstrating that the market is still strengthening.

New properties on the market are continuing to be the best sellers with approximately 70% of our sales coming from properties that have been on the market for less than 6 months.

B&P has solidified its position as the highest Google ranked Estate Agency only being beaten by Rightmove and paid for Google ads. B&P have now consistently been sitting at number 4 on Google for 18 months.

This B&P Newsletter has now developed a weekly following of around 1500 regular readers. This helps us communicate not only new listings and price reductions to our potential clients but also regular updates on the market overall.

Facebook for the Inspired/B&P site now gets over 1000 followers for every post, again highlighting the interest we are generating not only by potential clients but also people living here in the Algarve. Facebook has also created a number of sales and is now an integral part of our marketing campaign to either sell your house or find you the ideal property.

In 2014 our Rentals & Management department also saw some great changes. Again we expanded our team and grew our overall business by approximately 30%.

In 2014 we managed around 1000 holidays during the summer and continued to grow our management base.

In the summer we launched Lagos Long Lets, which I have to say was one of the most successful launches we have experienced within our company. Within 24 hours we achieved over 300 followers on the Facebook site and have rapidly become the primary Residential letting company for overseas clients in the Western Algarve.

So that is a snap shot of 2014. So what for 2015?

I believe we will see a continuation of the improvement from 2013-214 into 2015 and 2016. B&P/Resort Resales are geared to cope with this continued growth with a few improvements during the next 6 months to assist in this:

The B&P office is due for a makeover and this should happen during the first half of 2015.

Our marketing strategy is very strong although we will not rest on our laurels. We will be making a number of changes, additions and improvements to continue our mission to offer the best sales proposition in the Western Algarve. Watch this space and these newsletters for continued improvements.

We will be strengthening our portfolio and require more properties. We sell an average of 2-3 properties a week and so need to constantly top up the bucket with more quality properties. If you are thinking of selling then give us a call…

Resort Rentals has grown to a size that we need to divide this business up. Still headed by Victoria Johnson we will split the 3 key areas as individual business units offering greater focus and control to these business units:

Resort rentals – Holiday Lets
Resort Rentals – Management
Lagos Long lets – Residential Lettings

So that is another year. And what a year!

I would like to thank all our vendors for trusting us to sell your properties, our purchasing clients for taking part in the experience and our partners for the support we have enjoyed this year.

So from all at B&P, Resort Resales and Resort Rentals I wish you a Happy New Year, “let's hope it's a good one, without any fear!"


David Westmoreland
Making the most of Tax Breaks by Dennis Swing Greene
2014-12-01 10:52:25
While much of the interest in the new legislation regulating Local Lodging has focussed on simplified requirements for Owners, the most exciting news centres around the favourable taxation of this business activity in general, both for Owner/Operators as well as Property Managers. Historically trapped in Category F (Rental Income), in 2013 this category was condemned to pay 28%. For non-residents, the majority of Owners engaged in Local Lodging, this payment was final.

When treated as a business activity (furnished lodging for tourists) as is now compulsory, the picture changes dramatically. Under the Simplified Regime, this activity automatically receives an 85% exclusion and taxation is based on just 15% of invoiced income. For most, this reclassification reduces final assessment to under 4% rather than 28%, a sensational seven-fold reduction when comparing Categories B to F. While there is a small increment in related accounting costs, this increase is more than compensated by the tax savings.


Outsourcing

However, the tax benefits are not limited to Owners. Many Owners let through Agents. An alteration in status and outsourcing of bureaucracy may also imply a change for Agents as well. When Owners switch to a Category B business activity, they assume directly or outsource the following:

a) Invoicing: in order to qualify as a tourist activity, Owners must invoice holidaymakers directly. As a corollary, Agents have one less task to perform;

b) Withholding Tax: Under Category F (Rental Income), Agents normally had to withhold 25%, a somewhat timely and costly process. With Owners now as independent businesses, no withholding is required.

c)Liability: under the new Decree-Law, the Operator (Agent) is liable for infractions - often caused by Owners - with cumulative fines reaching as high as €270,000. Owners, who are normally individuals rather than companies, have fines at one tenth corporate levels. Needless to say, they are the ones who ultimately control the condition of the property they own so it is only natural that they assume responsibility.

d)Reporting: Whether it be to the tax authorities (“AT”) or to Immigration and Borders Service (“SEF”), reporting requirements can now be outsourced by the Owner and are no longer in the domain of Agents.

e)Tax Declarations: With Owners registered for business and tourist invoicing in place on an “demand” basis, annual tax declarations will automatically follow. Agents can be assured that their Owners are fully compliant and are no longer at risk of being held accountable for tax omissions.

Many Owners find outsourcing these issues to competent professionals to be both economical and efficient as well as a genuine relief to be rid of these headaches in Portuguese bureaucracy.


Moving from Agent to Manager

With Agents switching their formal registered business activity to “Manager” (providing support services to the tourist activity), their role otherwise remains the same, as do commissions. Fewer tasks mean greater productivity leading to enhanced profits. As stated above, Owners make appreciable savings as well, so it is a win-win situation.


Taxation of Property Managers

The new tax treatment for Managers couldn’t be better. Under the former legislation, Managers were assessed based on 75% of their gross income under the IRS Simplified Regime. Starting in 2014, this percentage drops to just 10%. This leads to a final tax rate of only ±1%. It is hard to imagine a solution where compliance could be more favourable, both for Owners and Agents.

Dennis Swing Greene is Chairman and International Tax Consultant for euroFINESCO s.a. www.eurofinesco.com
Changing times…
2014-12-01 10:41:50
In years gone by, the key selling periods were quite defined.

We would experience a busy January & February as clients made life changing decisions over Christmas, then we would have a very busy September & October following buyers holidays experiences.

However over the last few years we have seen a definitive change in the buying patterns of overseas property buyers. There are a number of reasons for this. Firstly we have experienced a broader range of clients buying. French buyers tend to come in their droves from late September through to mid-March along with high numbers of Scandinavians. They drop off during the summer months as they enjoy their summer homes or time in their home countries.

The Brits and Irish tend to be more summer shoppers and we take the opportunity to view during the warmer months. And then we have the NHR/Tax avoidance buyers who cram their viewings in before the year end. This is causing the market to fill up all year which makes for a much more settled market place.

Rather than having these peak periods we see this even spread of clients across the year.

This sounds great and if the same volume of business was spread across the year we would have a calm and controlled sales office… However as previously mentioned B&P have experienced up to 40% growth in sales volume over the last year meaning we are not only consistently busy but busier than ever before. More clients, more sales and therefore more processing keeps all the team out of trouble and we will be working right up to Christmas Eve trying to complete as many sales as we can. January will see us mopping up some of the deals we could not get over the line pre-Xmas as well as the start to the New Year.

January is historically a busy month and I do not expect this year to be any different. The French are already making viewing bookings as well as the Brits so we are hoping for a similar year to 2015.
This means we need to list new properties for the New Year and over the next few weeks we will be looking for new stock to replenish the high volume of properties we have sold not only across the year but more specifically during the last quarter. Almost 50 properties have been sold during Q4 and we now need to replace these with high quality apartments, villas and townhouses. Sea view, city centre, beach properties and country properties…. If you have been thinking about selling maybe now is the time to speak to us. You can contact us on mail@bpaproperty.com or via the website www.bpaproperty.com
Highlights of the new Local Lodging Legislation by Dennis Swing Greene
2014-11-20 13:06:05
Local Lodging has finally come into its own. Known internationally as “Self-Catering Accommodations”, new statutes regulating this business are solely dedicated to the activity in its own right, rather than being seen as an afterthought to general tourism as in the past.


Simplification

The initial legislative goal was to simplify, an end admirably achieved. In the past, a “licence” was required, issued by the local municipality. Although neither difficult not demanding, there was still a substantial amount of paperwork to collect and submit. No more. Rather than presenting a raft of documents, the Owner (or designated Operator) presents a Declaration (Terms of Responsibility), stating that all standards have been met and accepting full responsibility. In other words, if there is an electrical problem, it’s the fault of the Owner, not the electrician.


Registration

Registration is no longer a licence but rather a simple notification (“mera comunicação prévia”) from the Owner (or Operator) addressed to the Mayor of the local municipality, providing basic information, proof of Business Registration with the tax authorities (“AT”) and Terms of Responsibility. In turn, the local Council communicates with the “One-Stop Internet Clearinghouse (“Balcão Único Electrónico”) that acts as the go-between, linking respective government entities such as the National Tourism Board, Tax Authorities (Finanças), etc. The Internet Clearinghouse is responsible for issuing the Local Lodging establishment’s identification number. With this ID number (within 30 days), the process is complete and the Local Lodging establishment can be opened for business. Keep in mind that, in the interim, the Local Council may inspect your property to verify the points presented in your notification.


Enforcement

Together with the “AL” symbol, this identification number must be displayed in advertising to
show that the offering is fully compliant. Failure to use the number and symbol can lead to a fine as high as €35,000. Accumulated with other offenses, penalties can surpass €270,000. “ASAE” (Authority for Food & Economic Security) is the official body responsible for oversight and enforcement. Needless to say, an inquisitive inspector can spot a missing “AL + number” on a web listing just as easily as perspective holidaymakers looking to reserve a leisure apartment or villa. Even the holiday websites could potentially face fines and legal action.


Tax Compliance

In the past, many owners letting to holidaymakers failed to declare their income. With business registration to Finanças now compulsory from the start, tax fraud should be curbed. In addition, with favourable assessment for this tourist activity under the Simplified Regime, most Owners will find themselves taxed at less than 4%. With tax rates so reasonable, it is no longer pays to cheat. In addition, there are no charges for the entire registration process.


Other Requirements

Nevertheless, some bad habits die hard. All bureaucracy has not disappeared. There are still some auxiliary requirements. Invoices must be issued by Owner/Operators to holidaymakers that must obey Finanças’ guidelines. In addition, when guests are foreigners, arrivals and departures to and from the Local Lodging establishment must also be reported to “SEF” (Immigration and Borders Service). Like other associated areas, those who fail to comply face steep fines.


“The Carrot and the Stick”

The message is clear. On the one hand, Owners/Operators find greatly simplified registration procedures, little tax to pay and no user fees for the set-up process. Most importantly, the business opportunity could not be better. The holiday season is rapidly expanding from a few, short summer months to 52 weeks per year.
On the other hand, enforcement has also become effective than ever before. Fines are staggering and, once the new legislation has taken effect, few tourists or local lodging websites will accept non-compliant offerings. With the new legislation coming into full force in January 2015, the coming months will provide the last chance to sort out any necessary actions to take full advantage of the promising opportunities and avoid the pitfalls of non-compliance.

Dennis Swing Greene is Chairman and International Tax Consultant for euroFINESCO s.a. www.eurofinesco.com
Who’s buying Overseas Property – according to Rightmove!
2014-11-20 12:58:24
As a valued subscriber to Rightmove, B&P Real Estate Agency has access to various data demonstrating trends within the Portuguese property market. I then cross check the data they provide with B&P’s own data and it appears we have very similar trends.

The 2 sets of data confirm that the average buyer is aged between 45- 65 and is in almost 70% of clients looking to buy second homes. The average price of enquiry uncannily is almost identical to B&P’s average sale value of around 300,000€.

Villas are by far the major enquiry type with almost 75% of the enquiries on Rightmove although B&P see that more even at around 54% for villas vs Apartments. The way people are buying is also quite interesting. Rightmove are saying that around 60% of the buyers are cash buyers and almost 20% financing but again we are finding almost 98% of our clients are cash buyers.

Comparing Portugal to Spain we see very similar trends with the only major anomaly being a more even split on property type with villas vs apartments at 50:50 in Spain.

So what does this all mean?

In short this means B&P are marketing in line with the market. Lagos and the western Algarve is a little more apartment biased versus other parts of the Algarve. Price points are on trend for the whole of the Algarve where clearly we see price spikes in certain areas but the overall pricing levels are consistent with Lagos and the west.
Average price enquiries for apartments in the Algarve according to Rightmove are around the 145,00€ mark while villas are around 300,000€. As I mentioned overall the average sales value at B&P is around this number. This would mean that B&P are actually achieving a slightly higher value for the average apartment price as well as higher prices for villas.

As previously mentioned B&P have experienced a huge increase in all aspects of the market be it enquiries, viewings and sales. The market is being fuelled by improved exchange rates, consumer confidence incremental markets such as NHR and Golden Visa and improved marketing from B&P.

Hopefully this will give you a better insight into how we analyse the market and our performance within the market in the hope that we can continually improve our overall performance and ultimately sales.
If you want to sell your property with a company that understands the industry and knows how to market within it give me a call. We are in need of quality properties for sale across the western Algarve.

Contact me: david@bpaproperty.com or 918473280
Indian Summer Sales
2014-11-04 13:39:21
Following a record month in viewings for September, October has eclipsed this by a further 20% in viewings and sales. The Indian summer for the weather has certainly been seen on the business front as well.

The French are here in full force with over 50 viewings during September and October just with French clients. Believe me my school French is really being tested as well as my Google translate on the PC!

It also appears that the larger budget clients are now coming through. Initially we saw clients with budgets around the 150-200k€ budgets. This made a lot of sense. As I have previously documented the French are coming because of a tax break allowing them to draw their private pension’s tax free here in Portugal based on them residing in Portugal for 183 days or more. Therefore if someone has a pension of 50,000€ per year they could be paying up to 30,000€ in tax. That means over 5 years of tax saving they could pay for their 150,000€ apartment! Clearly this news is filtering through France and it is expected that up to 20,000 French will be buying I Portugal over the next 5 years.

Clients with larger budget are now surfacing with a number of sales being made closer to 1,000,000€ in the last few weeks. This is consistent with the overall market which has been steadily improving over the year. Average sale prices have moved approx. 25% upwards versus 2013 again showing this consistent improvement.

B&P enjoy one of the best positions on the high street with their office on the main avenida. This again helps us capture or at least meet many of the buyers coming to Lagos. Our wide portfolio of properties again helps but we are still in need of new quality modern properties. I reported listing over 50 properties at the end of the summer and I am proud to say that we have actually sold almost 60% of those properties since the end of August. If you have been considering selling and would like a valuation or simply a chat about your properties prospects of selling mail me or call me on david@bpaproperty.com or 282764193.
Autumn Exchange Rate View
2014-11-04 00:00:00
Well what a September we had – cloud, rain and then sunshine! But the main topic of conversation… was Scotland going to go it alone? Or stick with the UK? We also saw the ECB cut all three of their main interest rates by 0.1%, and its refinancing rate to 0.05% which weakened the Euro, so it was a month of highs and lows for STG/EUR.

We started September STG/EUR in the mid 1.26’s, then we dropped to the low 1.24’s, we then saw it start climbing back up as voting day for Scotland was getting closer and then we saw the peak on the 19th of September as the vote came in as a ‘NO’ we got to the high 1.27’s.

As for STG/USD we have seen this quite weak over the past few weeks, however like the STG/EUR we saw a peak at 1.65 as the results came in on Scotland.

So is it time that we can sit back and not worry about the exchange rate? I would love to say yes it is, but the focus will now be on when will the Bank of England raise interest rates and how that will affect Sterling.

As we have seen over September the exchange rates can change in a matter of minutes, sometimes it is easy to see why but other times its hard to understand. It is key to keep in touch with your currency broker, as the rate in the morning can be completely different by the afternoon!

For an informal discussion contact Nick Jones of Premier FX on +351 912 211 446 or email nick.jones@premfx.com.
Local Lodging Registration Renewals - “Forewarned is forearmed” by Dennis Swing Greene
2014-10-14 14:05:39
The new legislation regulating Local Lodging (Decree-Law 128/2014 of 29 August) clearly defines registration renewals both in terms of what needs to be done and when it must be accomplished. Those who acquired permission to exercise Local Lodging under the prior statutes (as of 2008) must present a completed Business Registration form issued by Finanças at the local municipality confirming their business activity registration under CAE 55201 or 55204 (furnished accommodation for tourists) of Category B (sole traders). This presentation is to take place within the 30 days following the legislation coming into force on 27th November 2014.

Following this update and within the same 30 day period, renewing Owners/Operators will receive from the “Balcão Electrónico Único” (One-Stop Internet Clearinghouse) an “AL” Identification Number which is central under the new rules of Local Lodging.


Fines

There are stiff fines for failure to comply as follows:
Individuals - minimum:€ 2,500 - maximum: €3,740.94
Companies - minimum:€25,000 - maximum: €35,000
This procedure falls in line with the overall philosophy of this new legislation: “the Carrot and Stick Approach”. Obey the law and you will be rewarded with simplified bureaucracy and low taxes. Run afoul of the new rules and you face heavy penalties.


Options

This reporting requirement puts to rest the controversy regarding the optional nature of operating under Category B or Category F. As summarised above from the new legislation, only those registered in Category B (CAE 55201 or 55204 - furnished accommodation for tourists) can exercise Local Lodging.

Those providing accommodations to registered Operators for onward Local Lodging operations must declare under Category F (Rental Income). This form of income is taxed at a rate of 28%, 7½ fold higher than the rate for Local Lodging under Category B. For example, annual rental income of €15,000 will pay €4,200 in Category F as opposed to just €563 in Category B. In addition, Category F rental income cannot recover VAT paid on overheads as is normally the case under Category B.


Local Lodging Renewal

Those who thought they had sorted out their Local Lodging requirements now have an important task to accomplish to avoid steep fines and unwanted attention from authorities. If Non-Residents do not plan to be in Portugal in December, they should arrange for their Fiscal Representative to report to the Câmara. If no Fiscal Representative exists, this might be the chance to appoint one to handle such unforseen events. Some Expatriate Services Companies offer Fiscal Representation at no extra charge with their Local Lodging package.

The next option is to let your Property Manager handle the matter. Unfortunately, many managers, while skilled in property matters, may be uncomfortable handling bureaucratic issues. Finally, a friend or a neighbour might be kind enough to sort out the problem.

If you are still confused, there is still time to consult with an informed professional. Given the potential fines, it is vital to get it right. With the countdown clock ticking away, the time to take action is at hand.

Dennis Swing Greene is Chairman and International Tax Consultant for euroFINESCO s.a. www.eurofinesco.com
The rain is not dampening the spirits at B&P
2014-10-14 13:59:16
Well the weather has certainly changed and we are seeing some heavy down pours!

However this is not slowing the pace in the B&P office. The Lagos Long Lets has been our most successful launch of any of the websites we have introduced over the last 10 years. It picked up well over 300 likes on Facebook in the first 2 days and received over 1500 hits in its first 24 hours. This demonstrates the need for and interest in long term letting here in Lagos.

Victoria and her team are continuing to list some amazing new properties for both Long Let as well as Winter Let. See these as they go live on Facebook!

The sales office is also busy. In September we toured over 100 clients and we have scheduled in an average of 5 clients per day for October. This is resulting in record sales for B&P as well as massively up on a successful 2015. So if you are thinking of selling this is the time or if you are considering buying we are listing some superb properties. You can mail me direct on david@bpaproperty.com for more information.

Our office is like the United Nations at the moment with clients from almost every corner of Europe. Last year we sold to 15 different nationalities and this year is looking the same again. This is due to our extensive marketing programme that links in website optimisation to social media awareness to some of the best agency partners in the business. B&P Real Estate Agents still occupies the No1 spot in Real Estate Agents searches in Google. We have agents and presence in over 40 countries which is helping deliver clients from every corner. This should continue right through the winter and through to April next year, so definitely no rest for the wicked!

B&P operate in a transparent way which appears to suit clients and vendors as well as our partner agents & indeed developers. This means we have great contacts which deliver buying clients as well as new listings before a lot of our competitors.

All I can say is that it may be dark and rainy outside but we can most certainly see the sun shining here at B&P!
How Taxation works under 2014 legislation by Dennis Swing Greene
2014-10-02 17:11:34
COMPARISON OF TAXATION AS A PROPERTY MANAGER VS TOURIST AGENT

A Property Manager/Tourist Agent handles 20 properties and charges 20% for support services. With an average letting income of €10,000 per unit, total local lodging income comes to €200,000. Gross support services if furnished by the Property Manager are €40,000.

Tax: Operating as Property Manager VS as Tourist Agent - Companies have additional accounting overhead requirements that are normally between €2,500 - €3,000 p.a.

COMPARISON OF TAXATION OF OWNERS UNDER CATEGORY B AND F

Working with a Property Manager:
Property Owners earnings of €10,000 in Category B, after the 85% exclusion, have a taxable income of €375

Letting through a Tourist Agent:
With an average taxable income of €10,000 in Category F Property Owners are taxed autonomously at 28% = €2,800. 25% should be withheld by the Agent.
an increase of 750%

CATEGORY B OR F?

The difference between Category B and Category F should now be clear. Some Owners may have a choice. If they work with an Agent who invoices holiday stays, Owners will be treated as suppliers and are taxed in Category F. If the Owner invoices the stay directly (with the Property Manager invoicing support services), then both are assessed respectively in Category B.

VAT

When Category B income falls under €10,000 p.a., sole traders are VAT exempt. You cannot collect “IVA” from your customers nor do you present VAT declarations to Finanças. If income exceeds €10,000, you must file regular VAT returns. All legitimate expenses from your business activity should qualify. Because VAT is charged at 6% and most business expenses pay 23%, refunds are the norm. In contrast, all Category F is VAT exempt.

MORE THAN 9 LOCAL LODGING UNITS

When an Owner or Agent operates more than 9 holiday units, Local Lodging status changes to a Tourist Development. However, since there is no restriction preventing an Agent to register in both activities (as Property Manager and as Tourist Agent), it should be up to the Owner to choose which is preferable.


Dennis Swing Greene is Chairman and International Tax Consultant for euroFINESCO s.a. www.eurofinesco.com
Engaging…
2014-10-02 16:57:58
This is a word that seems to be a hot buzz word at the moment...

From engaging the Scots during the referendum, to engaging the 16-18 year olds in the political process in the UK, to engaging the kids at school or Tesco’s trying engage its customers to buy more at the supermarket. Everyone is trying to engage with someone!

At B&P this is something we have worked hard on for a number of years. Engaging, I guess, is just another word for trying to make the individual buy in to a concept or subject. At B&P we have been engaging firstly our team to buy in to the B&P philosophy of customer first. Followed by, attempting to engage our clients into a more consultative buying process in comparison to the style experienced with many of the portal agencies.

Buying an overseas property is in most cases the largest expenditure many of us will make outside of that of our own home. When making this investment it helps if the agency you are dealing with is experienced and knowledgeable, not only in the process but also in the geographical area you have chosen. At B&P Real Estate Agents we have this knowledge and experience. Not only in the industry and the locations but also each and every property we are marketing, something a portal agency will not have! To support this knowledge we listen. We listen to the client’s requirements, wish list and budget.

B&P pride itself in this consultative approach when either selling your property or assisting you to purchase the right property, in the right location and to suit those specific requirements.

This consultative engagement is what makes B&P stand out from our competitors. Of course we need to keep replenishing our stock and we continue to search out new listings on a daily basis. These new listings are communicated through every medium at our disposal from social media, to newsletters through to the new listing section on our website. We continue to raise awareness of our brand and website through these mediums meaning buyers are aware of every new property and sellers are experiencing a thorough and professional service of selling their property.

So, engaging maybe a new Buzz word for the TV presenters and Politicians but at B&P this is a way of life that we have worked towards for years, let’s hope this continues!
The home straight
2014-09-25 16:24:51
Well, the summer months have been very fruitful with plenty of clients and plenty of sales. And so we enter the final straight of 2014. 40% of our annual sales usually come in the last 3 months of the year so, we are expecting a very busy few months.

The French are back and viewing with their usual zest and the Scandinavians also are starting to drip through. They usually come in numbers once the short nights kick in in Sweden and Norway! So here at camp B&P we are all set for the busy period. The team have listed some great new properties and we have been busy meeting with many vendors and have moved many prices to be more competitive.

This now means we have some great new stock and some aggressively priced properties. Take a look through both the “New Listings” as well as the “Reduced” sections to see these new offerings.
The NHR scheme is still attracting new buyers from all over Europe and we are finding they are also looking for long term rentals. You will see from our second article that we have launched a new website & Facebook page specifically focusing on long term & winter lets. If either of these rental options appeal, let me know and we will contact you to discuss further.

So hold on to your hats for the final furlong and let’s hope we can either sell your property or find the perfect property for you.
Lagos Long Lets
2014-09-25 16:21:35
In recent newsletters I have talked in detail about the changing face of the market and the client’s needs and requirements. One of the changes is the move to long lets and winter lets as an option away from buying or as a try before you buy option.

This section of our business has been growing exponentially over the last 18 months. From a stand still start in 2012 we now have enough long let clients to devote a website to this sector of the market.

Long letting in the UK has flourished during the recession and it is thought that renting is the way forward where young buyers cannot afford to get onto the housing ladder. The cost of renting in London has now become cheaper to rent for the first time according to the Telegraph and this trend is spreading across the country.

So from a nation of property owners even the Brits are looking at renting as a viable option to buying outright.

We have also discussed the NHR scheme where Europeans can reside in Portugal and claim their pension tax free. Well they don’t need to buy, they can rent also. Because of this we are seeing a large number of French & Scandinavian clients renting long term.

To support this growing trend, we have now divided our long term renting properties from our Resort Rentals properties on a new bespoke website www.lagoslonglets.com. You can also follow us and see properties as soon as they come to market on https://www.facebook.com/lagos.long.lets

This website and social media site will allow you to be first in the queue for any new listing!

Winter letting is also a huge market waiting to happen. More and more people are looking to get away from the cold and enjoy a more temperate climate that the Algarve offers. This also fits well with owners who do not use their property in the winter and can now earn some revenue during the winter months and offset some of the costs.

This suits both landlords and renter perfectly. The owner can then use the property during the summer or rent it in the peak periods increasing the properties yield or simply reducing the running costs.

Finding clients to rent the properties is actually easier than finding quality properties. Our location on the main avenida in Lagos coupled to our marketing approach is delivering plenty of clients wanting to rent. However we need more rental properties, both long term and winter lets. Many properties are renting before we get chance to even put them on to the market. So if you want your property to give you a better revenue contact Victoria Johnson on info@resortrentalsalgarve.com
Taxation as a Sole Trader by Dennis Swing Greene
2014-09-17 10:02:12
THE SIMPLIFIED REGIME

The Simplified Regime in Category B (Self Employment) has had massive adherence by Sole Traders over the years. Currently, 99% of sole traders in Portugal pay their “IRS” through this scheme, while for companies, less than 10% have adhered.

The Simplified Regime offers Sole Traders a simple, cost-effective alternative to the traditional profit/loss method of accounting (“contabilidade organizada”). With assessment based on a fixed percentage of gross invoices, small independent businesses simplify record keeping, reduce taxes and increase productivity. Individual entrepreneurs whose annual turnover does not exceed €200,000 in 2014 (formerly €150,000 in 2013, and €100,000 at inception) qualify for the Simplified Regime.

FILING YOUR INCOME TAX RETURN

After completing your first year of business, it will be time to settle your tax on income with Finanças. The fiscal year in Portugal corresponds to the calendar year. Business activities fall into Category B and are reported on “Anexo B” in the second internet filing period in May. For Residents, net local lodging invoicing is added to other sources of income, such as pensions, dividends, etc.
Tax is calculated at marginal rates (14.5% - 48%).

Non-Residents are assessed at a flat rate of 25%. Although expenses do not normally enter into these calculations, you may need to keep expense records for reporting VAT.

Starting in your third year of operation, you will need to pay estimated taxes in 3 instalments. These Payments on Account are made in July, September and November with the final balance settled through the annual Income Tax declaration (“IRS”).

As the following chart illustrates, the Simplified Regime is not quite so simple any more. Formerly with just two categories, the scheme has recently expanded to five. Under this method of assessment, taxpayers do not deduct professional and business expenses against their annual income. Instead, taxable income is calculated by applying the following coefficients to gross turnover:

IRS: Category B
The Expanded Simplified Regime in 2014
- Sales of goods and services - Activities related to tourism (15% taxable rate);
- Liberal Profession business activities - profissões liberais/art. 151.º of IRS Code (75% taxable rate);
- Royalties, know-how and other income (such as capital gains, investment income, rental income) obtained in connection with activity (95% taxable rate);
- Non-business related subsidies (30% taxable rate);
- Business related subsidies - Other “service activity” income in Category B including vocation activities (10% taxable rate).

In 2014, the key innovation is in Service Activities with the new distinction for “Other Activities in Category B”. Art. 151º liberal professions (profissões liberais) – professions usually requiring advanced degree qualifications as opposed to vocational careers in non-academic skills and technical trades – continue with an exclusion limited to 25%. However, vocational services are allowed to exclude 90% of their invoiced income. This means that final taxable income is just 10% of turnover.

For example, Property Managers who coordinate various support services for Property Owners now qualify for this 90% exclusion on their fees. A €30,000 annual income pays less than €225 in “IRS”, a final tax rate of less than 1%. Compared to previous practices, the same income when reported as service income in 2013 would have paid over €6,300 in tax, based on the prevailing 75% coefficient. That’s a 28-fold difference!

Those in Local Lodging tourist activities also enjoy a substantial reduction in 2014 - albeit a bit less spectacular - with taxable income dropping to 15% from 20% last year. Resident Owners engaged in Local Lodging were taxed on one fifth of their invoices in 2013. Based on an income of €20,000, they would have paid €365. Now, with the coefficient decreasing to 15%, taxation on the same income falls to €220, a 40% reduction or just over 1% of total turnover.
Non-residents are levied a flat tax of 25% (or 3.75% of turnover).

Next: How taxation works under 2014 Legislation (Stay tunned!)

Dennis Swing Greene is Chairman and International Tax Consultant for euroFINESCO s.a.
www.eurofinesco.com
The lost generation…
2014-09-17 09:48:42
A few weeks ago I was talking about what the new breed of buyer is looking for. Large family spaces, modern high gloss kitchens and slick bathrooms. This subject has raised a number of questions and queries from clients and I believe the answer is coupled to the increase in popularity for long term rentals.

Why have we seen this change and why has it happened so quickly?

This I believe brings us to the subject of buyer dynamics.

The average age of overseas buyers in Portugal is around 45-55 year old. They have paid off their mortgages, saved enough money over their lifetime and are in a position to make the investment while still “young enough to enjoy it”!
When the recession hit in 2008 we saw areas such as Spain fall off the edge of a cliff while Portugal although hit very hard still managed to keep moving, albeit very slowly. The effects of the recession hit those of us who were highly leveraged or working to a budget, however the typical overseas buyer wasn’t really in that category. They had the cash, were not over leveraged and had saved enough money but they were not buying. You can fully understand this. The world was in turmoil and not many had the confidence to buy a luxury product that was a “want to have” rather than a “need to have” with all the commotion going on in the world.

The recession then went on for around 4-5 years and we started to see an improvement in 2012. And this is where the dynamics changed.
The 50 year old buyer in 2008 is now 56. Those 6 years appear to be quite significant in the world of overseas buyer dynamic.

Firstly, some of the buyers re-invested in the home countries. Some decided to hold on to their money; property prices had tumbled everywhere. But a lot of people simply re-evaluated their lives. They were now not prepared to invest a sizeable amount of their wealth into a “want to have” product. However they still wanted to live the dream and enjoy the 300+ days of sunshine places like Portugal offered. Therefore we saw the emergence of long term and winter lets.

This suited both the 50+ couple wanting to spend their time away from the cold in Sweden, Germany and even the UK but also suited the current property owner in Portugal who was not trying to balance the books on their investment in Portugal. Resort Rentals Long letting department saw an exponential growth in the number of enquiries and long let placements take place in 2012-2014, to the point where this is now a standalone business within our portfolio (watch out for Lagos Long Lets – to be launched soon!).

So this is where we have our lost generation. 6 years of buyers have been lost. Of course some are now buying again and some are renting. However some we have lost forever. But it is not doom and gloom! The new 45-55 year olds are back buying. Sales patterns are rivalling 2007 and we now have a new market of long term and winter letters. Property always sells! For more information or to share your view share or send a comment.
Banks or Property? Fantastic new off plan development in Lagos
2014-09-04 11:41:18
Based on the way the Banks have been performing over the last few years and now in Portugal even what you would think was the safest of banks running into difficulties it makes you wonder where should you invest your money.

I know what I am going to do!

Following the superb sell out of the first 2 phases at Santo Amaro Apartments, Lagos and then over 60% sell out of the last phase under construction, Lagos family builder Rodrigues & Vermelho are about to release a new contemporary apartment complex in Porto de Mós, Lagos.
Most of the properties will have a superb sea view the others will have a pool view. There will be a range of 2 & 3 bedroom apartments as well as an amazing true penthouse (not just a top floor apartment but a real/proper penthouse). This apartment will have private access by lift to the entrance directly from the garage and enjoy balconies with views over both Porto de Mós and Meia Praia beaches. Walking distance to both Porto de Mós beach and Lagos historical town centre will make these apartments extremely popular.

The properties will follow the hugely successful formula used at the Santo Amaro development. Contemporary finish, fully equipped modern kitchens, solar panels, heated swimming pools and gymnasium. It will have large floor to ceiling windows allowing the light to flood in and extra-large terraces offering indoor outdoor living.

However, the best news is that B&P Real Estate Agents has negotiated an exclusive selling period just for our clients. You have the opportunity to reserve your apartment prior to the formal release ensuring you get the exact property you want. We have also agreed payment terms and assignable contracts making this the best investment opportunity we have presented since before the recession.

Completion of the development will be in the summer of 2017 and a small deposit could initially reserve your apartment leading up to a 10% deposit on signing of the promissory contract.

If you are either planning to buy an apartment in the future or simply looking for a sound investment opportunity this could really be a great opportunity for you.

For further details on how to reserve your apartment email me on david@bpaproperty.com
Social Security for Sole Traders by Dennis Swing Greene
2014-09-04 11:33:04
When you begin an activity as a sole trader, you must be registered with the Social Security if you have not already done so previously. Since 2007, self-employed persons are no longer required to inform the Social Security office directly at the start, suspension or termination of their professional or business activity; this information will be automatically communicated to the Social Security Institute (Instituto da Segurança Social, I.P.) by the Portuguese Tax Authorities (“AT”).

The following outlines the procedure that is followed for registration with the Social Security Administration.

WHEN:
Even though implementation may be deferred, registration takes place immediately following the “Início de Actividade” of the business activity.

WHERE:
The local Social Security Office in the area of residence of the sole trader.

HOW:
Completion of the Identification Form and, in the case of foreign workers, a Supplementary Identification Form (standard forms), along with the Work Visa or the authorisation to reside or stay for non-EU citizens.

WHY:
Because Social Security is mandatory in Portugal and in the EU.

NECESSARY DOCUMENTS:
• Identity Card (or Birth Certificate or Passport);
• Declaration of commencement of activity for tax purposes (Início de Actividade);
• Social Security Beneficiary Card, if already registered;
• Tax identity card in the case of sole traders carrying on a commercial business activity.

EXEMPTIONS
Payments to Social Security are calculated on 29.6% of self-employment income declared in the previous year.
Those currently contributing to Social Security regimes (including UK “National Insurance”) in another country or receiving Social Security benefits, such as “old age” or “state” pensions, are eligible for full exemption.

When an individual’s annual taxable self-employment income falls below the minimum (6 times the monthly minimum wage: €419.22 X 6 = €2,515.32 p.a.), the independent worker is also eligible for exemption. In the case of Local Lodging, since only 15% of the income is taxable, this 15% is the part subject to Social Security contributions. With this in mind, the gross threshold for exemption threshold rises to €16,768.80 when practising Local Lodging. Above this amount, you may still be eligible for partial exemption.

Next: nº3 - Taxation as a Sole Trader (stay tunned!)

Dennis Swing Greene is Chairman and International Tax Consultant for euroFINESCO s.a.
www.eurofinesco.com
Outdoor space – The perks of living in the Algarve
2014-08-27 16:40:26
Whether it´s a modest balcony, ground floor terrace, wrap-around garden or maybe something much larger still; your outdoor space is the most important “room” of your property during the summer months, although it´s sometimes the last to be considered when you are investing money and time on improving your property for your own enjoyment, and perhaps also promoting it to potential clients.

The summer holidays may be coming to an end in the UK but here in the Algarve the summer weather continues for many more weeks… so the good news is that it´s not too late to invest in your outdoor space if you haven’t got around to it yet. Even better, this is the best time of year to get some great deals on outdoor furniture and accessories while still having plenty of time in 2014 to enjoy them.

Here at Abode we have some great late-season offers on our outdoor sofa and dining sets including the Cube Balcony Set (was €599, now €499) and the California Double Sun Lounger Set (down from €899 to €599)… and some super-savings on outdoor accessories including the Triton 3 Burner Gas BBQ currently reduced from €499 to €399.

For more information you can contact a member of our friendly and multilingual team at info@abode-group.com or call us on the following numbers UK: 0870 803 2970 or PT: +351 282 762 070
Vive la France – part Deux
2014-08-27 16:35:16
Earlier in the year I wrote about the French appetite for property here in Lagos. The vibrancy of the town and its year round facilities definitely appeal to many French clients.

We have seen a summer full of French number plates and the restaurants packed with more French and Scandinavian customers than ever before. Some restaurants are saying they have seen a 30% increase in business versus 2013 and I believe this is, in part, due to incremental business coming from these countries.

Reports say that more than 20,000 French will be buying here in the Portugal over the next few years and that around 2000 have already bought, I know B&P have made a significant contribution to that number already. French buyers have become one of our core markets and at certain times of the year equate to around 50% of our sales.
So what exactly is it that Lagos and surrounding areas have that the French love. Well in a lot of ways there is a similarity to the Portuguese people and their way of life that is helping. Their love of food, wine and a relaxed approach to life seem to be the same. Yes the French are more demanding but that seems to fit well with the calm and easy going side to the Portuguese nature. Long lunches and family values again add to this similar culture.

So why is this important to the property market?
I believe that all these factors are making for good investment. Based on an average price of 300,000€ for a property and then multiplied by 20,000 purchases this equates to around 6 billion euros of investment in our adopted country over the next few years. On top of that the taxes and stamp duty will add up to around 400M€ of revenue for the Portuguese Government.

Added to this, many of the purchasers are buying because of the NHR scheme, allowing pensioners from around Europe to relocate to Portugal and claim their pension’s tax free. Again, if 20,000 people, earning an average of 20,000€ in pensions per year, are residing and then spending a proportion of that money here in Portugal, that has to be a good thing for the Portuguese economy. That’s 400M€ a year arriving through the Portuguese banks every year.

From this everyone is benefiting. Be it shops, restaurants, bars, petrol stations and of course the poor estate agents. But also those of you looking to sell your property for whatever reason now have a new outlet that simply wasn’t here 2 years ago.

So there we have it! That’s why restaurants are up 30%, that’s why the supermarkets seem busier than ever before, that’s why we have more French number plates than ever before and that’s why we should be welcoming the French with open arms.

Yes they are demanding, yes they view twice as many properties before buying and yes they seem to want it all, sea view, location close to town, modern finishings and at the right price. But that is just part of it, let us remember these people are investing in our adopted country to make it stronger than it was and currently is.

Vive la France!!
Registering a local lodging business activity by Dennis Swing Greene
2014-08-21 17:02:10
“HOLIDAY LETS” AS A BUSINESS
If you let out furnished accommodations directly to holidaymakers on a short term basis, you are engaged in tourist related services (Category B) and are required by law to have a Local Lodging Licence.

While this type of activity has more checks and balances than conventional renting, it also receives special tax treatment under the “Simplified Regime”. In other words, you are only taxable on 15% of your invoiced income with the other 85% being automatically excluded to cover business overheads. Normally final tax rates are below 4%.

REQUIREMENTS:
Before you start your holiday let business activity in Portugal, you must first register with the Tax Authority (Finanças) via an Início de Actividade (business activity registration). This can be done online or at the local tax office.
Running your Business...

You are required to keep books to track your income and expenses. While old-fashioned ledgers still exist for this purpose, most people opt for a computer bookkeeping program to track their business income and expenses on a regular basis. There are over 100 such programs that Finanças has approved.

VAT
Like any business, you must register for VAT. If you are letting directly to holidaymakers under a Local Lodging license, you lose VAT exemption when your annual income exceeds €10,000 in a given year. Tourist related activities charge the lowest rate (currently 6%). Business expenses normally pay 23% (in Madeira, 5% and 22% respectively). The difference between the two is either paid to the State or credited and refunded to you. Quarterly declarations are made electronically via Internet and are in Portuguese only.

If your activity is via a Tourist Development, your activity is classified in Category F and is VAT exempt whatever the volume of business.

NON-RESIDENTS
Non-Residents need to appoint a Fiscal Representative specifically to meet VAT obligations. In addition to the normal appointment procedures, a Non-Resident must issue a Power of Attorney to the Representative to answer any fiscal matters directly with Finanças.

“Recibos Verdes electrónicos” (Green Receipts)
As in all business activities in Portugal, you are required to issue invoices to your customers. Mandatory receipts (“Recibos Verdes electrónicos”) must be issued electronically via the Internet (Sistema de Emissão de Recibos Electrónicos - SERE).

PORTUGUESE INDIVIDUAL INCOME TAX
An “IRS” declaration must be filed in April / May in the following fiscal year. Most will find the Simplified Regime to be both simple and economical when compared to standard accounting practices. Gross income is reported on Anexo B. In 2014, Local Lodging activities enjoy an exclusion of 85% to cover business overhead. This means you are taxed on only 15% of your invoiced income.
It is essential that Owners invoice Holidaymakers directly and not through holiday management companies. If the latter were the case, the exclusion drops to only 25%. On an income of €10,000, this equates to an assessment of over €3,000 as opposed to under €220.

Next: nº2 - Social Security for Sole Traders (stay tunned!)
Dennis Swing Greene is Chairman and International Tax Consultant for euroFINESCO s.a. www.eurofinesco.com
Busy Bees…
2014-08-21 16:57:20
Following a super first half of the year selling more than 2 properties per week across the 6 months our stock was looking depleted at the end of June. Therefore we set ourselves a tough target to get ready for the autumn with as many quality new listings as we could get before the end of August. Well I can tell you that Paul and the girls have done a sterling job. Over 50 new properties have been listed and there are some superb opportunities within those. In fact I would say every single property in its own right offers a great opportunity for the right buyer.

Vendors are being very realistic to current trends on pricing and all the properties are priced to sell.

We have some amazing plots in Porto de Mós with incredible sea views, Stunning villas in Caliças, Porto de Mós and Luz. Off plan projects in Salema, Fortaleza and Meia Praia and apartments across the whole area between Lagos and Salema.

You need to take a look in the new listing section of the website to see the full list of new properties. But you may have to be quick. 73% of the properties we sell have been on the market for less than 6 months. In fact we have sold around 10 properties in the last 2 months that were new listings!

However we are not satisfied. We still want more!
If you have your property for sale we want to talk to you!
If you have been looking to buy and not found what you want we want to talk to you!

The French will be back soon along with the Scandinavians. It has been reported that over 20,000 French will buy property in Portugal over the next few years and if the number of French number plates is anything to go by they are already well on their way to that number.
So remember Sell, Buy, Rent or Manage, B&P works harder for you…

Contact me directly on david@bpaproperty.com
Chasing the rate!
2014-08-08 15:56:37
Most of us who live abroad, have a holiday home or are contemplating a move, keep an eye on the published exchange rate either in the press or online. And when certain levels are reached, we are often spurred into action. Some of us keep a casual eye on things, others monitor the market on a daily basis or more – chasing the rate.

Small movements in exchange rates do have an impact on how far your money can go, especially for large transactions, but for smaller, regular transfers, does it make that much of a difference? Well, two recent examples illustrate this very well indeed:

Mr & Mrs S were transferring £315,000 to Euros to buy a villa in Portugal. The rate at the time was 1.2475 but they were keen to achieve 1.2500. The difference? €788. Certainly worth having and spending some time on.

Mr B was sending funds to top up his local bank account. £1500, again into Euros, and looking for the magical 1.2500. The difference for him? €3.75. Worth making 2 or 3 international telephone calls for? It does make you think!

Either way, there are things we at Premier FX can do to save you the time and effort of chasing the rate – whether its simply monitoring the market for you continuously or fixing rates for future needs, be they larger one-off or regular small transfers. So let us help you, allowing you more time to enjoy the nicer things in life!

Contact us today:

Nick Jones - Email - nick.jones@premfx.com

- Phone - +351 912 611 446

- Website - www.premfx.com
What are clients expecting from their property search…
2014-08-08 15:52:07
For sure the market has picked up. Sales trends are rivalling that of the peak in 2005-2006 but what has changed since that period?
Well the number of potential buyers has returned and indeed they are buying but there is a significant difference in their expectations.

Prior to and during the recession many domestic properties in the UK and across Europe experienced huge overhauls. Instead of moving home many people decided to improve their current homes. Kitchens were being knocked through to make large family rooms with kitchens, dining and family rooms. The traditional living room is becoming either incorporated into this room or being a special room for relaxing at the end of the day. This new room has become a multi-purpose room.

Also the style and standard of kitchens in many households has moved on massively. High gloss units, in-built coffee machines, ice makers and wine chillers are all becoming a standard feature in many homes. Bathrooms were being turned into wet rooms with rain showers, installation of roll top baths and stylish cabinets along with 3D tiling and magazine quality finish has now become the norm.

And because of this we are now seeing a change in many of our client’s expectations. They still like the traditional touches such as patterned tiles, archways and bougainvillea climbing the walls but they are looking for so much more when choosing their home in the sun. The properties we are selling are generally those that have had or have been designed to have modern touches. Of course you need to present your property using the same old standards as ever, clean, tidy and de-cluttered but properties with modern kitchens, stylish bathrooms and fresh contemporary tiles are the ones that are either selling quickly or at least getting the viewings. It is not a new phenomenon for properties with smart kitchens & bathrooms to get higher levels of interest this is old news, the difference is the number of properties on sale here in the western Algarve out-weighs the properties that have undergone this makeover. Of course this is always dependent on the current owner being in a position to undertake these improvements. However this needs to be a consideration when you are setting your own expectations on the achievable price. Clients are walking into properties with a high level of minimum requirements.
When these are not met the next stage is to look at how much it would cost to improve the property from your current to their standard.

The new buyer is more experienced than before the recession. TV shows, magazine articles and a general rise in exposure to high quality goods are raising the bar in what people are looking for in their holiday homes. It is now just not enough to rely on location, view and the sun. People’s homes are status symbols of their life. The “mod cons” are now prerequisite and without them clients are feeling the properties to be inadequate. Many times I have said if I had 50 contemporary houses I could sell them all! This is becoming more and more prevalent.

I understand it is not possible for every vendor to invest thousands improving their property for this new age buyer; however the properties need to be valued accordingly to compensate for any improvements the property may need. The kitchen may suit your needs perfectly well but the new buyer often sees wooden doors in kitchens and the lack of a rain shower as passé and are viewing the property working out how much it is going to cost them to make it perfect for them.

Remember properties are selling but the properties that are selling fast are the properties that are either full of the contemporary finishes or priced to allow the new owner to install them!
If you need any advice on how to market and value your property appropriately I am happy to give this help. Contact me on david@bpapropert
Long term rentals revisited
2014-08-01 16:22:43
Especially since long let contracts can be used for the application of non-habitual residency, long term letting is a growing trend for quality properties around Lagos. It gives prospective residents the opportunity to get to know the town better and try out an area before committing to buy a property. At the same time, for property owners who haven’t been able to sell, it may give them the freedom to move on with their plans.

For most cases of long term rental that we arrange, the contracts are for 12 months with the option to renew for an equal periods. Common is a 90 day notice period on both sides, and for utilities (water, electricity, gas and telephone/internet) to be paid for by the tenant. No cleaning is generally included.

With this type of rental, the rental license (known in Portugal as Alojamento Local) is not required although a current energy efficiency certificate is now necessary for long lets.

You should always work with a contract to protect both parties. The contracts are produced in triplicate and once signed by both parties, are registered with the Portuguese tax authorities - there is a stamp tax for this registration at 10% of 1 month’s rent. Income should be declared and taxed at 28%. However, maintenance, repairs, condominium fees, IMI and insurance can all be offset against the income.

Should you wish, the property could be marketed for both sale or rent simultaneously until a client is secured but it should be taken from the sales market once a tenant is secured.

For more information please contact victoria@resortrentalsalgarve.com
What is important to you: beach or town access?
2014-08-01 00:00:00
On meeting the various clients that we tour with the view of purchasing their ideal holiday home we find they split in to two distinct camps. Town centre access or beach and sea view.
So which do you fall into? I have tried to detail some of the decision factors of these two different locations based on the geographical dynamics and social benefits of Lagos and surrounding areas.
Firstly beach with sea view. This is arguably one of the most difficult styles of property to find in Lagos but a little easier in Luz. Because of the way Lagos sits on the coast line the main beach area that actually has properties on it is Meia Praia. This faces south south west, which sounds great. The issue here is the volume of properties on this stretch of coast line along with an even lower number of real quality properties that this coastline deserves. The town itself actually faces north north east from the main Avenida. This again poses a problem in that anything facing the bay loses sun at around lunchtime! So if you are looking for that sea view property where should you look? Well as previously mentioned Meia Praia offers super views and lots of sun. Other locations in Lagos would be Praia D’Ana but again here there is a shortage of properties. So the most probable location would be Porto de Mós. Pretty much dead south facing this area has an abundance of quality properties most with good to excellent sea views. New developments are planned (Rodrigues & Vermelho has a new project to start later this year – contact me for details) also as well as some great plots (such as bpa4123-b again contact me for details) where you can build an amazing 4 bedroom villa with immediate sea views. Praia da Luz offers some great views and is again south facing. A little built up nowadays but still a real favourite for ex-pats and holiday makers. Plots and a range of properties from as low as 130,000€ are available through to luxury ocean fronting villas and plots are available.
So what about properties with town access? These are generally located on the opposite side of the river in Lagos from Meia Praia and create the cluster of properties that has made Lagos famous over the years. From the cobbled streets in the old town centre to the uber modern apartment complexes at Santo Amaro and around the area of São Sebastião. The area known as Lagos is broken down in to 4 smaller areas called Freguesias these areas offer varying options from real holiday properties to residential urbanisations and even rural areas. São Sebastião and Santa Maria were two separate locations splitting Lagos city in two but recently this has changed and the Câmara now classes Lagos as one Freguesia. The next are the areas of Bensafrim & Barão de São João the third is Luz in its own right and finally Odiáxere. The 4 areas make up the modern day municipality of Lagos. Confused? So back to town access. Of course the main areas offering real access will be both Lagos and Luz. For Lagos the areas within the city walls offer traditional living in a traditional location. However it is very difficult to get a great sea view form here. Some properties have it but not many and those that do have a north north east aspect. Areas such as Cerro de Mós as well as areas around Lidl, Torraltinha and Santo Amaro offer great longer term living experiences as they are superbly located for everything in the town and access is generally by foot rather than car. However the trade off from great accessibility is views as most of these areas offer little to good sea views. Therefore you will find the standard of the finishes is often higher than that of a sea view property! As for Luz you can get the best of both worlds. Most properties even the more residential areas offer some type of view. Areas in Montinho de Luz not so much but over all you get both. The town is much quieter in the winter and you may find your trips to Lagos a daily one but access to the beach, town and shops is all by foot.
So the decision is yours. Great access and walk to everything or great views and beach but a walk into town…
For more advice or simply to discuss which option is best for you contact me on david@bpaproperty.com
Reporting Local Lodging Income: Q&A by Dennis Swing Greene
2014-07-24 10:12:31
It should not come as a surprise that how income is declared is not a personal preference but rather a matter of law. There have been several rulings by Finanças stating categorically (IRS Circular nº5/2013 and others) that Owners letting directly to holidaymakers (less than 30 days) is viewed as a tourist business activity and must be reported in Category B. Category F is reserved for either “long-term” rentals to residents (more than 30 days) or “locação turística”, the ceding of a property to an agent for ongoing letting to tourists.

1) Question: Do I have to pay Social Security contributions?
euroFINESCO: There are various full and partial exemptions that apply to most situations:
a) many people are eligible for full Social Security exemption if they already contribute to or are beneficiaries of a National Insurance system anywhere in the EU and beyond;
b) those earning less than €16,768.80 in Local Lodging income are also fully exempt;
c) those who earn more have contributions based taxable income (15% of gross Local Lodging invoices) and should be eligible for partial reductions from the normal contribution of €145.

2) Question: As a business, will there be complicated accounting/reporting requirements?
euroFINESCO: Unless income Local Lodging income surpasses €200,000 p.a. (unfortunately not a likely event), most Owners will fall into the “Simplified Regime” and are assessed after an 85% reduction exclusion of their gross invoicing.
Suffice it to say that the “Simplified Regime” is one of the few things in Portugal that truly lives up to its name. 99% of Sole Traders in Portugal elect to operate under the Simplified Regime when opening their business activity.

3) Question: Do I have to issue invoices to holidaymakers?
euroFINESCO: Yes, this is a requirement. However, a good service provider, like euroFINESCO, can carry out this inexpensive service as well as include simultaneous mandatory reporting of arrivals and departures to “SEF" (Immigration and Borders Service) at no additional cost.

4) Question: Should I charge VAT?
euroFINESCO: When income exceeds €10,000 pa, the VAT charged to holidaymakers is just 6% as a tourist activity. Most operating expenses must pay 23% in VAT. Due to this 4-fold difference, refunds are the norm.

5) Question: Is there other reporting to entities that regulate business activities?
euroFINESCO: Yes, but once again, most standard services are included at no extra charge in EuroFinesco’s Local Lodging Plan.

TAXATION:Now to the crux of the matter, let us compare the taxation of income under the two categories:
Under Category B, a non-resident Property Owner with earnings of €10,000 in Category B, after the 85% exclusion, has a taxable income of €375, less than 4%.
Under Category F, on the same income taxed autonomously at 28%, the assessment is €2,800, an increase of 750%.

In conclusion, recent changes in legislation have helped to: a) remove the impediments of bureaucracy, b) clarify and streamline procedures and c) focus on what is truly important: Growth via Compliance. They assure that all players follow the same rules.
Amongst other goals, the Simplified Regime tax savings are designed to encourage and stimulate this newly recognised and important segment of the tourist industry. Creating a reasonable compliance environment with sensible taxation levels may come as common sense to some and revolutionary to others. Whatever your perspective, this is the system now in place and compliance is a must.

Dennis Swing Greene is Chairman and International Tax Consultant for euroFINESCO s.a. www.eurofinesco.com
Should the investor start to invest again?
2014-07-24 09:53:08
Should the investor start to invest again?

During the noughties investors were buying and selling a rate of knots. Many made a killing with prices moving on average 10% every 6 months. This came to an abrupt end in 2008 when the crash happened. The builders started to off load stock in an attempt to clear as much debt as possible and some investors took advantage of this. Unfortunately even some of those seasoned investors did not expect what happened between 2009 and 2011. Further drops, reaching as low as 40% below 2007, prices meant that those late investors got seriously burnt along with some of the more seasoned ones from earlier investments.

We are now seeing a stabilising of the market, and property prices settling down. Vendors needing to sell have sold and prices are now around 30% below their heady prices in 2007.
So is it time for those of us looking to invest to look at overseas property again?

My view is yes. There are some great buys out there currently. Not because they are 30% below previous price points but because this does appear to be the bottom. Property prices will increase. Not at the rate we saw in the noughties but over the next 10 years they will increase. We have just seen another bank wobble, share prices are recovering but still unstable so where better to put your savings than into bricks and mortar.

I was told once that over the last 100 years property has increased on average 10% per year every year! Now I am not saying we will see that level of growth in the next few years but it has to be better than sitting in an unstable banking institution and also giving you and your family some pleasure over the next few years. If you get more than 1% increase per year over that period you are as they say “quids in” if it stays the same you have had free holidays for the next few years either way a better investment than in a bank account!

As mentioned in previous newsletters the leading builders are building again. There are some superb projects coming to market that will allow you to release money slowly if necessary. Changes to pension’s funds and the release of your pensions are due soon and as mentioned last week if you reside here you can claim your pension tax free. If that’s not enough reason to take the plunge…

If you want to discuss any of these points or just want to chat through the market email me on david@bpaproperty.com
Algarve Senior Living
2014-07-17 14:20:07
Between 10% and 33% of Europe’s population would like to retire abroad. With Europe’s retiree population nearing 100 million, a large number of 50+ want to retire to warm, sunny locations.

For the majority of those who move overseas, purchasing a property has been the predominant solution. Now, a flexible retirement and long-stay rental solution for the 50+ market is also available in the Algarve, making it easy for those who wish to retire abroad, to spend winters in the sun, or to experience life in this part of the world before committing to a property purchase.

Algarve Senior Living is for seniors who enjoy an independent lifestyle, with privacy yet plenty to do and a community of people who share interests and hobbies. Algarve Senior Living offers a quality lifestyle that is fun, flexible and affordable. For the active, independent senior looking to spend all or part of the year in your place in the sun.

Lifestyle, Friendships, Money, Tax, Easy access to family, etc. this is what most people who move or retire abroad consider important and at Algarve Senior Living, we address all these aspects.

Algarve Senior Living’s solution offers several key advantages, such as,
- Flexibility: winter stays or permanent residence;
- Choice: 1 or 2 bed homes, sea or country views. Upsize or downsize during your stay;
- Cost-effective: no property purchase required (although you can buy if you wish!);
- Tax efficient: Zero or low tax on pensions for new residents. No inheritance or wealth taxes if you rent;
- Community living: meet new people, create new interests, develop hobbies, settle in faster;
- Smart use of capital: use tax-free pension benefits on yourself, or downsize back home and fund your lifestyle and health abroad;
- Our promise: flexibility to move between our villages, priority when doing so;
- Ambassador program: earn extra income by referring friends.

Our pilot Algarve Senior Living village location is in a uniquely beautiful setting on the outskirts of Carvoeiro, with both sea views and expansive country views. The single floor and double storey 1 and 2-bed apartments (of approximately 55-60 m² and 110-130 m², respectively), townhouses and semi-detached villas offer a range of options to even the most demanding visitor. All properties have wireless internet access and are serviced twice weekly (including a weekly change of linen).

On-site there are a range of facilities, including sporting options such as tennis and lawn bowls, restaurants with tranquil bar areas, and many walking paths and quiet areas to relax. The Algarve Senior Living monthly cost includes a comprehensive range of products and services.

Come and experience the lifestyle and the advantages for yourself by making the most of the try-before-you-decide option or take advantage of one of the special offers, including an October special which includes tickets to the World premier week of Blind Faith: the musical.
Tax Free Retirement for Brits...
2014-07-17 14:17:09
If you are nearing retirement or for that matter retired you may take advantage of the NHR (Non Habitual Residency) scheme enabling you to draw your pension here in Portugal tax free.

Qualifying individuals include all EU/EEA/Swiss nationals, including British nationals.

In short you need to be a resident here in Portugal and also own or reside here as well. You then need to spend more than 183 days a year here but the rest of the time you can spend back in the UK or your home country.

Under the NHR law, a flat rate of 20%* (less than half the highest taxpayer rate of tax) will be levied on any income originating from Portuguese sources, work conducted in the country or foreign income not taxed or subject to taxes at source.

In practice, most double tax treaties (conventions) allow for the taxation of income at source, but many countries do not exercise this right if the person is non-resident. It thus follows that, under the NHR law, most foreign income will be tax-free. It will also be important to analyse each sub-category of assets, such as dividends, royalties, bank interest, etc. in order to ensure that maximum tax relief is obtained in each case. The use of a suitably qualified tax advisory professional is recommended and the investment in this is quickly recouped (costs will vary depending on complexity of an individual’s financial affairs).

The NHR law provides an excellent solution for pensioners as well as liberal professionals such as consultants, company directors, doctors, dentists, architects and engineers, and anyone promoting active investment in the country. Occupational pensions, as long as deemed not to be sourced in Portugal, are exempt under the NHR law.

For more information or simply a chat through to see if this could work for you, email me at david@bpaproperty.com


* In 2013 there is a 3.5% surcharge imposed on all personal income tax in Portugal, linked to the ending of Portugal’s bail-out from the EU/ECB/IMF
Exchange rate worries?
2014-07-09 16:20:16
Most of us keep an eye on the headline exchange rates, but what happens when the exchange rate is against you?

The first thing you think is “I’m losing out! I’m not getting what I wanted!”

What we would like to say is, don’t worry, there is always a solution.

At Premier FX we listen to your needs. We then go through the options to secure the best rates for you. We all know it’s all well and good while the rate is in your favour, but what happens if you have a large sum, or regular payments that you need to transfer and the rate is working against you?

When this happens there are solutions.

Premier FX can offer fixed rates for up to 2 years and can look at fixing rates for regular payments on a monthly basis. This can protect you against a fluctuating exchange rate and will give you peace of mind.

Over the past few weeks the STG/EUR interbank rate has stayed above 1.24 and at one point reached the 1.26 mark, so for those of you transferring from Sterling to Euros, it has been in your favour.

However, for those moving money back to the UK it hasn’t been the best month in which to do this. This is when it is key to talk to your currency broker for advice. As we said earlier, there are always options.

Please feel free to contact me directly to discuss your requirements. You can email me at nick.jones@premfx.com or call me on +351 912 611 446.

At Premier FX we are here to make your currency transactions stress-free and simple.
Brick by Brick…
2014-07-09 16:19:09
Following several very difficult years for the local construction companies, where we saw some come to a sticky end whilst some of the more established companies simply hung up their trowels, we are now seeing cranes on the sky lines of Lagos once again.

2008 saw a lot of panic from the builders as they were half way through building new projects with huge investments on the future. As the crash unfolded we saw building sites left unfinished as well as unsold developments left empty and some swallowed up by the banks. Some of the larger resorts such as Oceanico and Vigia felt this the worst with both companies undergoing difficult times and in the case of Vigia - liquidation. Smaller construction companies and development companies in Lagos as well as the surrounding area also closed their doors during one of the deepest recessions in the last 50 years that hit us all.

But it appears that brick by brick, the construction companies are recovering, Mira Lagos and Rodrigues & Vermelho, two of the largest and most successful companies in the region are building new developments again and Jose A Viegas is developing across the region offering his unique style and standard to some of the area’s most luxury villas.

Added to this, the banks are now releasing older repossessed developments that had been mothballed following repossession to the market. Rumours are rife that even The View 2 at Salema is going to be re-started in the next few weeks or months.

Developments across the Western Algarve are now cropping up with new apartment complexes being built in Porto de Mós, Torraltinha and Amejiera which are all coming to market in the next 6 months.

The builders have not been resting on their laurels with new specifications raising the bar in quality and luxury. The introduction of the new energy ratings means constructors are designing with all this in mind, and Santo Amaro the latest development by Rodrigues & Vermelho has been awarded am A+ certificate, the highest rating available.

Added to this is the arrival of many French and Scandinavian clients who are again increasing the pressure on to the builders ensuring they keep raising that bar.

For more information on new developments give me a call on (00351) 918 473 280 or email me on david@bpaproperty.com
Local Lodging Legislation - an Update *
2014-07-02 12:25:23
It is unusual to see an area of regulated business activity where so many recent changes represent such substantial improvements. Whether it be creating minimum standards for hygiene and safety, clarifying compliance obligations for Owners and Agents or creating alluring levels of taxation, current legislation helps to protect the consumer while opening opportunities to the entrepreneur. It also means that within the tourism industry, there can be a level playing field where no one gains unfair advantage by ignoring the Law.

Some of the fiscal changes may come as a surprise. The lowering of tax rates in the Simplified Regime comes in contrast to across-the-board increases in taxation in Portugal. At the same time, the most vulnerable sectors of the population have suffered substantial cuts in pensions and wages. All in the name of “Austerity”. Could this simply be a trick to entice the non-compliant to join the system before catching them in an overtaxed and under-earning squeeze? Any answer to such a cynical question could only be speculative. So let’s view matters from a more optimistic perspective.

First and foremost, Local Lodging in particular and Tourism in general are phenomena driven by market forces, not government policy. Holidaymakers come to Portugal because they are attracted to what the country has to offer: a sunny, warm climate; a beautifully diverse land; rich historical heritage; competitive prices; political stability; a kind and hospitable people. These are just a few of the many reasons why Portugal has become a popular choice.

Over the course of the recent boom in Local Lodging, the conventional hotel industry has also shared a period of prosperity. Hotel occupancy rates are at record highs and the outlook for continued growth is encouraging. The recent advent of “low cost” air travel hubs in the major Portuguese airports has brought millions more visitors than ever before. Lisbon and Oporto are now “in” destinations with annual hotel occupancy levels averaging above 70%.

To the surprise of some, the multiplication of Self-Catering Accommodations has not come at the expense of traditional hotels. To the contrary, it is the most fundamental law of economics - supply and demand - that is driving this boom. Recent legislative changes have only removed impediments of bureaucracy, streamlining procedures and focusing on what is truly important: Growth via Compliance.~

The Simplified Regime tax savings are designed, in part, to encourage and stimulate this newly recognised and important segment of the tourist industry. As long as Local Lodging remained in the realm of the underground economy, the country achieved only meagre benefits from any growth. The reason is simple: cheating on taxes is usually across-the-board, not isolated to one tax or another. It is a way of thinking. Compliance can also become contagious. Accepting to pay one tax makes it easier to pay others. Once again, it is a state of mind.
Those caught out of compliance face aggressive enforcement and steep fines.

Encouraging entrepreneurial activity is healthy in an economy fraught with high unemployment. In fact, stimulating Sole Traders to become economically independent is far more cost effective in getting people back to work than cumbersome, expensive and often unproductive “job creation” programs.

You may be wondering if the politicians really have such a vision. We have become so accustomed to short-sighted technocrats with little or no imagination that it seems hard to believe that some would finally create policies that actually work. Whatever the case may be, it is only fitting to applaud and encourage these sensible changes. Let’s hope that there is more common sense to come.

* This article is an excerpt from eBook nº 31 -“The Local Lodging Handbook: the complete guide for Owners, Property Manger and Tourist Agents”, available from euroFINESCO s.a.

Dennis Swing Greene is Chairman and International Tax Consultant for euroFINESCO s.a.
www.eurofinesco.com
Now’s the time…
2014-07-02 12:22:35
If you have been tracking the pound versus the euro over the last few years you will realise that the current high of 1.25€ to the pound sterling is the best it has been. We have now had a consistent period of a strong pound of at least 2-3 months and this is really affecting buyer’s decisions.

The movement of just 5 points on a property being sold at 200,000€ could represent almost £7000 saving on the purchase.

This is helping further strengthen the market and sales are continuing to be strong. Clearly this only affects the UK market, we are definitely seeing an increase in sales, enquiries and viewings from this sector of the market.

This is not so good if you are selling with the intention of taking the money back to the UK and it may be best to hold the money here in Portugal if you can. The major currency exchange companies are indicating that this current “high” is a temporary one and by Christmas the rates will be back around 1.20€ to the pound, if not lower. Therefore if you, it may be best to wait a while before transferring your euros.

So, if you are considering buying in Portugal now is the time; a half million euro property could cost you around £17,000 less at these current rates. That saving would pay for most of your legal costs or a superb furnishing package in the property.

We have been listing heavily recently and have a super range of properties available at all price points, take a look on the website in the “New listings” section to see what is new to the market.
The Chef Affairs - Private Chef & Catering
2014-06-19 08:43:26
Are you on holiday and you want to dedicate yourself to rest and relaxation? Here, at The Chef Affairs we can take care of shopping and cooking of any type of meal that you would require, whether it be breakfast, lunch or dinner, leaving your kitchen as immaculate as we found it. We will work with you to tailor make your personal menu. Also, in addition to these services, we can also do all your food shopping; we will stock your fridge, freezer and cupboards, leaving you free to truly enjoy your holiday.

Our personal chef and catering services are based on a cuisine using only the best local, fresh and seasonal products: using excellence from the ocean, from the Algarvian countryside, from the farms in Alentejo and from wineries all around Portugal. We pride ourselves on serving only the freshest of these foods. Mixing those amazing fresh Portuguese ingredients with Mediterranean flavors and Italian techniques and creativity, we offer you what we like to call a Portuguese-Mediterranean fusion and through our experience and our customer's feedback, it seems to be working very well!

For further information on our BBQ and a la carte menu, set menus and prices, please visit our website: www.thechefaffairs.com and Facebook page: www.facebook.com/thechefaffairs

Contact: Tel. +351 917 00 92 38 email: info@thechefaffairs.com
Suits you sir!
2014-06-18 16:05:01
When you are deciding on which area of the western Algarve to focus your property search in, there are many different factors to consider. Here, I´ve tried to list some of the key selling points for each of the main areas of the region in order to help you choose.

So, starting West!

Sagres
Sagres offers great value for money versus the rest of the south coast, here, prices for 2 bed apartments start as low as 122,000€ while a 5 bed villa will cost you around 365,000€. Sagres appeals to those who love beaches and water sports such as surfing.

West Coast
Similar to Sagres, although even more “surfy”, there are some great bargains to be had on the West Coast. From 3 bedroom villas in Carrapateira for 249,000€ to a range of villas in Vale da Telha under 250,000€. This area is more rustic and wild, while the beaches are stunning, some of the best sunsets in Europe can be seen on this coastline!

Salema
Salema offers high quality properties with amazing sea views; the popular linked villas on The View sit within an upmarket resort with reception, security and swimming pools, making them ideal for a first overseas purchase. There are lots of eateries in Salema nowadays along with a gorgeous beach to enjoy, Salema is ideal for those looking for a getaway.

Budens
Budens incorporates the main Parque da Floresta golf resort along with its sister resorts, Quinta do Montinho & Quinta da Encosta Velha. This resort offers high quality properties in a secure environment, there are 2, 3, 4 and 5 bedroom properties able to please all budgets. There is great value to be had in the resort currently and a great range of properties to suit all requirements. Parque da Floresta is located very close to Salema making this a great base to enjoy both Lagos and the West Coast.

Burgau
Burgau is a long-time favourite for a lot of people, a small fishing village featuring a wide range of properties; from small fisherman’s cottages to resort properties, to some of the region’s most exclusive villas in Cama da Vaca. Burgau has a gorgeous beach as well as some high quality restaurants, it´s a great place to enjoy relaxing holidays. Close by is the popular resort of Alma Verde which offers Eco-designed villas in a calm and safe environment only a short drive from the beach.

Praia da Luz
Luz has long been a favourite destination for ex-pats living abroad. During the summer it gets very busy and the beach bulges with holiday makers, but in the winter Luz is very calm, so an ideal place to buy if you plan to spend your winters in the Algarve. Prices vary around Luz with some of the most exclusive properties commanding the highest prices, while cottages and apartments in the centre are selling at very reasonable rates.

Luz villages
There are a number of small villages dotted around the outskirts of Praia da Luz. Montinhos da Luz is one such example being just a few minutes from Luz, offering residential and holiday living in an urbanisation of 3 and 4 bedroom villas which are all at sensible price points. Other areas such as Espiche, Almadena and Ferrel offer value for money with large properties of 3/4 bedroom villas with pools being marketed for 399,000€.

Lagos
Lagos is the main town in the area and steeped with history, there are several areas to touch upon.

Lagos Centre
Lagos centre is pretty much within the city walls or just outside; we would describe Lagos centre for any property within the ring road of the N125. Here you will mainly find apartments or traditional townhouses, houses within the city walls don’t spend too much time on the market as they sell quickly. There are a number of developments close to the centre of the town offering superb properties with swimming pools and gymnasiums as well as parking, sea views and walking distance to everything. No wonder Lagos centre is popular! Lagos is actually a city and so does not close down for the winter, it makes no difference whether you come in January or July as there is always a great atmosphere to enjoy.

Meia Praia
This is the largest beach in the region at 6 kms long. There are a number of resorts and urbanisations along this stretch including the upmarket Caliças area to resorts such as Jardim da Meia Praia and Quinta de São Roque. All of these locations have great access to the beach and the Marina. Stretching further along the beach is Vale de Lama which offers tranquillity as well as amazing views. We have both apartments and villas in this area, ideal for those looking for peace and quiet!

Marina de Lagos
The ever popular Lagos Marina has it all, great views, great properties at a range of prices as well as off marina properties, places like Encosta da Marina, Marina Park and Marina Village, all offering great value versus actual marina properties yet just a few minutes’ walk away. From this area you can access the beaches in a few minutes as well as Lagos centre within a 10 minute walk.

Atalaia
This area is located between Boavista Golf resort and Lagos, personally, I always describe this area as one of the up and coming areas. Predominantly villas or linked villas, Atalaia offers an almost countryside location yet only 5 minutes from the centre of Lagos. There are 3, 4 and 5 bedroom villas available at seriously lower prices than some of the more exclusive areas such as Caliças and Funchal Ridge. Boavista Golf resort is also in this area offering superb golf living in a range of 2 bedroom apartments, 3 and 4 bedroom villas as well as a super golf course!

Funchal Ridge
Arguably the most exclusive area of Lagos with the best post code; all the properties in Funchal offer magnificent views over Lagos and Luz within spacious plots. If you want an exclusive villa with space to enjoy around you then look no further than Funchal Ridge.

Odiáxere
This area offers countryside living yet is still close to the beach and town of Lagos, there are a number of properties sitting on great sized plots enjoying lots of privacy. Access to Palmares golf is very easy as is the access to Lagos and Meia Praia beach.

Porto de Mós
This area splits in to two areas itself, the new and the old. The old area has some amazing villas in areas such as Canavial, we currently have a gorgeous villa on sale at €1.195m with superb views out to sea. There are also great apartments in the Ancora development for as little as 200,000€, this area is walking distance to the beach and the centre of Lagos as well as bars and restaurants. The second area is the newly developed area of Porto de Mós where you will find some of the most modern villas in the town as well as stylish apartments with sea views. If a view is what you are looking for, then Porto de Mós is for you.

Lagos Villages
There are a number of little villages surrounding the town such as Sargaçal, Bensafrim, Arâo and Portelas, these villages again offer countryside living with easy access to Lagos. Prices vary but there are some great bargains to be had in areas such as Colinas Verdes or Sargaçal. Large villas sat on large plots. These are the locations where you probably get most for your money, 2 and 3 acres of land and a substantial property.

B&P have properties in all these locations. If you would like to discuss which area would suit you best or just to chat through what options we have for you, email me on david@bpaproperty.com or call me on 00 351 918 473 280
Foreign property sales on the up!
2014-06-13 14:07:45
Those of us who keep abreast of such matters and who regularly see the news in the press, will be aware that UK house prices are finally rising again. In fact, in some parts of the market – particularly London and the Southeast – the growth is causing concern for the government who is naturally concerned about a return to the “bad old days”. This move obviously heralds a return in consumer confidence, but is this reflected in those seeking to buy a holiday or retirement property abroad?

Here at Premier FX, we help many would-be buyers with their transfers to support purchases abroad and we are seeing a certain, if gentle rise in such transactions, particularly across Europe. As a sponsor of the highly successful property show, “A Place In The Sun – Live”, we exhibit twice a year and the last exhibition at London’s Olympia at the end of March was arguably the busiest yet. It seems the number of Brits now actively looking for and actually buying homes in the sun is rising steadily, and this echoes the evidence of estate agents who mostly report increasing sales.

This factor, coupled with recent rises in the Pound to Euro exchange rate, could certainly support the view that now is a very good time to consider buying your very own “place in the sun”!
Ready for the summer
2014-06-13 14:05:31
The sun is definitely here to stay and at B&P we have been working hard to get ready for a busy summer.

We have been listing heavily over the last few weeks and have some superb new properties on our books at various price points. From traditional villas in Canavial to contemporary villas in Porto de Mos, from apartments for 130,000€ in Luz to luxury new builds here in Lagos.

We are anticipating a busy summer to follow our very busy winter and spring periods, when we sold over 10m€ of property in the first few months of this year!

Now is most definitely the time to buy, exchange rates are very strong and the highest they have been for a least a couple of years, whilst sale prices have now settled at approximately 35% below 2007 prices. There are certainly some great bargains to be had as well as some great properties in super locations.

We are now planning for the autumn and are still looking for long let or winter let properties. If you do not use your property in the winter, then please let me know as we have a waiting list of clients wanting to rent your property over the winter.

If you are thinking about selling, now is the time to act. Historically, January and September were the best times to put your property on the market but that has since changed, summer time has now become a key selling period for us, contact us for a free valuation and listing.

I await your call on 00351 918 473 280 or email me on david@bpaproperty.com
2014´s Best Kept Tax Secret
2014-05-28 11:27:27
The Simplified Regime, established in 2001, has had massive adherence by sole traders over the years. At the same time, it has failed miserably with companies taxed under IRC. Currently, 99% of the self-employed pay their IRS through this scheme, while for companies, only 15,000 out of 160,000 joined this system.

Over the past 14 years, the Simplified Regime has offered the self-employed a simple, cost-effective alternative to traditional profit/loss methods of accounting. With assessment based on a fixed percentage of gross invoicing, small independent businesses simplify record keeping, reduce taxes and increase productivity. Individual entrepreneurs whose annual turnover does not exceed €200,000 in 2014 (formerly €150,000 in 2013, and €100,000 at inception) qualify for the Simplified Regime.

As the following illustrates, the Simplified Regime is not so simple any more. Formerly with just two categories, the scheme has recently expanded to five. Under this method of assessment, taxpayers do not deduct professional and business expenses against their annual income. Instead, taxable income is computed by applying the following coefficients to gross turnover:

IRS, Category B - The Expanded Simplified Regime in 2014

Sales of goods and services; activities related to tourism: Taxable Base 15%

Professional service activities (profissões liberais) as per article 151.º of IRS Code: Taxable Base 75%

Royalties, know-how and other income (investment income, capital gains, rental income) obtained in connection with the activity: Taxable Base 95%

Non business related subsidies: Taxable Base 30%

Business related subsidies and remaining income in category B including vocation activities: Taxable Base 10%

Clearly, a major innovation in 2014 is in the sector of Service Activities with the new distinction for “Other Activities in Category B”. Unlike professional services (profissões liberais) – professions usually requiring advanced degree qualifications as opposed to vocational careers in non-academic skills and technical trades – that remain with an exclusion limited to 25% (originally 35% at inception), vocational services are allowed to eliminate 90% of their invoiced income. This means that final taxable income is just 10% of turnover.

For example, Property Managers who coordinate diverse support services for Property Owners now qualify for this 90% exclusion on their fees. A €30,000 annual income would pay less than €225 in “IRS”, a tax rate of less than 1%. Compared to previous practices, the same income when reported as undistinguished service income in 2013 would have paid over €6,300 in tax, based on the prevailing 75% coefficient.

Those in Sales and in Tourist Activities also enjoy a reduction in 2014 - albeit less dramatic - with taxable income dropping to 15% from 20% last year. Resident Property Owners engaged in Local Lodging were taxed on one fifth of their invoices in 2013. Based on an income of €20,000, they would have paid €365. Now, with the coefficient decreasing to 15%, taxation on the same income falls to €220, a 40% reduction or just over 1% of total turnover. Non-residents are levied a flat 25% (3.75% of turnover).

Many will applaud these modifications. Not just because they will pay less tax but, equally important, these measures promote growth and reward compliance, fundamental values at the heart of any sustainable tax system. There is no faster or better way to promote employment. Entrepreneurial spirit is fostered, self-reliance encouraged, two more essential values at the heart of any healthy economy.

When tax rules go unheeded, all taxes are lost, not just one. While some “IRS” revenue may be sacrificed, VAT collections at 23% and Social Security at 30% will more often be collected with the State coffer a net winner. Why so little attention is being given to these constructive changes by the media, politicians and accounting professionals is curious to say the least.

Dennis Swing Greene is Chairman and International Tax Consultant for euroFINESCO s.a.
www.eurofinesco.com
What Is Fractional Ownership?
2014-05-28 11:22:04
Have you ever considered owning a property in Portugal but then worried about the running costs or even the cost of buying the property? Well, there could be a less expensive way of owning your dream holiday home.

Fractional ownership originated in the US, where following a series of bad press regarding time shares, this new hybrid evolved. Instead of just buying time that you could use for only one week a year, Fractional Ownership allowed you to actually own the property along with a series of other owners.

Fractional Ownership, believe it or not, was pioneered in Europe by Parque da Floresta and became a large part of their business over a 10 year period from 2000 to 2010. Fractional ownership allowed you to own a share in the property and share the usage as well as the running costs. In 2004 the resort changed the ownership scheme into UK limited companies which enabled owners to buy and sell their shares in the property rather than having to change the freehold ownership. In Portugal, especially, this was expensive and time consuming so the ability to change share ownership made the sales process quick and easy.

Following the demise of the Vigia Group, the Fractional Ownership scheme faltered a little, however there are still hundreds of content owners enjoying their dream homes on some of the leading resorts in the Western Algarve. Fractional Ownership properties are available on Parque Da Floresta, The View, Quinta de São Roque as well as Boavista and even some of the Oceanico resorts. Fractional Ownership options can be on any type of property from 2 bedroom apartments at Quinta de São Roque to 3 bedroom townhouses at Parque da Floresta or even Luxury Villas on the Parque.

The properties are furnished to the highest specification and usually a sinking fund is set up between the owners. The weeks are then allocated on a rotational system which enables each owner to use all 52 weeks of the year over a set period of time which really is the most efficient way of owning a property. Instead of owning the property outright and ending up only using it for 10-12 weeks of the year, you could own a quarter share fraction and only pay for the weeks you use…

So, if you have always wanted to own a property in Portugal but worry about the initial cost and then the running costs, perhaps you should consider Fractional ownership. I have a range of properties across all the resorts mentioned available for sale. The scheme is safe and secure, enabling you to own a property on a luxury resort as well as offering professional management and even letting of your property.

If you would like further details or even just a chat about fractional ownership email me on david@bpaproperty.com
What about a long-term let?
2014-05-20 15:50:08
Long term letting is continuing to be a real trend here in Lagos and in the past few weeks we have had scores of clients coming through our office door looking for a property to rent. So much so, that the demand is now outstripping our supply of properties to rent out! So, if you’ve been thinking about letting out your holiday home long term then now may just be the time to act.

There are many situations which may make long term letting a suitable option for a second home owner, if your situation has changed and you are no longer able to visit your holiday home as often as desired, or perhaps your property has been on the market for a while now then it may be worth considering a long term rental.

Deciding whether to rent out your property for a long term let is a big decision, and there is some work involved with the renting of the property which may not be as easy to do from abroad but with the help of a specialist rental agency, the process can be simple. We can look after everything right from the start, taking attractive photos of your property and then advertising it on our website which comes up on the first page of Google search results.

Once a suitable tenant has been found, we deal with all the necessary legal work and move the tenants in. After they have settled in, the agency remains the main point of contact for any possible issues that could arise and we deal with any problems quickly and professionally.

We currently have clients searching for:
• 3 bedroom family property in/near Burgau
• Apartments within walking distance of Lagos, either ground floor garden or sea view
• Countryside villas
• Luxury modern sea view villas

If you are thinking about letting out your property long term and would like some more information, please contact Victoria, victoria@resortrentalsalgarve.com or 00351 282 771 132
The complete package
2014-05-20 15:48:17
How do you go about choosing the right agent to either sell your property or help you to search for your new home? And what about after sales support?

Well, there are a number of factors to consider, but on the whole it has to be the one that offers you the best service, and at B&P we offer the complete range of services to all our clients.

Lawyers – we work with a range of lawyers with varying experience. All the lawyers we recommend offer efficient and professional help, as well as always calling you back!

Money Transfers – this can make a significant difference to the price you actually pay from your home currency to euros. Premier FX offers a friendly and professional service and works with you to get the best rate possible.

Location – B&P and Resort Resales are located in the most prime position in Lagos, right on the Avenida which is the main walking entrance into Lagos old town, ensuring that your property is seen and is available in this prominent position.

Management - Resort Rentals offers professional yet friendly support to the running of your property. We set this side of the business up with the experience we gained at some of the largest resorts in the area, and coupled the experience to a small company approach regarding customer service. Now at over 150 properties, this strategy is clearly working!

Rentals – from the initial contact through the website or through portals we offer a smooth and professional service in the organisation of your holiday. We meet and great every client to ensure their holiday is seamless.

Property services – be it gardening, swimming pools, small maintenance jobs or a full refurbishment, our team of work men offer quality of work along with competitive pricing all while being fully project managed by our experienced property managers.

Online accounting – Resort Rentals offers a fully transparent online accounting system which allows you to see your current balance, moneys paid in or out and what for. Also allowing you to keep a check on holiday bookings, be they your personal holidays or rental bookings.

Personal Property Manager – Resort Rentals property managers offers a friendly and experienced approach to the management of your property. Working with you to ensure your property is always in perfect order.

In short it is all about the service. From start to finish B&P can offer you first class service. Whether it is buying your property, selling your property renting your property or simply assisting you to enjoy your holiday….. B&P work harder for you.
QNUPS - Qualifying Non-UK Pension Schemes
2014-05-14 11:57:21
QNUPS - Qualifying Non-UK Pension Schemes

Qualifying Non-UK Pension Schemes came into existence in February 2010 but have been overshadowed by the overhaul of the legislation on QROPS - Qualified Recognised Overseas Pension Schemes - by HMRC last year. An omission in the original QROPS legislation of 2006 meant such overseas pensions could have been subject to IHT, which is not the case with UK pensions. So in February 2010, HMRC rectified this in law which provided for the creation of IHT-exempt overseas pensions, in the form of QNUPS. The statutory instrument defined that all QROPS are also QNUPS, that is to say they benefit from the IHT exemption.

Essentially, not all QNUPS need be QROPS. To put it in context, two identical pension schemes could be established outside the UK. One is registered with HMRC and therefore becomes a QROPS; the other is not, but by virtue of it being a qualifying pension as defined by UK law, is free of all the reporting requirements to which QROPS are subject.

QNUPS were therefore effectively an entirely new structure, enshrined in and fully protected by UK law. Just as importantly, they possess certain unique features that created significant planning opportunities for clients in the right circumstances.

QNUPS are suitable for UK tax residents and non-UK tax residents. For the former, it is normally recommended that those considered high net worth or ultra-high net worth are really suitable for QNUPS. For them to consider QNUPS and they may have used up - or be likely to use up - their UK tax-relieved pension lifetime allowance, which falls from £1.8m to £1.5m from 2012, or they may already be using their full £50,000 annual tax-relieved pension contribution allowance.

Foremost among QNUPS’ attractions is that any assets placed in them are generally immediately 100% IHT-free. This differs from a UK pension, where, if death benefits are paid from any company or personal pension after tax free cash has been taken, although there is no IHT, a 55% tax applies on death.

It should be taken into account that there is always the possibility of HMRC challenge, if it felt that the scheme has been used, for example, as death bed planning or clear IHT avoidance. However, it also important to note that there is no penalty charge for this and the individual would just be returned back to where they were (less fees) if they had not contributed to the QNUPS. Therefore it is paramount that each individual's circumstance must be analysed by a professional and qualified adviser.

QNUPS must be used as a pension, and any contributions must be appropriate and proportionate to their personal situation. Some people have questioned how £500,000 or more can be considered a valid pension contribution and commentators suggested that this is simply too much money. However, with UK registered executive pension schemes this would be considered only a medium sized contribution and for some older schemes it would have been considered a small contribution. So this is clearly not a valid concern and what constitutes an appropriate contribution depends on an individual’s wealth and personal circumstances.

You certainly cannot put everything you own into a QNUPS because you need to retain enough funds on which you can live comfortably, although governments are pressing for everyone to make substantial improvements to personal pension planning to reduce reliance on public support in retirement.

Any scheme such as a QNUPS or international pension plan can invest in almost any asset which includes private shares, residential property or event art, although if an income stream is required then it is the assets that can generate a steady and liquid return at retirement. Portugal has some very generous tax breaks on pension income and if the jurisdiction where the QNUPS is held allows for the income to be distributed gross, then you may also benefit from the Non-Habitual Residence status to receive pension income free of tax in Portugal if you qualify.



This article is intended to provide a general review of certain topics and its purpose is to inform but NOT to recommend or support any specific investments or course of action.

Raoul Ruiz Martinez is a resident and independent consultant for Finesco Financial Services Ltd., Glasgow and advises private clients on financial investments in both the UK and throughout Europe under MiFID regulation. He can be contacted at the offices of euroFINESCOs.a. either by telephone on 289 561 333 or on email Raoul.Ruiz@Finesco.com.
How easy is it to buy a property in Portugal?
2014-05-14 11:53:08
I get so many clients walking in to the office who are daunted by the prospect of buying a property abroad. But is there any need for this nervousness? Personally, I don’t think so, people have heard all sorts of rumours from Spain where properties have been sold illegally or the land doesn’t belong to the owner, in fact just generally negative press about the whole crash in the market place.

However, Portugal is different to Spain in many ways, in Portugal the whole process is a lot easier to understand and also the conveyance is much more straight forward. The process in Portugal is helped by the notary ensuring various checks have been undertaken prior to the deed.

Firstly, your lawyer will always undertake a full due diligence check on the property. Here the lawyer will ensure that the property being checked is the property you are buying, also checking that the financial state of the property is clear – any finance, debt or liens on the property are highlighted. Further, a full check into the current ownership of the property will be done i.e. is the person selling the property in a legal position to do so. After all these checks completed, there should be no doubt that what you are buying is legally registered, financially clean and the seller has the ability to sell the property to you.

The second step is the signing of the promissory contract. This contract is exactly what its title suggests, a legal promise signed by both parties, or the assigned power of attorney if a party is absent, the contract has a series of conditions that have been agreed again by both parties written down. At this stage a deposit is paid by the purchaser, there is a clause following the signing of this contract that states that is the purchaser pulls out of the sale they will forfeit their deposit. However this contract also protects the buyer as if the seller reneges on the sale he would have to return the deposit but also pay the equivalent value as form of compensation to the buyer, although this almost never happens! The promissory contract will also include a date where the final deed needs to be signed.

Following the signing of the promissory contract, the purchaser then has time to sort out finance or move monies around. The normal period is around 6-12 weeks dependent on the buyer’s personal circumstances although this process can be done much quicker, as quick as just a few weeks, it is normal to expect around 2-3 months. Once finance has been sorted the contract is ready for signing, at this stage the signing of contracts is moved to the Notary office. The lawyers, sellers and buyers will attend the notary (unless power of attorney has been given to the lawyer, then just the lawyers would attend) and present the purchase and sale to the notary. The notary then double checks that all is in order with the seller is the legal seller, that the buyer has paid the taxes relevant to the purchase and the property is either free of debt or any debt will be settled at this time. Sometimes the banks will attend this contract signing to either take their cheque directly from the seller or sometimes to give the cheque to the buyer.
Following this contract signing in front of and witnessed by the notary, the property is legally transferred into the new owner’s name.

Although there is still a lot of work for the lawyer to do, as far as you the buyer is concerned you can go to your new property with the knowledge that the property is now yours!

The lawyer will then start the legal process of changing legal ownership at the land registry into your name, transferring the utilities into your name and finally they will produce a full pack that contains all the legal documents appertaining to the property.

And that is that. The purchase is legally sound, all the necessary and various legal checks have been made to ensure the property is in a condition to sell and finally, transferred into your name.

At B&P we always recommend the use of a lawyer and we work closely with 3 or 4 lawyers that always offer the level of service that firstly B&P expect but also that our clients expect and deserve. The lawyers are all English speaking but we also have French, German and of course Portuguese speaking lawyers to hand.

Above all the process is safe, especially if you are working with professionals and at B&P we can ensure this will be the case from start to finish. For further information email me at david@bpaproperty.com
Capital Gains Tax
2014-05-08 16:01:04
It has come to that time of the year again; when everyone who has received income has to declare it to the Tax Authorities, which is always a concern to ensure you have all your papers and calculations right.

Whenever non-resident taxpayers earn Portuguese-sourced income (namely, profit made from the sale of a property located in Portugal), they are required to file tax returns, when this has not been subject to withholding tax at the applicable flat rates.

Capital Gains Tax in Portugal is payable on the profit made from the sale of any asset, which may be a share in a company, a property, or any other assets.

Sometimes, people forget that even if no Capital Gains Tax (CGT) exists, and so no profit was made from the sale of a property, you still have to make the declaration to the Tax Authorities to prove that, in fact, you are not liable for tax, in relation to the sale of the property, under the penalty of having to pay a fine, for not submitting the declaration/tax return.

Capital Gains Tax should be declared between April 1st 2014 and April 30th 2014, if the declaration is submitted in paper and is regarding a possible CGT from 2013. If the declaration is to be submitted online (via the Tax Department’s website) and is also regarding a possible CGT from 2013, the declaration should be submitted in between May 1st and May 31st 2014.

Capital gains relating to properties purchased after January 1st 1989 are assessed to be taxed at progressive rates, for Portuguese tax residents, based on 50 percent of their value and as for non-residents, the current rate for the CGT is 28% of the full profit amount. In relation to possible CGT due for the sale of land for construction hat had been previously purchased, it is always subject to tax irrespective of the date of acquisition. Portuguese tax residents, who are selling their primary residency and who subsequently re-invest the profit in another permanent residence, do not have to pay this tax.
Early start to the summer
2014-05-08 15:58:41
Following a fantastic first quarter with record sales and enquiries, business continues to improve in to the second quarter.

The French are still coming in their droves, as you have probably noticed from the number of French number plates on all the cars in Lagos and surrounds.

The early start to the summer has given us great weather as well as helping to make conditions to sell people their new home a lot easier.
That being said we are in need of quality properties for sale as almost 50 properties have been sold since the turn of the year and we need to keep topping up. So if you have been thinking about selling now is the time to act. We need sea view apartments, city centre properties, villas with sea views villas with country views as well as 1, 2, 3 & 4 bed apartments. We have clients waiting for their ideal property to come available.

Key locations vary, but Praia da Luz, Meia praia, Caliças & Albadeira as well as Boavista, Atalaia and Porto de Mos are all areas where we have clients waiting.

B&P are working hard to sell all the properties we have on our books but need new & fresh properties, remember over 70% of the properties that we are selling have been on the market for less than 6 months.

Either email me direct at david@bpaproperty.com or call in to the office for more information.
A Business In The Sun….
2014-04-19 09:24:46
Have you ever thought about moving to Portugal and living here permanently? However, does retirement seem a long way off? Well there could be another way. . .

Owning and running a business in the Algarve is easier than you think. The Algarve offers many options for families to relocate and continue their careers, albeit a different one.

Imagine bringing up your kids where they go to the beach every day and enjoy the outdoors more than their PlayStations. . . the Algarve offers all this, and what's more, owning a business out here could be the key for you to start enjoying a life here. At B&P we have for sale a number of businesses; hotels, Quintas with holiday accommodation, bars and even a swimming pool complex on Meia praia beach.

One example is Quinta Misquita in Sargaçal. A 9 bedroom Quinta separated into a 3 bedroom villa and then 6 individual bedroom annex, the property can be rented out as a whole or just part. This business has a regular client base and also trades throughout the year. There are few properties of this size on the market and while the summer months are full of holiday makers the winter months fill up with sorts of bookings for outdoors pursuit’s enthusiasts, training courses and out of season training for various sports organisations. Priced at 865,000€ this business offers a healthy return on the investment and a super lifestyle for its owners.

Another example is a small business of 4 individual cottages and a separate main residence sitauted in the small village of Figueira near Salema, all for rent throughout the summer season; and priced at only 395,000€, this business could be an easy way to escape the rat race.

Finally how about owning one of the most popular and iconic bars in Lagos? Rosko’s bar located right in the town centre has style written all over it, recently refurbished this establishment gives a great return and priced at only 350,000€!

If any of these opportunities sound like they could be your escape, give me a call on (00351)918473280 or email me on david@bpaproperty.com for more information.
IRS 2013: Procedures - nº 5 - MARITAL STATUS: How should you report?
2014-04-19 09:19:31
Who said marriage was simple? Or being single, for that matter. But when it comes to tax time, it’s best to be informed so you make the best of your lot. Over all, marital status works as follows: single, widowed and divorced taxpayers submit an individual return; couples must file a joint declaration. Separated couples who are not divorced may file separately. This is usually advisable since both spouses are responsible for meeting all fiscal obligations under a joint return. All unmarried couples living together for more than two years, whether of different or the same sex, may also file a joint return.

The following questions and answers should point you in the right direction.
QUESTIONS AND ANSWERS:
I got married in October. Should my wife and I file separate returns for the period of the year that we were still single?
No. You may only file a joint return because it is your status at the end of the tax year that counts. This, in fact, should work out to be in your favour since a couple normally pays tax less tax than two individuals.

My boyfriend and I have been living together for several years. Should we file separate returns or can we file jointly?
While either is possible, unmarried couples may file a joint return and both must sign the return. To qualify for this status, you must have been living together and registered with Finanças at the same address for at least two years. This status applies to both heterosexual and homosexual couples. It’s a good idea to run a simulation before finalizing your return to be sure which status is most advantageous.
Attention: While unmarried couples are treated the same as married couples for IRS income tax purposes, there is no carryover of this equality to other forms of taxation. This is especially important in planning for Inheritance Tax. Unmarried couples normally have no succession rights, with marital and/or blood relations taking precedence. While Estate Planning is advisable for everyone, it is imperative in the case of unmarried couples.

My wife and I broke up last year but we are not yet divorced. Do we still have to file a joint return or can we now file separately?
Both ways are accepted although your circumstances may make separate returns more practical. If filing individually, remember that both cannot claim the same dependents or deductions.

My spouse passed away last year in May. How should I declare?
The death of a spouse must be reported in the tax return. The survivor submits a tax return, ticking the widow/widower box for marital status and reports the fiscal number of the deceased. Both incomes, as well as deductions and credits, need to be reported on the appropriate annexes.
In some instances, the estate may generate income prior to final resolution that will need to be reported as well. If there are complications or delays in the settlement of the estate, it is strongly advisable to seek professional advice.

I am divorced and pay alimony to my “ex”. Am I eligible for tax relief on these payments?
Yes but only partially. If you pay court-ordered alimony or child support, there is a 20% tax credit for court ordered payments up to a maximum of €419.22 per month.
You will need to provide the Portuguese Fiscal Number of your “ex”. In certain instances, this requirement can prove awkward if the “ex” has never lived in Portugal and does not have a tax identification number (“NIF”).

Dennis Swing Greene is Chairman and International Fiscal Consultant for euroFINESCO s.a. Private consultations can be scheduled in Funchal (Sé) at 291221095, by e-mail at info@eurofinesco.com or on the internet at www.eurofinesco.com.
IRS 2013: Procedures - nº4 - FILING EXEMPTIONS
2014-03-26 17:14:10
Before 1989, a conscientious Foreign Resident, wanting to declare income from abroad, would have been turned away at the local Finanças office… The reason was quite simple: under the former tax code called “Complementary Tax”, only individual income derived in Portugal was taxable; therefore, most income from abroad was exempt. Sadly, those days are long gone and all but a meagre few are expected to declare their worldwide income as Fiscal Residents of Portugal.

QUESTIONS AND ANSWERS:

Who is exempted from submitting a Portuguese income tax return?

All those with earnings in 2013 are required to submit a tax declaration with the following exceptions:

a) those who only have earnings subject to final withholding tax (except dividends) and accept the tax paid as final.
b) those receiving only pensions falling below the annual pension allowance - National Minimum Wage - €6,790 per individual in 2013.

The only income that I received in 2013 was from bank interest, taxed at source (28%). Do I have to declare this income?

If the interest and respective withholding were in Portugal, no declaration is required. Nevertheless, if your tax rate falls below 28%, you may achieve a small savings in reporting and submitting a return. In other word, you may be entitled to a refund!

If the interest that you received came from outside of Portugal and you are resident for tax purposes, this income should be reported regardless of the withholding.

Beware: The EU Savings Directive has been in force since 2005 and has substantially changed reporting procedures. Make sure you declare correctly under these regulations!

My Old Age Pension falls below the Portuguese minimum wage. But I also had a small amount of income from investments abroad. Do I still have to submit a tax return?

Yes. The true purpose of this reporting waiver is to exempt the large number of small Portuguese pensioners who would only clog up the system without bringing in any appreciable income to the State’s coffers. All others must file. In addition to the standard Modelo 3, any investment income from abroad must be reported on Annex J (Income from Abroad).

Even though I’m resident here, my pension is paid into the bank back home. Do I still have to declare?

Yes. Where your income is paid is irrelevant: neither where you receive it, nor if you spend it, nor the currency in which it is paid. What matters is that it is available to you. That’s what makes it taxable.

My bank interest is paid in GB Sterling. How do I report income in another currency?

All income and expenses must be reported in Euros, regardless of the original currency.

As a non-resident, I receive rental income in Portugal. Do I declare here or in my home country?

Both. Your first obligation is to Portugal since the property, and therefore the activity, is located here. In accordance with the Double Taxation Treaty, you will subsequently receive at foreign tax credit at home before applying local rules.

Dennis Swing Greene is Chairman and International Fiscal Consultant for euroFINESCO s.a. Private consultations can be scheduled in Funchal (Sé) at 291221095, by e-mail at info@eurofinesco.com or on the internet at www.eurofinesco.com.
Are you banking on it?
2014-03-26 17:10:23
Over the last few years the last place to go for financial assistance would have been the bank, especially Portuguese banks! However the tide is turning, and things are getting easier.

For clients looking to purchase their home in the sun, cash has been king since the start of the recession in 2008 as banks were not in a position to lend to overseas clients and in part this contributed to the fall in prices. Clients looking to buy a villa for 800,000€ would look to put down around 40% and borrow the rest, with no financing available some of these buyers were still trying to buy an 800,000€ villa for nearer to 400,000€ and in some instances they were successful! Occasions like these then helped drive down the prices by nearly 30% over the last few years.

Thankfully, following this period of downturn, the market is now stabilising and prices have firmed up, although at considerably lower levels than pre-recession. Buyers are back buying and the banks at long last are starting to open their wallets.

In 2012 we did not sell one single property with a mortgage; everything was sold to cash buyers. However we are now seeing clients coming back to the market searching for finance.

To date I have found one bank that is really taking this aspect of the market seriously. BES bank and in particular the BES bank in Praia da Luz have been very proactive, helping a number of clients achieve their dreams in the last 6 months.

BES is offering clients mortgages with the following terms:

Up to 75% loan to value

Between 4.2% - 4.6% spread + Eurobor

Up to 30 year mortgages available

To apply for a mortgage you need the following information:
• Passport / ID Card
• Marriage Regime (declarative)
• Nº Contribuinte (Fiscal Nº) – (Issued in Portugal)
• Proof of address: Utility Bills (i.e. Water, Gas, Electricity) & Council Tax
• Bank Statements (last 3 months)
• Statement of Academic qualifications and School Area (Law, Engineering, Medicine, etc.)
• Statement of Profession/Business/Activity (showing Employer’s & Employee’s details with a valid date from the last 3 months)
• Credit Report = Experian, ICB (Irish Credit Bureau Limited), Schuffa, Betreibungsauszug.
• Copy of the Promissory Contract Detailing the conditions of Sale (“Contrato de Promessa de Compra e Venda”)

If employed:
• Pay slips (Last 3 months) - showing Employer’s & Employee’s details
• P60; Skatteverkett; Bescheid (last/current tax year);

If self-employed:
• Tax Calculation Self-Assessment (last/current year) or an official Letter from Inland Revenue stating proof of earnings
• The previous 3 years certified accounts
• Profession/Business/Activity License or the Registration Certificate from ‘Companies House’

This most certainly isn’t an advertisement for BES bank it is just that I have had the most professional and supportive help from this bank than any of the others. If you would like any other information on Financing please contact me for more information on david@bpaproperty.com
Transfer today!
2014-03-20 16:19:11
With the new online trading service from Premier FX, you can make international payments worldwide at your own convenience, 24 hours a day.

A feature of this service is that you can set up your own beneficiaries which are then stored for future use. You can make a transfer to any bank account worldwide in any major currency. Our clients are now using the service to pay bills to third parties, such as maintenance companies, lawyers, furniture stores and so on, as well as transferring money to relatives overseas or to their own foreign bank accounts.

You can make transfers from £100 to £30,000 via PFX Online, plus, of course you can still talk directly to one of our account managers at any time should you need advice or help.

Have a look online http://www.premfx.com/ for more information, or alternatively shoot us an email - info@premfx.com
A spring in the step….
2014-03-20 16:15:56
Well we are now approaching the end of the first quarter of the year and spring has finally begun. Following such a buoyant 2013 we were unsure of how 2014 would compare.

Well I have to say that the momentum has continued into the first quarter with sales exceeding 2013’s first quarter by almost double!

The French are still buying in a consistent way although not as many as in the last quarter of last year. The Scandinavians are back in force and buying. They are tough negotiators and expect a lot from the purchase, but they are buying so long may it last.

As for the Brits they are enjoying a good period for the Pound as exchange rates have been knocking around the 1.20€ to the pound mark all year. This has given additional confidence to buyers and fuelling sales across this market also.

So as we move in to quarter 2, which is usually the busier period of the first half of the year we are quite optimistic. We need to continue listing quality properties, as they are selling fast, and continue to market heavily in these markets.

We need to list high quality apartments with sea views, villas with sea and country views. If now is the time for you to sell, either email me or call into the office.

Let’s keep up the momentum and sell, sell, sell……
Is Long Let The Answer
2014-03-12 16:28:11
During the darker days of the recession, the UK estate agency market underwent a huge change. Long term let became the only way the agents could either stay in business or at least make some money.

The split in their businesses changed from around 95% property sales to 70% rentals and 30% sales over just a few months. This resulted in an explosion of rental agents all over the UK, whether you were in London or even some of the more provincial towns in the north.

So how is the long let market developing in the Algarve?

Remember the market here is very different than in the UK. For starters we have a summer period where property owners can earn the same rental money for one week as they could earn in a month on a long let. This also means that the owner can use the property themselves and also cover a large proportion of their running costs. The buy to let market has stalled due to poor lending rates, investors looking for more secure options and the price falls experienced over the last few years.

However, we are seeing the long let market grow month on month. OK, we do have a superb location on the main Avenida but we receive at least 10 enquiries per week from clients simply walking into the office as well as several enquiries per week from the internet. Our problem is not finding rental clients it is finding properties to rent long term.

So is long term letting of your property right for you? If your property is not selling and you cannot move on the price, it may be worth looking at either a long let of 1-2 years or a winter let where you can at least see some rewards from your investment. If you are not using the property as much as you used to, it may be worth renting it out until the market improves and you can then sell it on.

Long term lettings are now a fixture within our market place. More and more people want to try before they buy, clients who need to have a Portuguese address for tax reasons under the new NHR regime or people who simply cannot afford to buy here in the Algarve but still want to live here. In short there are plenty of rental clients and not a lot of properties.

If long term renting appeals to you please contact me on mail@bpaproperty.com to discuss how we can help you.
IRS 2013: Procedures nº 3 - Non-residents and filing procedures
2014-03-10 16:38:28
NON-RESIDENTS are taxable on income and gains within Portugal. When the paying entities are resident or assets located within or services performed in Portugal, then the following examples of income would need to be declared:

$ local rental income;
$ “local lodging” income (short term lets to holiday makers);
$ capital gains from property sales;
$ fees from scientific, artistic or specialized services performed in Portugal;
$ administrator / director’s fees from resident companies;
$ domestically-sourced pensions;
$ lottery winnings.

Employers should deduct tax at source on earnings. This withholding is final, unless governed by specific treatment under a Double Taxation Treaty. On all sources of income, proof of tax paid is required when transferring the proceeds outside of Portugal.

NON RESIDENTS AND FISCAL REPRESENTATION

Non-Residents sometimes wonder why they must have Fiscal Representation. First and foremost, it is a legal requirement. Any Non-Resident owning property or with income arising in Portugal must designate a resident entity to serve as Fiscal Representative to fulfill all compulsory tax obligations.

Recent changes in legislation have dramatically altered the responsibility and obligations of the Fiscal Representative. Along with new responsibilities and revised enforcement practices, this once benign position has turned into a potential nightmare for both the unwary service provider and the non-compliant property owner.

A Fiscal Representative is now required to fulfill all accessory fiscal obligations for the Non-Resident. Under the reformed version of the “General Law on Taxation”, a Fiscal Representative can even be held accountable, in certain instances, for paying any outstanding taxes owed by the Non-Resident.

REGIME FOR HABITUAL NON RESIDENTS

Foreigners and returning Portuguese emigrants who settle in Portugal after 1st January 2009 may be eligible for this new status. This classification has certain similarities to the non-domicile status under UK and Swiss tax laws and hopefully may increase tax revenues by reducing tax rates.

The “non-habitual tax resident” may be allotted a flat 20% tax rate on Portuguese and foreign source employment and self-employment income. To qualify, this income must arise from scientific, artistic or technical activity to be defined by the Finance Ministry.

The non-habitual resident may also be exempt from assessment on various forms of income originating outside Portugal if such income is subject to taxation at source under the terms of a double tax treaty and does not involve designated tax havens. However, exempt income must be declared for purpose of establishing the tax rate to apply to any income taxed at marginal rates.

Next: Exemptions from Filing

Dennis Swing Greene is Chairman and International Fiscal Consultant for euroFINESCO s.a. Private consultations can be scheduled in Funchal (Sé) at 291221095, by e-mail at info@eurofinesco.com or on the internet at www.eurofinesco.com.
Spring cleaning
2014-03-05 10:39:27
2014 is already well underway and, for those of you who are renting your properties out this year, now is the time for some spring cleaning and freshening up before the guests begin to arrive. A review of your current furniture is essential for ensuring that it is still comfortable, stylish and looks appealing in promotional photographs.

Mattresses will need checking and may need to be replaced – here at Abode we currently have the Classic Hotel mattress, with a bonel sprung system, from only €139. A new sofa or sofa bed can also completely transform a room and maximise rental opportunity. Abode has a wide range of sofas and sofa beds available including the Boss 2 seat sofa, currently on offer for €299.

As well as the larger items of furniture, we can also help you with the accessories which can make all of the difference; including bed linens, bath linens, lighting and rugs.

For more information you can contact one of our friendly and multilingual team at info@abode-group.com or call us on the following numbers UK: 0870 803 2970 or PT: +351 282 762 070
The Complete Package
2014-03-05 10:37:38
When purchasing a property abroad there are a number of factors you need to consider. In some ways the easy part is choosing the right property!

Once you have decided to buy your ideal property there are a number of other decisions to consider. At B&P we try to offer you a complete service and make this process as easy and as stress free as possible. To do this we work with a number of partners that all understand the B&P philosophy of keeping it straight and easy.

Lawyers – we work with a panel of lawyers who all speak perfect English – we don’t want anything getting lost in translation. We also work with French, German & Swedish speaking lawyers.

Property Management & Letting – part of our company operates as a management & letting company. Resort Rentals was set up to reflect the high standards set by some of the top resorts in the area but with a personal twist, meaning owners are in professional yet friendly hands.

Fiscal Representation – again we want our clients to be fully aware of any fiscal legislation that may affect them once they have purchased property, and so we work with one of the most well-known and professional companies offering a range of services from fiscal representation to the setting up of companies specially designed for holding Portuguese property.

Furniture – this is an area where the budget can easily be blown! We have therefore negotiated a series of complete furniture packs with a few local furniture companies where standards and quality drive their businesses.

Money Exchange – this area needs to be given high priority when purchasing a property. Transferring your money through your banks can be costly. We work with a major currency exchange company that always ensure you get the best deal available and work in a personal & friendly way.

However, this is all fine but there needs to be one underlying support factor holding all this together. This support is offered by the B&P team. Experienced professionals will help you move in whatever direction you need and ensure that the process goes smoothly. At B&P we don’t just sell you a house; we offer you a full professional service to make the experience a pleasurable one.

For more information on any of these services please contact mail@bpaproperty.com
The Price Is Right
2014-02-24 15:21:05
Properties definitely appear to be selling at the faster rate we have seen since before the crash in 2008, so does that mean the price of real estate in the Algarve will start to go up as well?

I'm afraid that I don’t think so, but what we have seen over the last few years is two things; firstly we saw prices drop from unrealistic levels to levels that are more achievable and sustainable. The second thing was a market that was littered with property owners feeling increasing pressure from banks and general running costs leading to them letting their properties go for below market value prices.

This has resulted in some great deals being had by many new buyers, but it has also left a scar on the market, where new buyers are still looking for these “wounded lambs” to take advantage of. I’m afraid that whilst there are a few of these deals still coming to market, in the main they have dried up. Property prices are at a more realistic and sensible level, I believe there will always be room for negotiation but the days of offering 30-40% below asking prices has thankfully gone and prices are now firming up.

Buyers constantly ask me whether the market prices will start to rise and I answer the same thing every time, I don’t believe we will see significant movement in prices for the next 3-5 years. The good news is that prices are stabilising with both buyers and sellers appearing to be happy with what they are getting. Even the banks are starting to lend, BES is offering 70% LTV at around 4% over Eurobor. Exchange Rates are also in our favour with the £ to € rate exceeding 1.22€ for much of the last few weeks. So the wind has definitely changed and property is once again selling. Be it the French & Scandinavians buying for tax reasons or the Brits trying to avoid the terrible weather, the market is starting to move again.

I was once told that if you look back over the last 100 years, property has increased on average 10% per year. Let’s hope the last few years were just another seasonal blip in the life of Real estate!
Scotland's Independence
2014-02-24 13:12:01
There has been much talk recently about Scotland’s referendum on independence later this year. In particular, the question of which currency a newly independent Scotland would adopt.

Westminster has bluntly rejected the idea of a unified currency under the Pound, while Alex Salmond has stated there is no intention of adopting the Euro, and the notion of Scotland remaining in the EU without the Euro has been firmly rebuked by Brussels.

So what other options will Scotland have? Unilaterally adopt the Pound without the associated monetary control? Or create a brand new currency to launch on the global market?

These decisions have enormous implications for Scotland, could it be that the whole debate for independence hinges on the colour of its money? Only time will tell, but it will be interesting to see the currency market’s reaction to the various proposals and eventual outcome.

Premier FX - www.premfx.com/pfx_online.php
Holiday Lettings
2014-02-17 10:52:30
Many people choose to rent out their holiday or investment home for holiday lettings, this could be for a variety of reasons such as wanting to cover the expense of the running costs or perhaps having bought the property as an investment they are now waiting for the market to improve and don’t want the extra costs while waiting for this to happen.

The money you can make from renting out a second home varies considerably depending on the time of the year. Here in the Algarve and Resort Rentals Algarve, you can generally find that low season is November through to March, mid-season being April, May and October, while the high season is June, the first half of July and September. This just leaves the peak season which is, of course, the second half of July and August when the English schools take their 6 week summer holiday break. High and peak season are the really busy periods where one can expect to make most of their money for the year.

A holiday lettings business is most definitely just that, a business. It’s not something that can be done at the end of a busy work day half-heartedly on top of other commitments. Therefore if you have decided to rent out your home for holiday lettings, a property management company is definitely something to consider.

A good property manager will market your home appropriately with the aim of getting plenty of bookings, then deal with the related administration work like deposits and booking forms. Reputable property management services should also manage arrivals and departures, greeting the guests at the property and then checking them out at the end of their stay whilst also ensuring your property is in a good state. Furthermore, they can be a great point of contact for any problems that could arise during guests´ stays and between bookings they can also organize cleaning and laundry.

In short, a reliable property management service should take care of pretty much everything, leaving you with complete peace of mind that your property is being well looked after while you are hundreds of miles away at home. Then, when you decide to take a couple of weeks break to enjoy the sunshine, you can simply relax in your holiday home without be forced to catch up on any extra administrative or maintenance work for the house.

If you are interested in renting out your holiday home and would like further information, please contact Victoria at Victoria@resortrentalsalgarve.com
Vive La France!
2014-02-17 10:46:42
Well, the French Revolution is still taking place here in the Algarve, since the start of the New Year over 70% of our clients have been French. But why have the French suddenly decided that the Algarve is such a great place to live? And why is it that Lagos specifically has such a wide appeal to the French?

In previous newsletters I have already written about the NHR scheme allowing French and Scandinavian nationals the opportunity to live here in Portugal and save huge amounts in tax. However, even though they have a such wide selection of places to live, ranging from the East of the Algarve in Tavira, to the central areas of Vale do Lobo or Quinta do Lago through to Vilamoura, Albufeira, Carvoeiro and finally the western Algarve from Alvor to Sagres, it would seem that Lagos and Luz are the areas which are the most appealing to the majority of our French clients.

They appear to love the vibrancy that Lagos offers all year round; January & February are not the easiest months of the year to sell property, however, the French are here and buying! The feedback from our French agents is that Lagos seems to fit well with the French lifestyle and the way they desire to live. The town is small enough to still be quaint whilst having enough local residents and businesses to still have a buzz even at this time of year.

There is plenty to be enjoyed from all the restaurants serving delicious fresh fish menus, to the vibrancy and charm of the fish market itself and of course the traditional Farmers market every Saturday morning. Add to all this, the gorgeous sweeping bay of Lagos and the surrounding scenery, it’s obvious Lagos has lots to offer even at this time of year.

It seems that Lagos is beating some of its rival touristic destinations hands down, and for those of us that have chosen to live in this fantastic city we all know why! So we should be welcoming the French in to our town, let them see how great Lagos is all year round. Even though the atmosphere may change with the seasons - the charm, quaintness and vibrancy are maintained all year round.

French clients can be quite demanding, they want it all, views, modern properties, good locations, close to amenities, rural settings, traditional villas, contemporary apartments ….. And they want to see absolutely everything before they commit. However, they are buying and so we need to be prepared to show more properties than normal before we get the sale. When they commit they do go through with the deal, so it’s worth the additional work and time. Once they commit we are signing promissory contracts within days rather than weeks which leads to happy vendors, clients as well B&P itself!

Vive la France!!
IRS 2013: Procedures - nº 2 - How, When And Where To File
2014-02-10 13:04:25
In the “good old days”, many were exempt from submitting IRS tax forms. However, the law changed some time ago and now the overwhelming majority of foreign residents must declare. In the 2013 tax year, everyone is required to submit a tax return with the exception of those earning only Social Security pensions falling below the minimum wage. No tax return can put you on the wrong side of the law and vulnerable to undesired queries. If you are from a non-EU country, you will not be able to renew your “Residência” without one. For EU citizens, it’s only a matter of time before presenting your “Modelo 3" is compulsory for renewals.

Important Dates
All tax returns must be submitted by the following deadlines to avoid penalties.
When filing using conventional paper forms:
March: if only salaried and/or pension income;
April: in all other cases.
When filing electronically via Internet:
April: if only salaried and/or pension income;
May: in all other cases.

Attention: In the past, late returns incurred only a token fine. However, the law has changed and the fines now start at €50 and can be as high as €5,000.

Also remember that the fiscal year in Portugal corresponds to the calendar year (1 Jan - 31 Dec). British nationals need to be especially careful since their April-to-April “P 60's” will not correspond to the Portuguese fiscal year.

Where to submit your return
Declarations may be submitted in person at the local tax office, by post or over the internet:

http://www.portaldasfinancas.gov.pt

The website and forms are only available in Portuguese. More and more services are becoming available on line, such as checking your newly updated “Valor Patrimonial” (rateable value) of your home. Some business related submissions can only be submitted over the internet.

Attention: Getting a password takes at least a week so this step should not be left to the last minute!

Tax forms keep changing and this year is no exception. Modelo 3 is now only an information cover sheet. Different categories of Portuguese sourced income are reported on the appropriate corresponding annexes. Foreign income is reported exclusively on Modelo J. All expenses have moved to Modelo H. Net taxable income is calculated by reducing taxable income by personal deductions and tax credits. Certain types of income benefit from specific tax incentives. Tax liability is computed according to tax rate tables, reduced by applicable tax credits.

If non-residents are subject to withholding tax, this payment-at-source represents a final payment and they are not required to file a tax return. However, any other income arising in Portugal, such as rent or capital gains on Portuguese real estate, must be reported. In fact, your first obligation is to report the income and pay the tax in the country where it arises (in this case, Portugal), then report again in your home jurisdiction to claim the international double taxation credit.

When to pay your Tax Bill
Based your submission, Finanças will calculate what you owe and send a demand later in the year. Income tax is due within 30 days of the issue of a demand by the Tax Authorities. Late payment will incur monthly interest charges and penalties.

Next: Non-Residents and Filing Requirements

Dennis Swing Greene is Chairman and International Fiscal Consultant for euroFINESCO s.a. Private consultations can be scheduled in Funchal (Sé) at 291221095, by e-mail at info@eurofinesco.com or on the internet at www.eurofinesco.com.
How does Facebook help sell your property?
2014-02-07 16:45:07
So how do Facebook and social media in general help sell your property? Well, in short it doesn’t directly help really. Although having said that, social media is becoming an integral part of our marketing and in fact supplements all of the media marketing we do.

We spend huge amounts of money trying to get your property in front of clients all over the world. We advertise on various portals from Zoopla to Rightmove, Place in the sun and the Move Channel all with varying success. However the biggest lead generator is by far our own website, website optimisation is key to the success of any business trying to sell their product to the mass market, and at B&P we treat this as our number one priority.

On buying B&P in 2011 we inherited a website that was totally underperforming. It had a Google ranking of 76, which basically meant that anyone looking for a property on the web would need to search through 8 search pages before they found us.

Following a full overhaul of our website as well as a new CRM system, we have managed to completely turn around our website’s presence online. B&P is now the highest Google ranked estate agent in the Western Algarve (source: Moonsy) and are beaten only by Rightmove in search terms. We now enjoy over 500,000 property viewings every year with clients spending over 75% longer on our site than they did in 2011.

So where does social media fit in to all of this? It’s quite simple; the more times websites are visited or searched for, the higher the ranking they achieve. This is why websites for Ryanair, BT, even Manchester United have huge followers and appear top on various searches. Therefore in order to increase business, our objective is to raise the awareness of our website and in turn the ranking at every opportunity.

Facebook will probably never actually sell your property but what it does do is raise awareness of our site and in turn, feed people through to the website and more importantly, your property. These incremental hits in turn improve our Google ranking and increase the possibility of your property being seen on the website by a prospective buyer. To keep it interesting the site gives regular updates on properties, property news issues as well as articles of interest in and around Lagos. By joining you could be helping to sell your property or be keeping a day to day feel for the market here in Portugal.

To help B&P continue to improve its rankings by increasing awareness, we have created a property forum on Facebook called “Inspired Property Investment Group” you can access this group by searching on Facebook or simply by clicking here>>.
How Do We Do It?
2014-02-03 12:30:53
Have you ever wondered how a specialist currency broker such as Premier FX can offer more competitive exchange rates than your bank, and with no commissions, fees or bank charges?

Well, this is due to a few factors; firstly, we only offer currency services and not the wide range of financial products your bank offers. Secondly, we do not have a network of retail outlets (branches) and the costs that such a large scale operation would dictate. As we are buying in the same wholesale currency market as the banks, it means that we don’t need to make the same margins as the banks and so this difference is passed back to the client in better exchange rates.

The savings that all these factors represent are typically between 2% and 6%, which can obviously make a big difference not only to large transfers, but also smaller ones over a period of time.

For more details, visit http://www.premfx.com/pfx_online.php
Energy Certificate Update – February 2014
2014-02-03 12:30:19
As you are probably aware, the government recently brought in new legislation requiring all properties that are for sale to have an energy certificate; this became effective on December 1st 2013. We were instructed that any properties that did not have the certificate should be removed from sale. There were huge fines if this new rule was not adhered to for both the agent and the vendor.

B&P took this new legislation very seriously and we have been working hard over the last 4 months to advise as many vendors as possible of the new rule. As December 1st approached the inevitable happened and the Portuguese Government Agency for Energy, ADENE, where the certificates were being processed, became so busy they had to shut down the portal in order to catch up. This resulted in many applications being held up.

This resulted in a back log of around 6 weeks’ worth of applications. We are still waiting for certificates from surveys carried out in the middle of December! The system is now back up and running and the agency are saying that they are turning surveys around in around 2 weeks, however it must be noted that that’s 2 weeks on top of the 6 weeks they were already behind.

To add to the confusion, ADENE has now said that they are giving an extra 6 month window for agents and vendors to get these certificates. To clarify we spoke to the equivalent of the National Association of Estate Agents here in Portugal, APEMIP, to get their advice and view.
APEMIP have advised that the government has indeed given a 6 month window but this really is for the agents that have made serious efforts to obtain these certificates on behalf of their vendors. They did not say that agents that had made no efforts would be treated differently but most certainly did infer that. My advice is to get the license as soon as possible.

B&P have made a series of changes to both the website as well as the window marketing, where all properties that have the certificate are highlighted in the property description or property characteristics.

One other area of confusion is certificates for rental properties. Again following more exploration work it appears that properties that rent for holiday lets and have the appropriate AL rental license DO NOT require the certificate! However, any property that is renting out under a long let agreement does in fact require the certificate, which will need to be attached to the rental agreement.

If you require any further advice or information either call in to the office, or email phoebe@resortrentalsalgarve.com .
IRS 2013: Procedures nº 1 - FISCAL RESIDENCY
2014-01-25 12:18:16
The vast majority of Foreign Residents share a common trait: most, if not all, of their livelihood comes from outside of Portugal. Great confusion and dis-information abound regarding such Income from Abroad. Before analysing the different requirements surrounding Individual Income Tax (“IRS”) in Portugal, it is useful to dispel some of the myths and establish a few of the basics regarding Portuguese taxation and the obligations of the Foreign Resident.

So the first question to consider is: Who is required to make an income tax declaration in Portugal?

QUESTIONS & ANSWERS:

When is a foreigner considered resident for tax purposes?

It is important to distinguish between a Residency Permit (“Residência”) and being resident for tax purposes. The former is a civil status and had new legislation in 2006. The latter is Fiscal in nature and is circumstantial in nature. Individuals are deemed to be resident for tax purposes when they meet any of the following criteria:

An individual is deemed to be tax resident if he is 1) physically present in Portugal for more than 183 days in a calendar year; or 2) physically in Portugal for less than 183 days but has established a permanent place of residence at the year end. If one owns a dwelling in Portugal that the tax authorities might reasonably assume to be his or her usual residence, one can be considered resident for that tax year. If the head of a family is resident in Portugal for tax purposes, other family members are also considered to be resident there, even if actually living abroad.

However, if the foreign country has a tax treaty with Portugal, the treaty contains rules to decide in which of the two countries an individual is resident. Needless to say, if you do have a “Residência”, you are deemed to be resident whether physically present or not in Portugal. In fact, the Estrangeiros office now insists that non-EU residents present IRS tax declarations for Residência renewals.

Are non-residents required to declare income arising in Portugal such as rental income?

Your first obligation is to settle up with the tax authority in the country where the income is generated. As such, non-residents are taxable on income arising in Portugal, usually at the flat rate of 25%. However, rental income benefits from a special reduced rate of 15%. Once declared and paid in Portugal, this tax should be eligible for a tax credit in your home jurisdiction, thus eliminating double taxation.

What happens if I don’t file a tax return and get caught?

While the tax authorities used to turn a blind eye to foreign residents, the pendulum is now moving in the other direction. Rather than being invisible, expats have become prime targets. Legally tax resident in Portugal, many have never submitted a return, thus likely to be eligible to pay tax owed, back interest as well as hefty penalties. If you come forth voluntarily, you are dealt with accordingly. However, once on the “Black List” of tax-cheaters, it is difficult to shake that status. Look on the bright side: by being compliant, you can take an important step towards peace of mind.

But I already pay tax in my home jurisdiction...

Unfortunately, you don’t get to choose where you pay your taxes. The Law determines the choice for you. Just because you may pay (incorrectly) back home doesn’t mean that you will win any favour with Finanças. Double Taxation Treaties clearly define taxpayer obligations. And Portugal now has over 40 tax treaties with all of the EU countries and many others around the world. Many others are in different stages of the process. In other words, Portugal is rapidly internationalizing its fiscal perspective.

Will I pay more in tax in Portugal?

It may come as a surprise that filing a correct tax return in Portugal can actually save you money. Submitting a tax declaration is not synonymous with paying tax. The Portuguese tax code has generous allowances and unexpected exclusions on certain forms of income, broad deductions for numerous types of expenses and liberal tax credits for many common expenditures. Many people find their tax burden in Portugal to be significantly lower than in their country of origin.

We will try to show you how in the coming months.

Next: Submitting your IRS tax declaration

Dennis Swing Greene is Chairman and International Fiscal Consultant for euroFINESCO s.a. Private consultations can be scheduled in Funchal (Sé) at 291221095, by e-mail at info@eurofinesco.com or on the internet at www.eurofinesco.com.
And here we go again….
2014-01-25 12:09:04
Well here we go again! Happy New year to all our clients and let’s hope it is a healthy and prosperous year for us all.

As I have detailed in previous newsletters, 2013 was a great year in terms of sales, revenue sales and rentals were the best for many years.

2014 has started pretty much where we left off with a deluge of French clients as well as the established markets of UK, Ireland, Germany and Holland also starting well. We have just launched our portfolio in China and Hong Kong and should be seeing some results from this marketing campaign following the Chinese New Year on 31st January.

We are still in need of new properties following the very busy last quarter and would like to see more sea view villas, sea view apartments and town centre properties on our books.

Prices have started to stabilise but don’t be thinking you can increase your prices just yet! Properties are selling at around 10% below asking prices so vendors still need a little flexibility.

Resort Rentals has enjoyed its best year since we opened the doors in 2008 and now has over 100 properties on our managed books. We intend to continue to grow this area this year and would welcome new properties for both Management & Rental. Resort Rentals offer a high level of professional service to both our owners and the rental clients for their properties. Victoria and her team offer efficient and detailed support ensuring your property is not only well looked after but you are kept fully aware on a weekly basis of any changes to the property or the rental of your property. The on-line visibility ensures you know exactly what is happening financially at any time day or night.

So that’s it for this week. Take a look at the new listings as well as the recent price reductions in order to keep abreast of the current market conditions.
Fixing exchange rates
2013-12-11 11:53:30
If you are planning a reasonably large transfer sometime in the future, perhaps for a property, a boat, building work or so on, and are concerned about the exchange rate moving against you, did you know that you can fix exchange rates for up to 2 years? This is a widely used tool, especially in a volatile market where budget certainty is needed. And to secure these rates, known as Forward Contracts, only requires a small deposit initially. In fact, Premier FX can fix rates for smaller amounts and regular transfers as well, taking the uncertainty of moving rates away for you. Contact us for more information on +351 912 611 446.
Happy Christmas to all our clients
2013-12-11 11:52:22
And so to the writing of the last newsletter this year. And what a year it has been.

To say we have been busy is an understatement.

We have seen the highest level of sales since 2005 in both number of sales and sales value. Taking our Google ranking to its highest level ever and also increased our visibility on Rightmove to its highest ever position. Enquiries also reached an all-time high.

The rentals team have also had their busiest year to date and we have grown the numbers of our managed properties to over 100 for the first time ever. The summer saw the best numbers in terms of rentals and revenue for our clients since we launched Resort Rentals in 2008. And finally the long let side of our business continues to grow and is the fastest growth sector of our business.

So that was 2013.

Let’s hope that 2014 delivers in the same way. What most certainly will not be changing is the attitude and commitment that B&P offer and deliver throughout the year to all our customers.

We now break from the 21st December until 2nd January when it all starts again. This will be the last update until the end of January 2014.

I would like to thank all our clients, old & new, as well as our partners for making 2013 such a great year and helping us to continue the growth of the company.

I hope you all have a lovely Christmas and we all enjoy a prosperous and healthy 2014.

Happy Christmas & Happy New Year from all the team at B&P Real Estate Agents, Resort Resales Algarve & Resort Rentals Algarve!
The Linear Range
2013-12-03 17:35:43
Are you thinking of updating your holiday home furniture, or want to achieve higher rental rates with some high quality furnishings?

Look no further than our new furniture package, Linear, competitively priced but not compromising on quality.

This modular concept with clean lines and chrome feet will lend a modern bold look to your home. A beautiful contemporary range which offers versatility with many styles and sizes as well as a wide array of swatches and finishing’s to choose from in our Lagos showroom.

Don’t forget you can buy as little or as much as you need at Abode Furniture, contact us for more information on +351 282762070

Or email: info@abode-group.com

www.furnishyourabode.com
So what happens once you have bought your dream home….
2013-12-03 17:31:56
You have decided to buy your dream home, you've handed over the cheque and your lawyer gives you the keys…. But what happens next?

Well, there is still quite a lot to do. Whether you have bought a lock and leave apartment or a villa complete with gardens and a pool, there are a few basics that need to be sorted.

Your lawyer will generally arrange for all the utility connections to be changed from the previous owners name in to yours. This is a fairly painless experience and really just entails the lawyer writing to the various companies, informing of the changeover date and gives the meter readings. From this date all the costs become yours. Any lag over from the previous owner will normally be sorted between the lawyers.

Any condominium fees will also be calculated like this, with all outstanding debt being paid prior to the signing of the deed. The lawyer must sort this prior to going to the notary, so you have no worries on that score either. Finally you have your on-going costs and contracts with the various companies who will maintain your property.
In terms of apartments the previous owners may have had a management company that looked after the property or maybe just a cleaner. This is a decision you need to make as to whether you keep the same arrangements or choose to do something different.

As for villa owners there are a number of tasks that need to be undertaken weekly, monthly or annually in order to maintain your property. In the long run, by taking the relevant precautions now it will in fact save you money in the future.
The pool needs cleaning; this sounds a basic task and in many ways it is! However, the pool man also cleans out the pumps and maintains the pool to stop any major problems from arising. The garden will definitely need keeping on top of, one of the first things I noticed when I moved here is that plants don’t seem to stop growing like they did back home, instead they just grow & grow! So this needs to be maintained on a weekly basis.

Then there is the general maintenance and checking of the property. Many villas are used for holidays and some villas are rented but usually a property can be empty for long periods of time, especially in the autumn and spring periods. And finally there are the payments to be made to all the tradesmen and companies that undertake the day to day maintenance of your property.

All these arrangements can be made and paid for over here, it could be done on a direct debit basis or you can use one of the many management companies to oversee this task for you.

My advice is to use a management company for this as by using a reputable management company you could save money in the long run. The property will be watched and checked on a weekly basis, all the utility bills checked against the meter readings to ensure the bills are correct. The tradesmen’s work will be checked every week, as well as ensuring that they are turning up when they should and doing the task they are paid to do. The management company will be able to negotiate better rates and they should only employ reputable companies or individuals. Of course there is a charge for this service, but it isn’t as much as you would imagine and to have the peace of mind that your property, over 2000 kms away, is being managed and monitored, is worth the cost.

Resort rentals Algarve is the rental and management arm of B&P Real Estate Agents and undertakes the management of around 100 properties within the Lagos to Salema area. As well as managing the properties, they also offer services to accommodate clients who choose to rent out their property. For instance, cleaning and laundry services for you or your client’s visits. If this could be of interest to you please email me on the usual email and I will send over a quotation for these services.

david@bpaproperty.com
Online Transfers
2013-11-26 12:22:28
Premier FX, the Algarve’s leading currency exchange provider, has been proud of the high level of personal client service we offer, where each client has a dedicated currency broker available at any time to give advice, quote exchange rates and to initiate transfer instructions. In addition, our account managers can proactively work for clients to secure the best rates and minimize the risk of adverse currency movements. However, we recognise that there are times when clients just wish to make a quick transfer perhaps late in the evening or over weekends and holidays without needing to talk to their account manager. Welcome to PFX Online, a fully automated exchange service available 24 hours, where clients can set up payments to any bank account worldwide at their own convenience. A perfect addition to our client service offering!

For more details, visit http://www.premfx.com/pfx_online.php .
Replenish the stock…
2013-11-26 12:19:35
Following one of the best summer and autumn sales periods since the recession started in 2008 we have now made a serious dent in the amount of properties we have for sale. Properties which have sold range from exclusive villas in the prestigious areas of Caliças and Funchal Ridge right through to residential apartments close to the town centre.

The appetite for buying property has certainly returned, and as previously mentioned, this is being bolstered by new markets being driven by new legislation, both European and non-Europeans are being incentivised to reside in Portugal. Therefore new markets of Scandinavians, French, Chinese, Russian and even Middle East buyers are coming to Portugal in good numbers.

In terms of sales values, I believe these will be constant for at least 3-5 years. I do not see much, if any, capital growth during this period. However, what we are seeing is the stabilising of the market pricing and a strengthening of the mood of sellers and buyers. Therefore if you are waiting for the good old days of pre-recession prices to return I think you will have a long wait. I am sure we have hit the bottom and as just mentioned we are seeing a firming up of the floor prices, but growth is not on the cards just now.

So if you have been waiting, I suggest that now is the time to sell. B&P will offer you a free valuation on your property to give you an idea of the price to expect. We need all types of properties from apartments or houses on Meia Praia, villas in Porto de Mos, villas in Luz Parque to apartments in Luz. All properties are required in all areas!

So why sell with B&P?

Well the answer is easy, we work harder for you! B&P now boasts the highest Google ranking of all Western Algarve estate agents (source: Moonsy.com) as well as unprecedented growth of Rightmove hits and Click Through Rate(the gauge used to assess Rightmove productivity). We also have increased hits via the new newsletter, hits increased by over 35% versus the old style newsletter. This means we are attracting regular readers and therefore more viewings of our website than ever before. In the last 12 months over 80,000 people have logged in to our site with approx. 45% of those being new clients. We also have the lowest bounce rate ever at 24%, visitors are spending longer on the site and viewing more pages than ever before. The 3 click policy of the website makes it easy for clients to view what they want to view without having to trawl through page after page. You can get to whatever page you want within 3 clicks of your mouse! And last but not least we have the best position in Lagos on the main Avenida.

So to conclude, if you are considering selling then now is the time to sell, no use waiting for the heady days as you will be in for a long wait!

Email me direct for your free valuation - david@bpaproperty.com
It's Still All About The Price
2013-11-19 12:06:59
In previous newsletters I’ve talked about how to sell your property; dress it appropriately, always make it tidy, give a welcoming feel to the property and make sure the agent takes great photos that reflect the property at its best and tries to describe the property in a positive way. All these pointers are important, yet it is still the price that seems to be grabbing the glory.

To give you an example of this we have recently sold a lovely sea view villa in Praia da Luz. The villa had been on our books for around 9 months and had received a few enquiries but no viewings. There was nothing wrong with the property; the photos showed it well, the vendors had presented it well on the day and the write up described it accurately yet positively. The hits on the website were concerning as we were getting some of the lowest hits on Rightmove as well as on the B&P website. It just didn’t make sense, a perfectly attractive property priced at our valuation but not going anywhere.

So, following a consultation with the vendor we decided to advertise at the lowest price the vendor would accept. This meant almost a 50k drop in price off the original valuation. Suddenly the property took off. We increased hits on the portals by at least 300%, we got around 15 enquiries within the first 2 weeks and within 4 weeks we had an offer refused and then 1 accepted and 2 other potentials waiting in the wings.

It goes to show that everything has its price.

We have also seen this on a handful of other occasions where properties appear to be sticking but when the price is adjusted to the correct level they get the interest and then hopefully sell.

If you are concerned about the price level of your property or are prepared to be aggressive on your pricing, email me on david@bpaproperty.com and I will arrange for a current valuation.

Remember prices have tumbled around 30% in the last 5 years. As hard as it sounds you need to price your property in line with current pricing. As previously mentioned 73% of our sales this year have come from properties on the market for less than 6 months. Surely part of the reason for this is that the newly listed properties are being valued at today’s prices instead of trying to sell at 2007 prices or even more! Either call in to the office or send me an email for more information.
And the summer rolls on……
2013-11-13 13:00:10
Well the weather is still warm and sunny here in the Algarve. Temperatures have been averaging over 22ºC and the sky is blue and on top of the weather, sales and enquiries are holding up the same.

The French are still coming in their droves as are the Scandinavians. As mentioned last week, the NHR scheme is attracting buyers from these locations as they try to avoid Rich taxes introduced in France and high taxes in Scandinavia. Couple this with attractive prices and there is the reason for this buoyancy.

Prices have certainly stabilised and you can now buy an apartment or even a villa cheaper than you could build one! Some of the larger developers are still offering great prices on new builds, especially at Santo Amaro development in Lagos where you can buy a 2 bed super modern apartment for as little at 170,000€ including all the appliances, solar panels, air conditioning & central vacuum systems. These apartments were once selling at around 275,000€, so a great discount for probably the best quality apartments in Lagos at the moment. You can find these apartments on our website searching with the reference: bpa2222-t2.

The banks are starting to get a little better regarding repossession sales. Santander has reduced the price of a 3 bed villa with pool at Alma Verde development to as little as 300,000€, again you can find this property on our website with the reference: AV-L138.

We are needing properties in the locations of Porto de Mos, Luz Parque and Torraltinha in Lagos as we have clients waiting for new listings in these areas. If you have a property to sell in any of these locations contact me as soon as possible.

Finally, the deal of the week would have to be this 2 bedroom cottage in central Lagos. On for only 89,500€ this has to sell fast. It has both charm and is in a great location just a few minutes’ walk form the town centre. The search reference for this property is bpa1596

Any interest in any of these properties please don't hesitate to contact me on david@bpaproperty.com
Non-Habitual Residents: Portuguese special tax regime for individuals
2013-11-06 13:22:33
Portugal has a special tax regime for new residents, which is also applicable to Portuguese nationals returning to their home country after an extended period of living abroad.

This regime is a key factor to be considered when deciding on the country to set residency as it applies for a ten year period. It was designed to promote the transfer of residence to Portugal of entrepreneurs, investors and specialized professionals and also to those people who are considering retiring abroad. Under the Non-Habitual Residents (“NHR”) regime, these can take place in sunny surroundings whilst benefiting from an attractive tax regime.

Overview of the regime

Individuals qualifying as NHR are eligible for special income tax rates applicable to Portuguese source income (i.e., 20% for Portuguese source employment and self-employment income derived from high value added activities) and may benefit from potential tax exemptions on foreign source income.

Employment income received abroad can be exempt if liable to income tax in the country of source. Foreign source dividends, interest, capital gains and rental income, together with self-employment and professional income (derived from high value added activities), can be exempt from personal income tax if:

• the income can be liable to tax in the country of source, according to the provisions of the applicable Tax Treaty or of the OECD Model Tax Convention (it does not require effective taxation); and
• it is not deemed derived in Portugal (e.g. paid or borne by Portuguese entities); and
• it is not deemed obtained in a tax haven.

Foreign source occupational pensions may benefit from a personal income tax exemption if the pensioners are subject to tax in the source country (in accordance with the applicable Tax Treaty) or, even if the pensions are not taxed at source, if the pension is not paid by a Portuguese tax resident entity nor related to years of work in Portugal.

These pensions may also benefit from a potential double non taxation should the applicable Tax Treaty preclude the source country from taxing the pension (most tax treaties signed by Portugal do, including, for example, the ones signed with the UK, Ireland, France, Germany, Sweden and Norway).

Qualifying for the NHR status

The regime can be granted to individuals that qualify as Portuguese tax residents in the year of relocation, in accordance with Portuguese domestic rules. For that purpose, individuals must:

• spend more than 183 days (or partial days) in Portuguese territory;
or
• set their permanent residence in Portugal by buying or renting a property in Portugal which can be deemed their permanent abode on December 31 of each year.

Eligibility for the NHR status also requires that individuals cannot have been Portuguese residents nor taxed as Portuguese residents in the five years preceding the year of relocation to Portugal.

All summed up, Portugal has one of the best tax regimes in Europe for new residents. This factor combined with the Portuguese beautiful landscapes, good weather, hospitality, food and culture definitely places Portugal on the shortlist of great countries to live in.


Aline Almeida - marialmeida@deloitte.pt
How Lagos has changed….
2013-11-06 13:20:40
It’s almost 12 years since I moved to Lagos and it´s changed a lot over those years, it is almost unrecognisable. Not only in the aesthetic look of the city with many new buildings and urbanisations but also how cosmopolitan it has become.

12 years ago areas such as Cerro das Mos, Porto de Mos and even large areas of Meia Praia including developments such as Marina Park & Condominium do Mar were not even in the planning stages!

But it has to be said, the development of Lagos has been undertaken with a sympathetic approach, by keeping apartment blocks to low rise (fewer than 3 floors) and not spreading too far out of town. I remember a statement from the Camara many years ago where they said there was enough plots to build on within the existing boundaries of the city and in fairness they have achieved this.

There have been some blips along the way, with some not so tasteful designs being passed, but in the main Lagos is still looking like a traditional Portuguese town and we still see the white washed walls and terracotta roof tiles all over town. The cobbled streets in the centre have been maintained and we have seen some fantastic restaurants crop up all over the town. You can now eat almost every nationality of food from Thai to Japanese and from American diners to the traditional Portuguese fish restaurants. You can also have and pre or post dinner drink in one of a handful of smart wine bars or cocktail bars, all adding to an existing range of superb eateries.

The changes mentioned appear to be attracting a more discerning type of client to Lagos. This new breed of client is well-travelled and used to seeing all sorts of cultural differences along with higher expectations than that in previous year. Thankfully the restaurants and support services are definitely raising their game to cope with this more demanding client. Visitors from the old favourites of the UK, Ireland, Germany, Holland and Spain are now being joined by a flood of French, Polish, Chinese, Canadian and even Russian holiday makers and second home purchasers.

This is a phenomenon we need to embrace and we as estate agents need to adapt our business practices to cope with the changing requirements.

Finally there have been a number of tax changes to entice property buyers from all over the world. You will see in the article from Deloitte news on the NHR and we also have the Golden Residency Visa that is also attracting new customers.

So we have seen lots of change but as ever change is constant and we need to prepare for the next wave of social & aesthetic changes Lagos has to offer.
Is my will still valid or do I need to change it?
2013-11-06 11:34:12
If you have already done a will, that is excellent news, but as life has many “curve balls” and is always changing there might be the need to change the will accordingly, to correct it according to the changes in your life.

You should always change your will if you get married, have children, get divorced or if any other big circumstance changes in your life.

If you are a British citizen, a marriage will invalidate your will completely as if a new will is not done, you will be considered as having died intestate (i.e. without a will) and the rules of intestate succession will apply to your succession. If you marry after granting a will, it is crucial that you draft a new will and revoke the previous one.

In relation to having children, this does not automatically affect the validity of your existing will, but it is important to review your will if you wish to provide for your children and this was not foreseen in the previous will that was granted.

If a divorce is granted after the will was drafted, the divorce has the effect of invalidating any disposition you have made in favor of your former spouse. If you have appointed your former spouse as an executor, this appointment will fail. If you have made any gifts to your former spouse by will, these gifts will fail and you may fall into a situation of intestacy. You should therefore review your will to ensure that no intestacy will arise.

Your will should therefore always accompany the changes that happen in your life and this can be conferred with your lawyer/solicitor.
For more details, please contact us at 0351 282 799 393 or info@juanitarodrigues.com.
Getting it right in bed...
2013-11-06 11:29:33
A brief guide to buying the right linen & towels for your property in Portugal.

What quality bedding should you buy? Should it be Poly cotton or cotton?

The answer is either, it’s a personal choice, the benefits of Poly cotton as a rule, it's easier to launder and maintains its whiteness, cotton though is a natural product therefore it is cooler and generally softer.
What is important when buying sheets (particularly if your property is going to have lots of visitors) is making sure to choose sheets that will not bobble after a few washes. Oh yes and getting the right size of course! Sizes of beds vary; here in Portugal we have UK and European sized beds. There is a guide to bed sizes at the end of this article which should be useful as even flat sheets in the UK are shorter.

What quality bedding should you buy?

Poly Cotton Percale is a 50/50 blend and is a product that has 180–200 threads per square inch is durable and withstands a higher temperature wash; it’s a great product for rental properties. Cotton should be either a good thread count and/or a good weight. We recommend 200 thread count for cotton as it is soft, durable and a good price. Don’t panic about making the right choice, as these details are always on the packaging, and in the rare case if they are not a good supplier should provide you with this information

Coloured or white bedding?

The answer is simple. White. It is the best colour for sheets & towels as the laundries in Portugal tend to use products like bleach or other chemicals in their washes. So if you choose ivory it will be white soon, or if you choose colour it is likely to fade. If you want to add colour to your rooms for those important promotional pictures and budget is important, a cushion or runner for about €15.00 is an option.

Towels?

A towel that will stay soft and is durable should be between 500 & 600 grams, choose a simple header on the towel so it will maintain its shape. Keeping it to 500 grams will reduce the cost of your laundry bills while choosing 600 gram adds that luxury touch.

General product check list:
Pillow cases, fitted sheets, flat sheets, duvet covers, towels and bath mats, duvets & pillows (anti-allergy if renting) or washable blankets/bed spreads. If renting out in the busy season - Linen x 3 is the rule.

Here at Linen etc. we can advise you on how to keep your buying requirements to a minimum for storage and or cost purposes.

Getting the measure of your bed…
Single mattress sizes: (UK) 90 x 190 (EU) 90 x 200 – 100 x 200
Double (UK) 135 – 190, (EU)140 x 200.
King (UK) 150 x 200 (EU) 160 x 200
Super King 180 x 200. Emperor 200 x 200, 220 x 220

Linen etc guarantee the quality of their products and stock all the above sized sheets.

Buy in store or online www.linen-etc.com, by email info@linen-etc.com or phone 282 697 791.
Open Monday to Friday 10am – 5pm
Apartments for sale…
2013-10-28 12:55:46
Apartment sales represent approximately over 50% of the total sales we have made this year. So, what types of apartments are selling? And who is buying?

Well, in short, the answer is extremely varied! Clients are more international than ever before. The UK and Irish market is getting stronger, the German & Dutch market is steady, but the real growth is being seen in the French & Swedish markets. This is being fuelled by changes in the tax law under NHR (Non Habitual Residency) where clients from certain countries can purchase property in Portugal and reduce their tax liabilities. In the next couple of weeks I will share more information on this subject with an article from Delloite in Lisbon sharing their thoughts with us.

In 2013, B&P has sold to over 10 different nationalities alone. Lagos and the Western Algarve is certainly becoming more and more cosmopolitan every year. Looking at one of the most aggressively growing markets in isolation, the French market has exploded over the last few months. Over 1 in 4 clients coming in to the office at present are French, and over 75% of enquiries are coming from French clients. Their budgets vary and so do their tastes, but there are some consistencies; they prefer sea view, generally more contemporary, not too big and close to the centre. Values are varying from 140,000€ to 250,000€. So clearly that will be our listing focus during the November/December periods. The clients plan to use their property across all of the year, holidaying here in the summer and spending long periods here as well in the winter.

Looking at the Swedish clients, their choices vary but tend to be looking at properties very close to the centre of Lagos. Again the NHR scheme is of great interest and boosting enquiries. They look for more contemporary properties as well as properties close to all amenities.

So once again the market is evolving. New markets with differing tastes and preferences coupled to the more traditional markets

It is definitely an exciting time in Lagos real estate. We are now looking for new listings in all key areas!
DELAWARE LIMITED LIABILITY COMPANIES - Pros & Cons
2013-10-28 12:51:14
Part nº3: Capital Gains Treatment

The widespread use of Delaware LLCs in Portugal came as a direct replacement of so-called “Black-listed” Offshore Companies that were driven away by punitive measures in fiscal legislation. A decade ago, it became a common response to “redomicile” a Gibraltar or similar company to Delaware, avoiding severe tax penalties inflicted on “Offshore” structures. In the years since, the practice has continued, often with little concern about eventual consequences.

One such outcome has crystallised in potential buyers’ current hesitance to accept the fragile points common to many Delaware LLCs, such as underlying Capital Gains Tax liabilities. Let us examine the facts associated with Capital Gains assessment of a Delaware LLC.

1) If a Delaware LLC sells a Portuguese property, how is Capital Gains Tax calculated?

As a flow-through company, tax is assessed directly to the Owners, not to the Company. Since the sale of a Portuguese property is a chargeable event under Portuguese fiscal law, the profit should first be declared in Portugal. The taxable gain is calculated under “IRC” rules and subsequently reported on the appropriate “IRS” form. These rules permit adjustment for inflation as well as deduction of necessary expenses.

If the Company re-invests the proceeds of the sale into another property, there is a 50% exclusion on the taxable gain assessed to the shareholders.

If the Owners are not tax residents in Portugal, the “IRS” tax rate will be 25%. If resident, the gain is added to other sources of income and final tax calculated at marginal rates (14.5% - 48%). For non-residents, if a tax treaty is in place between Portugal and country of the Owners’ tax residence, double taxation is normally eliminated by the country of residence by means of international tax credits.

2) If the shares of a Delaware LLC are sold, how is Capital Gains Tax calculated?

CGT should be due in jurisdiction of tax residence of the Sellers or “members” of the Company. Normally, the gain will be determined by the net difference between purchase and selling prices with no adjustment for inflation.

Keep in mind several potential pitfalls:
a) Original share values were often kept artificially low to limit liability. There could be a “boomerang effect” that could exaggerate the assessable Capital Gain.

b) Conversely, original share values may not reflect building costs or capital improvements made to the property over time. If proper procedures in record keeping or basic management practices were lax or absent altogether over the years, gaps in the record could potentially open the door to overstatement of long-term tax liabilities.

CONCLUSION
We all realise that there is neither an ideal nor a universal solution to any situation. This is why it is essential that you study the pros and cons of each position to understand which factors may or may not be relevant to your individual circumstances. For some, the flexibility and liability protection may attract some owners to a LLC. On the other hand, potentially burdensome tax obligations, far-reaching international repercussions and perplexing ambiguity may tip the scales negatively for others. It is for each buyer to choose and make an informed decision.

Dennis Swing Greene is Chairman of the Board and International Fiscal Consultant for euroFINESCO s.a. Private consultations can be scheduled at in Guia (Albufeira) 89561333, Lisbon (Chiado) 213424210 and in Funchal (Sé), Madeira 291221095, by e-mail at info@eurofinesco.com or on the internet at www.eurofinesco.com.
DELAWARE LIMITED LIABILITY COMPANIES - Pros & Cons
2013-10-21 14:22:32
Part nº2: Shortcomings of a Delaware LLC

(This is the second of a 3-part series, providing an in-depth analysis of Delaware LLCs)

A Limited Liability Company: Disadvantages
Choosing to use a Delaware Limited Liability Company can have long-reaching repercussions: taxes due, personal liability as well as applicable rules and regulations in the US and elsewhere.

- “Boomerang Effect” on Capital Gains Tax: Limiting liability can work in two directions. While an individual's financial liability can be curbed by low share value, the same bargain basis will also exaggerate eventual Capital Gains when shares are ultimately sold at a price reflecting the actual market value of the Company’s property.

- Individual analysis: To the degree possible, it is also important to evaluate the individual’s true liability potential. For a possible “deep-pocket”, protecting against financial liability can be a major factor. For others, personal responsibility questions may constitute only an incidental risk.

- Tax flexibility can backfire: Unless owners choose to be taxed as a corporation (referred to in the US as “check-the-box” with corporate tax fixed at 40%), income from an LLC is subject to self-employment taxes in the jurisdiction where the shareholders are resident for tax purposes.
For example, if you have Local Lodging income from tourist lets in Portugal, you will not be eligible to be assessed according to the rules of the Simplified Regime. This means that you will pay at marginal rates, which can go as high as 48%, rather than just 5% as an individual.

- No “IRS” tax credits or deductions: In addition, this form of income is not eligible for individual tax credits or deductions on earned income. While taxed individually, calculations are based on corporate rules that may not be relevant to your situation.

- Steep mark-ups: Because of the relatively simple structure of a Delaware LLC, set-up charges can run as little as US$300 (€235). While this basic low cost should work to the Owners’ advantage, it often backfires, leading to successive intermediary mark-ups that can inflate charges by as much as ten-fold or more.

- Confusion about Roles: Whereas corporations normally have specifically defined roles (like directors, managers, and employees), LLCs generally do not. It can be difficult for the company and especially investors to know who is in charge, who can sign certain contracts, etc. This confusion can be avoided by creating a personalised LLC Operating Agreement.

- “FBAR” compliance: If a Delaware Company has a financial interest in or signature authority over a foreign financial account, the US requires annual reporting to the Internal Revenue Service (“FBAR”). This requirement can undermine any element of confidentiality in addition to adding another on-going compliance commitment and cost.

- “Controlled Foreign Company” scrutiny: A Delaware LLC is normally considered to be a Controlled Foreign Corporation. (A CFC is a corporate entity that is registered and conducts business in a different jurisdiction or country than the residency of the controlling owners.) When no normal commercial business activity is in place, these entities are likely candidates to increased suspicion, scrutiny and information sharing by Tax Authorities throughout the European Union and beyond.

Next: Capital Gains Tax Treatment of a LLC

Dennis Swing Greene is Chairman of the Board and International Fiscal Consultant for euroFINESCO s.a. Private consultations can be scheduled at in Guia (Albufeira) 289561333, Lisbon (Chiado) 213424210 and in Funchal (Sé), Madeira 291221095,
by e-mail at info@eurofinesco.com or on the internet at www.eurofinesco.com.
Is it that time of year again?
2013-10-21 12:33:38
Well the past 12 months have flown. It doesn’t seem 2 minutes since I sat down and started to do my budget and marketing plans for 2013 yet here we are again!

And how the market has changed; in the last 12 months we have seen some significant changes. Some of the banks have started to lend again, new markets are emerging including the continuing growth of the Scandinavian market, the French market has suddenly exploded and the Brits are buying again. On top of this, changes to the tax law for residents means the Germans can now join the Scandinavians and get tax breaks on their pensions here in Portugal. People from outside the EU can gain 5 year rolling residency from the Golden Residency Visa programme and even the Irish are seeing a glimmer of light at the end of the tunnel.

I am not saying we are out of the woods yet, but we are definitely on the right path.

Like for like sales are up almost 50% vs 2012 and holiday bookings are up over 20% on 2012, furthermore, enquiries and viewing are up by similar numbers.

The long term let side of the market is also in real growth and I think that is set to grow double digit again in 2014.

So things are getting better. An interesting figure is the percentage of sales from new listings. 73% of our sales are for properties that have been on the market less than 6 months, and 54% for properties that have been on the market less than 3 months. I believe that this is mainly due to the fact that buyers have been watching the market for the last 5 years, waiting for the right time to buy. They have seen some of the older listings sitting there for years and when a new property comes on line we get an immediate rush of enquiries. These enquiries are across the board from 100,000€ apartments through to 2,000,000€ villas. Buyers are now actively looking rather than browsing.

So if you have been considering selling now is a good time to do it. Be realistic with your pricing and contact us before the end of the year so we can give it a real push in January. If your property has been on the market for a long time maybe now is the time to either review your pricing or if you have made any changes to the property we can take fresh photos which will definitely help.

Finally, another reminder regarding the Energy Certificates. Any property that does not have an energy certificate will be removed from the website after 1st December. If you want B&P to organise this for you please contact me as soon as possible.
New Website for Resort Resales Algarve
2013-10-14 16:48:04
Resort Resales was set up after seeing the opportunity being left by the major developers in selling resale property. As we have all seen, the developers are very reluctant to promote your resale property ahead of the new properties they have to sell. This is because the margin made from reselling a resort property for a fixed commission is almost negligible to the developer in comparison to the margin from the sale of a new property. This means they will always mark up the new properties in order to show value as well as only ever showing a resale property if they fear they will lose the client.

Selling Resort property has a slightly different approach than that of off resort property. The properties are subject to higher management & urbanisation fees (condominium fees) and the property prices are sometimes higher than off resort. Some agents use the price difference as a tool to sell the off resort property to a client, although agents doing this are missing the point completely. Clients wishing to buy on a resort are looking for a different proposition completely. They want security, they want the finished areas around the villa, as well as the services on site such as reception, bars, restaurants, golf, and tennis; and they are happy to pay a premium for those services.

Clients looking to buy off resort are prepared to be a bit more daring on their first overseas property. They are looking to buy in a specific location, close to the beach, close to the shops, bars & restaurants of the town they love. As I have said in previous newsletters neither is right or wrong just a different perspective on what they want to buy.

To this end we have always marketed resort property separately under the company Resort Resales Algarve. Here you can search across a wide range of different resorts developed by a range of developers. You can look specifically at beach resorts such as Baia da Luz or Quinta de Sâo Roque or perhaps golf resorts like Boavista or Parque da Floresta. You can compare the services they offer, the golf courses, the architectural design of each resort and the locations. Then once armed with all that knowledge, decide which resort suits you. You can also compare prices and see all the properties on one resort to see which property suits you best but not miss the other options on a specific resort.

The old Resort Resales Algarve website was launched in 2008 and has served us well, very well actually. We have received various compliments about its content, navigability and ease to read. However with the recent launch of the new websites in our other companies this site has started to look and behave in a dated way, therefore we decided to redesign the site to match our other websites. The new Resort Resales Algarve site is now live; take a look at it and I will welcome any feedback, good or bad. We still work to our 3 click policy, which means you should get to where you want to be with a maximum of 3 clicks of your mouse.

The new website will be operational from Monday 14th October, please take a look www.resortresalesalgarve.com
DELAWARE LIMITED LIABILITY COMPANIES - Pros & Cons
2013-10-14 16:48:00
Part nº1: Advantages of a Delaware LLC (This is the first of a 3-part series, providing an in-depth analysis of Delaware LLCs)

A Delaware Limited Liability Company is a “flow-through” entity (FTE) where income "flows through" to the beneficial owners; that is, the income of the Company is treated as taxable income of the shareholders in the jurisdiction where they are resident individually for tax purposes, not to the company where it is domiciled. Flow-through entities are also known as being “pass-through” or “fiscally transparent”.

On the positive side, the structure can avoid economic double taxation such as successive corporate tax followed by dividend tax on the shareholders because only owners or investors are taxed on income, not the Company. However, as taxable individuals, owners or “members” as they are called in Delaware, are not eligible for individual income tax credits or deductions on this “flow-through” income. Assessment is based on the Corporate Tax Code which is then taxed to the individual.

A Limited Liability Company: Advantages and Disadvantages
Choosing to use a Delaware Limited Liability Company can have long-reaching repercussions: taxes due, personal liability as well as applicable rules and regulations in the US and elsewhere.

Advantages:
+ Limited Liability: Unlike sole proprietorships or partnerships, an LLC allows the owners to shield themselves from personal liability if the business goes bankrupt, injures someone or otherwise runs into legal trouble. By defining a low share value as the basis for determining corporate liability, shareholders’ financial obligations can be held to a minimum. This means that, although the business might fold, courts and creditors will generally not be able to attach personally owned belongings. In other words, business and personal responsibility and assets remain separate.

+ Tax Flexibility: A LLC is not considered to be a separate entity from its Owners. This means that a LLC will not pay taxes directly; rather, the owners or “members” do individually in their jurisdiction of tax residence. This avoids double taxation that normally occurs with commercial companies: first corporate tax to the company profits, then a second assessment upon distribution of dividends to the shareholders.

However, Owners can also choose to have their LLC taxed as a US Corporation (albeit at 40%). This option is based on US “check-the-box regulations” and allows Owners to elect the way they want to be taxed.

+ Easy Set-Up: Starting a Limited Liability Corporation is generally simpler and faster than traditional forms of incorporation. Set-up costs can be as low as US$300 (± €235).

+ Less Paperwork: In terms of paperwork, LLCs are very flexible. Generally speaking, the LLC Operating Agreement (the equivalent of Company Statutes) is drafted so the Owner can choose the specific norms that govern the business. Otherwise, the Company will be governed by the default rules. With less stringent requirements for compliance and less necessary paperwork, LLCs are easier to form and easier to keep in good legal standing.

Next: Shortcomings of a Delaware LLC

Dennis Swing Greene is Chairman of the Board and International Fiscal Consultant for euroFINESCO s.a. Private consultations can be scheduled at in Guia (Albufeira) 289561333, Lisbon (Chiado) 213424210 and in Funchal (Sé), Madeira 291221095, by
e-mail at info@eurofinesco.com or on the internet at www.eurofinesco.com.
Where have all the investors gone?
2013-10-14 16:47:53
Inspired Property Investment Consultants emerged from the boom time of the mid-noughties. Investors looking to make a quick buck buying and flipping property was all the rage and why wouldn’t you? Property prices were increasing at a rate of over 10% every six months. Sales data collated by the Vigia group showed property prices grow by over 375% in just 5 years. This could not continue and when the crash happened in 2008, well, we all know what happened after that.

Investors were looking to invest with the banks money. Very few either wanted to use their money or in most cases even have the cash to purchase the properties they were buying. They could service the loans but that was when loans were interest only. Their strategy was to buy cheap through a plethora of overseas selling agents in the UK, Ireland and pretty much all over Europe. The agents were negotiating big discounts based on volume purchases as well as buying off plan as this enabled the developer to sell & build property using someone else’s money. In short everyone was a winner. The banks got the loan business, the developer sold his properties, the agents earned his commission and the investor bought a property using someone else’s money and then sold it on as quickly as possible for a profit.

Oh, how easy it was back then! Those days have gone! Property prices have slumped, banks are only lending if you can afford to buy the property for cash in the first place, bank spread is over 5% and rental yields have dropped due to an influx of rental properties on the market.

But it’s not all bad news. As mentioned previously, property prices have dropped by up to 40%. This means that property is now much more affordable than it was in the height of the market. Bank loans in the UK can be as low as 0.5% spread and vendors are prepared to trade at levels of prices not seen for almost a decade. If you have cash there is definitely a market for any investors. Take Parque da Floresta, finally coming out of its difficult times over the last few years. You can buy a 2-bedroom townhouse for as low as 140,000€. It is not that long ago that these properties were selling, as soon as they came on to the market, for almost double that amount. 5 star luxury apartments in Santo Amaro were being sold 3-4 years ago at 275,000€ and you can now buy one for less than 180,000€ fully equipped. Add this to a buoyant rental market and this could be a sound investment even for the seasoned investor.

While I don’t see the market increasing significantly over the next 3-5 years, if you take a longer term view on these purchases you could still enjoy the gains of a few years ago, this time just at a slower rate and calmer manner.

For investment opportunities or just to have a chat about the investment market please email Karen@inspired-property.com
How To Choose A Property Management Company
2013-10-07 14:13:19
When you buy a property, you may be offered the property management services by your real estate agency. Aside from referrals from our existing management clients, this is how we obtain most of our new properties to look after – clients that have enjoyed a good customer service through the buying process and are looking for that level of service to continue.

Before making your decision, there are a few things you will want to check off.

• Have you met the person who will be your main point of contact? If so, do you feel you could have a good working relationship with them and turn to them when you need help with something?
• Does your main point of contact have the back-up of a team in their absence?
• Would the agency be able to take care of your rentals as well as looking after the property?
• House account statements – will you have reliable online access to them?
• What services will you receive for your money? E.g. Frequency of property checks, meet & greets included or not, maintenance at cost or marked up.
• Is the agent legally compliant and do they provide invoices for their services?
• How can you check the bookings made and can you be confident the dates of your own visits have been logged?
• Can you be sure that all your bills are being paid for you, that you are not wasting water or power and that you are not over-paying?

You probably have plenty going on in your day-to-day life so it is important that you employ someone that you can trust and can rely on to be giving the property their proper attention, so that you can relax in the knowledge that all will be tip top when you return.

If you are interested in Resort Rentals Algarve managing your property, contact Victoria Johnson for further information at victoria@resortrentalsalgarve.com.
Latest Law Change - Energy Efficicency Certificate
2013-10-07 12:29:49
Following new legislation announced just a couple of weeks ago, all properties currently listed by any sales agent need to hold an Energy Efficiency Certificate. Previously, the need for this certificate was required only at the point of the deed and was used as proof that the property had been surveyed. However, laws have changed and now the property needs to hold the certificate when marketed for sale. The cost of this certificate is approximately €250 for apartments and €275 for houses.

However this is not really the bad news, the bad news is the short timescale that has been given to implement this new rule; the new law comes into effect on the 1st of December 2013! Failure to have the license will mean a fine of up to 3,740€ for home owners and up to a ridiculous 44,890€ per property for the estate agents! Therefore we will be forced to remove any property without the certificate from sale from this date onwards.

B&P will help all our vendors arrange for this certificate to be acquired. We will coordinate with the engineers, supply the relevant documentation required and file the certificate for you. All you need to do is arrange a time and date for the engineers to inspect your property and then pay the fee. B&P will not be charging for this service, you pay directly to the company undertaking the survey. Please contact us to arrange.

If you require any further information or just want to chat this through, please either call the office on 00 351 282 764 193 or email mail@bpaproperty.com
Income from Property
2013-10-05 11:22:34
If you let out furnished accommodations to holidaymakers on a short-term basis, you are engaged in tourist related services (Category B) and should have already acquired a Local Lodging Licence. This type of activity receives special treatment under the “Simplified Regime” and is handled in the same way as “Sales”. In other words, you are only taxable on 20% of your invoiced income and automatically have exemption on the other 80%.

REQUIREMENTS:
Before you start your independent business activity in Portugal, you must first register. This is done through the completion of an “Início de Actividade”, a) over the Internet, b) by form in triplicate or c) directly at your local Finanças office.

You will also need to register at the local Social Security office. However, contributions only begin in the first month of the second year of your activity.

Running your Business . . .
You are required to keep books to track your income and expenses. While old-fashioned ledgers still exist for this purpose, most people opt for a computer bookkeeping program to track their business income and expenses on a regular basis. There are over 100 such programs that Finanças has approved.

VAT
Just like any other business, you must register for VAT. If your business income is less than €10,000 per annum, you will be exempt from VAT. If your holiday let income exceeds €10,000, you must report quarterly the balance of your VAT: the difference between what you pay for business services and supplies and what you collect from your customers.

Tourist related activities currently charge the lowest rate (6%). Your business expenses are charged VAT at the higher rate (22%). The difference between the two is either paid to the State or returned to the taxpayer. Quarterly declarations must be done over the Internet and are in Portuguese only.

Non-Residents need to appoint a Fiscal Representative specifically to meet VAT obligations. In addition to the normal appointment procedures, the Non-Resident must issue a Power of Attorney to the Representative to answer any fiscal matters directly with Finanças.

“Faturas electónicas” (formerly called “Green Receipts”)
As in all business activities in Portugal, you are required to issue invoices to your clients. Mandatory receipts must be issued electronically via the Internet (Sistema de Emissão de Recibos Electrónicos - SERE).

Portuguese Income Tax
An “IRS” declaration must be filed in April-May following the fiscal year. Most will find the Simplified Regime to be both simple and economical when compared to standard accounting practices. Gross income is reported on Anexo B. In 2013, Non-Residents pay at the rate of 5%. Residents add 20% of the gross business income to other sources and pay at marginal rates.

Social Security
Beginning in 2011, the Contributive Tax Code changes how sole traders used to calculate contributions. An indexed system of payments, similar to salaried employees, replaces the choices previously available to the Self-Employed.

With the first-year exclusion still in place, Sole Traders make deductions according to the amount of taxable income received, according to the IRS declaration of the preceding year. Contributions are calculated on taxable income, not gross, so are based on 20% of gross earnings.

Alternatively, if you already contribute to Social Security or receive an old age pension, you may qualify for a full exemption.
Compliance

As you can see, playing by the rules works in your favour for a change. Most owners will find that they will be assessed only 5% under the Simplified Regime in Portugal. Equally important, they should also be exempt from further taxation in their home jurisdiction (when non-resident) given the Portuguese base of their business. In addition, most owners will be exempt from Social Security contributions.

New enforcement measures are under foot. Some “Câmaras” are “googling” the offerings in their council to make sure that Local Lodging Licenses are in place. “ASAE”, the enforcement branch of business regulation, is mounting inspection campaigns to assure compliance.

If you are still going by outdated assumptions about your rental activity, it is time for change. Not only will you be compliant, your Portuguese IRS tax rate will drop from 28% (rental income) to just 5% as Local Lodging income.

Dennis Swing Greene is Chairman and International Fiscal Consultant for euroFINESCO s.a. Private consultations can be scheduled in Funchal office (Sé) at 291221095, by e-mail at info@eurofinesco.com or on the internet at www.eurofinesco.com.
Residential Tourism
2013-09-28 10:47:53
Residential Tourism has always been of vital importance to the economy of Portugal and, in particular, at the present time with the well documented economic issues besetting the country and the turmoil within the Eurozone. Although sales of property in the Algarve, where the majority of overseas nationals purchase a second home, is generally slow, with the exception of the high-end of the property market. It is interesting to note that the rental market appears to be undergoing a renaissance, again particularly at the high-end, with a record number of tourists travelling through Faro Airport this year.

The rationale behind this demand would seem to be that even in, or maybe because of, these ‘austere’ times, people consider prime leisure activities and quality time with their families to be vital to their well-being. There are obviously other countries, such as Greece – who have far greater economic issues than Portugal and who have also reported an increase in the number of tourists - but why are so many choosing to obtain rental properties in Portugal, and the Algarve in particular. The reason would appear to be essentially for the self-same reason people purchased property here in the first place, namely:

Easy accessibility from most Northern European Countries

A safe and secure environment

A comprehensive range of quality leisure activities, and in particular golf

One of the most agreeable, if not the best, climates in Europe

The reasons for people renting a property seems to have changed as well over the last few years, inasmuch that previously people would simply use the property as a base and choose to eat out for breakfast, lunch and dinner on a regular basis. Whereas tourists appear to be using the property for entertaining and eating in on a far more regular basis. This change in requirements of the people renting is certainly supported by the fact that many restaurateurs have reported a downturn in the number of people eating at their restaurants. One would assume that although people are still taking their holidays there is still a consideration as to the overall cost.

The increased demand for rental properties has been satisfied by more owners deciding to rent out their properties to defray the running costs in these ‘austere’ times. The rental market in Portugal is very well regulated, providing protection and comfort to both parties involved in the rental of a property.

Many experts believe that the Portuguese property market is now at the bottom of the economic cycle and therefore now is a good time to purchase a property. Any potential purchaser, or indeed any current owner, may wish to consider the benefits of renting out their property to cover, or at least partially, the costs of maintaining. Albeit the income arising would almost certainly not cover any loan repayments. It is recommended that anyone seeking to rent out their property obtain relevant legal advice and use the services of a good rental company.’
Golden Residence Permit Programme
2013-09-28 10:08:01
The Golden Residence Permit Program is a simple, fast-track residency permit programme designed to attract foreign investment into Portugal. The governing regulations for the Programme were first published on 28 January 2013. As a result of the interest shown by foreign investors in this Programme, the Portuguese government has since amended the original rules to simplify the terms and conditions to obtain this residence permit.

Requirements
The Programme is only available to non-EU citizens who make qualifying 5-year investments in Portugal. These investments may be completed directly or through a company, meeting one of the following requirements:
• Purchase of real estate costing at least €500,000;
• Capital of at least €1,000,000 to be invested in any type of business or company;
• Creation of at least 10 permanent jobs (instead of 30).
The investment activity must be maintained for a minimum period of five years after granting of the residence permit.

Other Conditions
The Permit is first issued for one year and then subsequently renewed for successive periods of two years, provided that the requirements of the investment activity continue as well as the following minimum periods of stay in Portugal are maintained:
• 7 days during the first year (previously was 30 days);
• 14 days in the following two-year periods (previously 60 days).
Like other Portuguese residency visas, a Golden Residence Permit enables its holder to travel freely in the EU Schengen Area.
The bearer of the Permit may apply for family reunification. Applicants convicted of a crime will be excluded from consideration.
Authorities have 60 days to decide to grant the Golden Residence Permit once the application has been presented as long as proof has been submitted that the financial or real estate investment has been completed.

Citizenship
After the five year period, applicants become eligible to apply for Portuguese (EU) citizenship for themselves and other reunified family members.
Documents
To get you started, we will need:
• Valid Passport & proof of legal entry
• Criminal Record Certificate
• Proof of health insurance
• Signed Application & Service Contract
• Absence of Debts Declaration

Costs
Government fees, charged by SEF (“Serviço de Estrangeiros e Fronteiras), are aimed at a high net worth target market:
Application fee (per person): € 513.75
Approval (per person): € 5,135.00
Renewals (per person): € 2,568.75
Local charges vary among service providers but, as a rule, tend to mirror official costs.

by
Dennis Swing Greene
Dennis Swing Greene is Chairman and International Fiscal Consultant for euroFINESCO s.a. Private consultations can be scheduled in Funchal (Sé), Madeira 291221095, by e-mail at info@eurofinesco.com or contact us online at www.eurofinesco.com.
The Buying Process – made easy
2013-09-28 09:52:45
In my early days of living and working in Portugal, one of my most memorable experiences was the signing of a deed that I went to. It was in one of the old notary offices, 40 degrees heat, no air conditioning, smoking was allowed in offices back then and as you would expect it was all spoken in very fast Portuguese. To be honest it was quite daunting but at the same time was a real eye opener. I had heard stories about clients fainting in the heat, feeling nauseous and deeds lasting for hours…… I’m not sure it was ever that bad but those memories don’t seem to have faded.

Well times have changed, with the new breed of young, efficient lawyers who all speak better English than I do; the process is now quite painless. In fact for the majority of deed signings, the purchasers or vendors rarely attend.

So what is the process? Well, believe me it really is quite simple.

In short there are 3 stages to the purchase and sale.

1. Agree the sale – the negotiation is normally carried out between the vendor and the purchaser through the sales agent. Offers are made and hopefully an agreement is made on a purchase price as well as most of the conditions of the sale such as deposit, timing and furniture. Once a lawyer is appointed, all the checks to ensure the property is in a legal position to be sold will be completed.

2. CPCV or Promissory Contract – this is exactly what it says, a promise from both parties that they will sell & purchase the property for an agreed price against an agreed set of conditions. Usually the lawyer would issue an English version for the client to read, although it has to be a Portuguese version that is signed. This is documented then signed and is legally binding. The deposit is to be paid at this stage which this is usually between 10-20% of the sales price. If the purchaser pulls out following this legal agreement then they would forfeit their deposit. If the seller pulls out he has to forfeit the deposit and also pay the equivalent amount (i.e. double) back to the purchaser. To be honest this rarely happens as most purchasers have at least a couple of weeks between agreeing the sale and the signing of the promissory contract which is a reasonable cooling off period. In terms of money there are a series of taxes that need to be paid but these are made just prior to the final deed and will be paid for through your lawyer; I will be covering purchase costs in a future update.

3. Final Deed – the final deed is usually dictated by the time it takes the purchaser to arrange for his money to be moved around and sent over to Portugal. The final deed is drawn up based around the contents of the promissory contract so when the money arrivces, everything is in place and the deed can be signed. Usually a “sign before date” is included within the contract, this is to protect both parties and ensure that the exchange of contracts is time bound and doesn’t roll on forever with one of the parties waiting to either sell or move in to their property. Once the money has arrived the final deed will be agreed and signed; the property and monies are exchanged.

And that’s it! Although there are a number of other duties that the lawyer does such as:

Power of Attorney – this is where the client gives authority to the lawyer to enable them to undertake an agreed and documented series of actions, such as sign the CPCV or the final deed. This would be done prior to the CPCV so the lawyer can sign when everyone is ready. There is a nominal charge for this legal requirement.

Utility Changes – the lawyer will usually be responsible for the changing of names on the utility bills.

Fiscal Number – everyone in Portugal has a Fiscal number, this number is kind of like a National Insurance number and if you are to own a property in Portugal you will need one. Don’t worry it is very simple to get one of these, in fact this is one of the duties your lawyer will undertake. You could do it yourself but its fine for the lawyer to sort it and just advise you of the number. You need a Fiscal number for various things such as bank account and of course the buying process.

Bank Account – you don’t need to have a bank account here in Portugal, all financial transactions take place through your lawyer. The lawyers have special client accounts where your money goes, these are protected so your money is safe. The lawyer writes a cheque on signing of the contracts on your behalf. After this you may choose to have a bank account in Portugal to pay bills etc. but this is not essential.

So hopefully this guide helps makes things a little clearer. If you have any questions or queries you can either call me on 00351 282 764 193 or email me at david@bpaproperty.com
Tax Advantages in Portugal
2013-09-21 10:30:20
It may come as a surprise that filing a correct tax return in Portugal can actually save you money. Submitting a tax declaration is not synonymous with paying tax. The Portuguese tax code offers generous allowances and unexpected exclusions on certain forms of income, broad deductions for numerous types of expenses and liberal tax credits for many common expenditures. Many people find their tax burden to be significantly lower in Portugal than in their country of origin.

Note these examples:

Pensions
$ In 2012, each pensioner is entitled to a specific pension allowance of over €4,000. This means that a retired couple, after personal allowances, typically receives the first ±€15,000 of pension earnings free of tax.
$ Many pensions paid within European Union and beyond are entitled to an appreciable exclusion applying basic principles of elimination of Double Taxation. If eligible, an occupational pension of €60,000 should have little or no tax to pay.

Disabilities Benefits
Sometimes the common consequences of aging qualify taxpayers for 60% or greater disability status and still not hurt your golf game. If you are eligible, you will enjoy an enhancement to your tax deductible expenses.

Income from Portuguese Property
When reported as Portuguese-sourced business income, final tax rates are 5% or less with no further tax liability in the home jurisdiction for Non-Residents.

Non-Habitual Resident
$ Only the Portuguese-source portion of a non-habitual resident’s employment income will be subject to Portuguese Income Tax. This income will be assessed at a flat rate of 20%.
$ Foreign-sourced income will be exempt from assessment in Portugal when the rules of standing Double Taxation Treaties or the like are applicable.

Golden Visa Residence Programme
Non-EU citizens can achieve EU nationality in just 5 years following an investment of €500,000 in Portuguese property.

Tax Exclusions
Many forms of income benefit from generous exclusions, reducing taxable income and dropping the remainder into lower tax brackets.

Dividends
Dividends paid by Portuguese companies as well as those from any country within the European Union are entitled to a 50% exclusion and are taxed on the other half at marginal rates with withholding on national dividends.

Roll-Over Relief
If you sell your principal residence and fully reinvest the proceeds in a new home, the capital gain is exempt. This tax relief extends to new home reinvestment anywhere in the EU.

Royalties
Resident taxpayers are entitled to a 50% exclusion the first €40,000 of Royalties earned and partial relief above this level.

Rates Exemptions
When buying a property, you may be eligible for a six years Rates (“IMI”) exemption, depending on the value of your property purchase.

Portuguese Nominee Companies
Using a Portuguese Nominee Company when buying property in Portugal can provide many benefits including simplified bureaucracy, tax efficiency plus long-term CGT mitigation.

Inheritance Tax
Portugal abolished Inheritance Tax in 2004. Gifts in life and bequests after death to immediate relatives (spouse, children, grandchildren, parents and grandparents) are tax exempt. All others pay only 10% Stamp Duty.

Conclusion
These and other benefits are entitlements under legislation. It is your right as a citizen & taxpayer to take maximum advantage of these tax breaks. Who knows? Portugal may prove to be a legal “tax haven” for you within Europe.

By Dennis Swing Greene

Dennis Swing Greene is Chairman and International Fiscal Consultant for euroFINESCO s.a. Private consultations can be scheduled in Funchal office (Sé) at 291221095, by e-mail at info@eurofinesco.com or on the internet at www.eurofinesco.com.
Furniture & Furniture Packages
2013-09-21 10:08:22
#####Unbelievable value#### Full 2 bedroom Stock package now available in Store - €5,999 for everything, even the TV, Toaster and local delivery!

Call now for the full inventory and specification, hurry this won’t be around for long!

Other quality "ready-made" furniture packages are available online or in store including 2 new exciting high quality contemporary ranges. Abode also are offering some great discounts on 2013 exterior furniture ranges, limited stock available for immediate delivery

For more information, please contact Abode Furniture on: +351 282762070

Or email: info@abode-group.com

www.furnishyourabode.com
Resort versus off resort
2013-09-21 09:54:57
Once the decision has been made to purchase a home in the sun there is one further crucial decision to be made; do you buy on a managed resort or off resort where you are responsible for the upkeep of your property and surroundings?

Well the answer is, as ever, it depends; it depends on a number of factors. Do you want to live on a development that is manicured, with good security as well as having on-site facilities and services such as reception or cleaners? Or alternatively would you prefer an area that has a more natural feel to it; closer to the locals, often closer to the beach or town and also having the freedom to keep your property in a style that suits you.

Let us look at some of the pros and cons of each.

On Resort – as previously mentioned, allows you to own your property in a controlled environment. For example lawns will be mowed, pavements weeded, flowers trimmed and overall a pretty and smart way of life. Golf is on site, so is the tennis and you can have a full massage just a few hundred metres from your home and often at a discount! In a way this is the good life. The downside is that in some ways this “controlled” lifestyle can be a little restrictive; your property has to be kept in the style of the resort. Condominium rules and regulations mean that you have little say in how this environment looks or indeed is run. Finally there is a cost to this fine living, which can easily be as much as a small mortgage. Some resorts have condo charges of around 400€ per month, on top of this a management charge to look after the internal aspect of your property could push this up to over 500€ per month. Add to this the gardeners and pool maintenance and you won’t see much change out of 10,000€ per year!

Off resort – what about having your property in the town or close to the beach and live in the “real Portugal”? The property is yours and can be kept as you see fit. You can paint it the colour you want, you can have the plants you like in your garden and you can control the costs of running your property in line with your finances. The costs of an off resort property are also much less. Such as lower condo fees, for an off resort apartment these can be as low as 25€ per week to 150€ per week on one of the many new & smart small resorts. Ancillary services can be negotiated with your management company which should offer equally good services to those offered by the large resorts (in many instances better!) So what are the downsides? Well for starters you have to rely on all your neighbours taking as much pride in their property as you do in yours. The local council is responsible for the maintenance of the roads and local area; which can be in the lap of the gods especially during these testing financial times. And finally you will probably still require the support of a good management company to assist you in the running of your property ensuring that you don’t spend the first week of your holiday sorting out problems since you were last here.

So, as I said at the beginning, “it depends” - it depends on how you want to live your life on holiday, how much money you want to spend on the maintenance and management of your property as well as the environment you wish to live in. Either way there are many properties on both resorts and off resort. Prices used to be considerably higher on the resort but this has levelled over the last few years meaning that manicured lifestyle can now be achievable but remember there is always a cost!
Boosting the Portuguese Property Market
2013-09-16 11:43:55
Traditionally the majority of purchasers of second homes in Portugal, and particularly the Algarve, emanate from the United Kingdom. To undertake such a purchase an individual must have confidence in both their home market, from where there income originates, and the country where the property to be purchased is located. These conditions have obviously not existed over the last few years, indeed it is fair to say that the world, Eurozone and United Kingdom economies have been somewhat volatile (!?), hence the second home property market in Portugal, and particularly the Algarve, has been very quiet.

Historically, economic cycles rotate approximately every 7 years. We are now, arguably, 4/5 years into an economic recession and there would appear to be signs that we are moving, albeit very slowly, out of the economic recession. At the time of writing Greece had agreed to stay in the Euro, a bailout had been agreed for the Spanish banks and both Ireland and Portugal were adhering to the terms of their respective bailouts. In the United Kingdom the Bank of England had started to encourage Banks to start lending to both companies and individuals to stimulate economic growth.

Portugal has a well regulated property market with regard to planning and development and as such there is not a vast oversupply of speculative properties, as there is in Spain. As a consequence Portugal, and particularly the Algarve, has a well-deserved reputation for quality and exclusivity with purchases being made for reasons of life style rather than purely investment purposes

The Portuguese Authorities, the major Resorts and Developers and the Banks have recognised the prevailing circumstances together their strengths and have started to take initiatives that will allow them to promote the Portuguese second home market, particularly to the United Kingdom, as the economic conditions allow, and give individuals the confidence to purchase. In this respect the Portuguese Government, via the Secretary for State for Tourism has held meetings, with a number of industry professionals with a view to developing a competitive and strategic approach to residential tourism. The major Resorts and Developers have formed the ‘Portuguese Resort Association’ with the view to develop a structured and co-ordinated 10 year plan to sell significant properties into the Northern European, and in particular the United Kingdom, market. A number of Portuguese Banks will shortly be receiving an injection of capital to enable them to meet their international and domestic capital requirements, but also to start lending to both companies and individuals. One of the Portuguese Banks that undertook a comprehensive lending programme to Developers is looking to offer competitive mortgage loans to individuals rather than selling properties at significant discounts, as the Spanish Banks are doing, thereby avoiding depressing the market.

Another important factor that determines whether individuals buy is the prevailing exchange rate. Over the last year GBP has appreciated by some 12% against the EUR and a number of foreign currency experts are predicting a GBP/EUR exchange rate of 1.30 by the end of this year with the rate being maintained as it is felt that this is its natural level. This would obviously be of benefit to any purchaser from the United Kingdom. In addition it is predicted that interest rate for both GBP and EUR will continue at, or near, their current levels for the foreseeable future.
In conclusion the property market in Portugal, and particularly the Algarve, is very quiet, with prices in some areas having fallen by as much as 30/40% from their peak of 2008. In other areas prices have held up but this is partly the result of a lack of transactions. However it would seem that Portugal due to various initiatives and forward thinking will be in a good position to take advantage of any upturn in the market, occasioned by any economic improvement.
Long Term Letting
2013-09-16 10:26:16
Long term letting is a growing trend for quality properties around Lagos. It gives prospective residents the opportunity to get to know the town better and try out an area before committing to buy a property. At the same time, for property owners who haven’t been able to sell, it may give them the freedom to move on with their plans.

A near perfect storm we saw recently was an investment client looking for a buy-to-let, choosing a property whose owners loved their apartment but wanted to free up the capital and be able to return to the UK when the time was right for them, and so the former owners are now the tenants.

In most cases, utilities (water, electricity, gas and telephone/internet) are paid for by the tenant. Also any cleaning required during the tenancy would be at the expense of the tenant. Because of these 2 reasons, a long term rental of +12mths can often deliver a better net return than short term holiday lets. It is normal for council rates and any condominium fee to remain the responsibility of the owner whereas pool and garden maintenance costs could go either way.

Agreements of 6 months or longer are considered long term and with this type of rental; the rental license (known in Portugal as Alojamento Local) is not required. From 2013, the tax in Portugal of income earned from long term lets will be increased to 28%. However, maintenance, repairs, condominium fees, IMI and insurance can all be offset against it.

You should always work with a contract to protect both parties. Three copies are signed – the first for the landlord, the second for the tenant and the third for the tax authorities. The owner pays a tax stamp 10% of 1 month’s rent for this contract to be registered with Finanças. Some of the points usually included in the contract are that the tenant has no right to make changes or sublet the property and the landlord can give 24 hours notice to inspect the condition at any time. The rent is usually paid monthly in advance and a security deposit taken on entry to the property.

For more information please contact victoria@resortrentalsalgarve.com
Buy to Let
2013-09-16 10:17:47
Whilst deciding to write about buy to let, the subject got me thinking about who actually buys these types of properties with the goal of letting them out? Is it who we may call investors? Or is it someone that needs the rental income to afford the property? Or perhaps it is merely someone who wants to cover the running costs of the property?
The common factor is that whichever of these categories you fall into, you are looking for a return on your investment. Whether you are a seasoned investor looking to receive a yield that would outperform other investments you may have; stocks, bonds, gold or whatever else you have added to your portfolio over the years. Or perhaps you are looking for a retirement fund and a place abroad kills 2 birds; a holiday home which also gives you some income. An overseas property sounds like a good idea…..
And it can be. If you are a cash buyer and looking to rent your property and receive these proceeds as part of your income, as well as covering your running costs, then this is definitely achievable. If you are an investor that has cash to invest, then again for the same reasons, the returns can be healthy.
Where this all begins to falls down is when the bank is funding the purchase……
In years gone by property prices in the Algarve were rising monthly. 2003 – 2005 saw increases of approx. 375%, while similar figures from 2003-2007 were again at around 350%. But this couldn’t go on forever and as we all experienced massive crashes in capital value, 2008 – 2013 saw values drop as much as 40%.
So you are now stuck with a property that you bought, thinking it would simply wash its face, keep for a couple of years, see a 50% increase in its value and sell on. This time next year Rodders….. Unfortunately bank charges increased, rental values declined and if you bought on a resort the condo charges have increased also; suddenly that investment is turning a bit sour.
So going back to who bought these properties in the first place, this all means that the true investors who were using the bank´s money to buy and turn a property have really been caught out. A lot of the repossessed stock on some of the major resorts is the result of these kinds of investors losing out. However, the purchasers who bought to help cover the costs have also been burnt. As again due to aforementioned increases those buyers are now struggling to meet increased mortgage payments and increasing condo charges.
Finally, you have the cash investor. He is now sitting safe and sound. Yes his investment has reduced since his purchase but he is still getting the same or similar return on his investment.
Who should be looking at buy to let in the current market? Well I think the last few years have taught us a lot. Only invest what you have, borrowing to invest was great while property prices were on the up and interest levels low but not so good following the crash. However, the market is now 40% down in capital value. Developers are prepared to do deals to move stock on. Rentals have been on the increase over the last couple of years. There is plenty of choice, so choose only where there are sensible condo charges. Finally don’t be greedy; as they say if it sounds too good to be true……..
Savings on transfers
2013-09-09 12:28:36
The variety of ways in which we are helping clients achieve real savings with their international transfers continues to increase!

Recent examples include a British supermarket in Spain who import all their products from the UK. By working with Premier FX they are seeing a significant reduction in their costs, which in turn has meant they do not need to increase their in-store prices thus benefiting their consumers – that’s most of us of course!

Then there is the retired Algarve resident who, by fixing an exchange rate for his UK company pension transfer, has calculated that he has added a further month’s worth of income this year! Every little helps, of course! Contact us now to see how we can help you too.
Energy Efficiency Certificates
2013-09-09 12:25:18
There has been a recent change in the Law (Decree Law 118/2013) to the energy efficiency certificates and its requirement in Portugal whenever a sale is done.

Up until now, the Law only obliged owners to present this energy efficiency certificate on the day of the final completion deed, delivering it to the buyer of the property in the presence of the Notary that certified the completion deed.

With this new law that will commence on December 1st 2013, all property owners that have their properties on the market and advertized with real estate agents are obliged to have the energy efficiency certificate and will have to deliver to the buyer (or the legal representative) a copy of such certificate, when the promissory contract of purchase and sale is signed.

There is now also the obligation to write on the completion deed the number of the certificate, which will ensure and help the inspectors make sure that the energy efficiency certificate exists and was correctly issued.

This alteration in the law will allow all new buyers to choose a property, not only based on its looks, but also on how efficient it is, as we do with white goods/kitchen appliances.

The fines for all owners or even real estate agencies that do not comply with these new rules can vary between 250€ and 3.740€, if it is an individual that is being fined, or 2.500€ and 44.890€, if it is a company that is being fined.

Considering the thousands of properties that are advertized without this, and the small number of companies that issue Energy Efficiency Certificates, it would be a good idea to not leave this until the very last day and be proactive, and request the certificate as soon as possible.
End of a long summer…. Well nearly
2013-09-09 12:14:58
2013 has been hot here in the Algarve, on top of the heat we have also had very little wind which is uncommon for the Western Algarve. Well I can also tell you that we have also experienced new heights in clients viewing properties as well as actual sales.

August is notoriously a bad month for Real Estate Agents here in the Algarve. The streets are full of holiday makers enjoying the sun and the beach as well as families trying to control excited kids at the pool or beach. This means that there aren't normally many “real” buyers and we tend to get aspirational house hunters taking a look at the end of their holidays. This is fine as we see all clients as prospective even if they are for the future. So it has been a real shock to see the levels of “real” buyers during July & August. In one week alone during August we had 25 clients come through the door for viewings! Busy week for myself and the girls I can tell you!

This has meant that here at B&P we have had the busiest August in terms of viewings and sales since 2005. Sales are across the board from large exclusive villas through to holiday boltholes.

So why is it that suddenly we are rushed off our feet and clients are buying again? Well, as pointed out in previous updates, I think that buyers have waited long enough. You can’t put these things off forever and if you have been planning to buy your holiday home or even relocate to Portugal it appears that now is the time to take action. So it definitely appears that properties are selling again. At least 3 potential buyers missed out on the property they wanted because it sold before they made their mind up, I haven’t experienced that for at least 4-5 years. This is all pointing to a recovery, but let’s not gets carried away, prices are still down as much as 40% on 2008 values and I can’t see an uplift in values for at least another 2-3 years. What I do see is more purchasers, all looking for a great value buy and sellers still prepared to trade. I am sure this will level out but let´s hope that if you are buying you act now & if you are selling be prepared to trade!
Capital Gains Tax (CGT)
2013-08-30 10:21:40
Capital Gains Tax in Portugal is payable on the profit made from the sale of any asset, which may be share of companies, properties, or any other assets. For all non – residents, this tax is due. Portuguese tax residents, who subsequently re-invest the profit in another permanent residence do not have to pay this tax.

For properties, you can calculate the CGT by calculating the difference between the purchase price of the property and the price at which it is sold. In addition, certain deductible expenditure is allowable and an indexation coefficient is applied to the purchase price to account for inflation. You can deduct all taxes paid with the purchase, plus legal and notary fees and with the sale, even the commission paid to the real estate agent can be deducted and hence then reduced the tax amount needed to pay. All the costs of any improvements made to the property, which are likely to have increased its value, made within 5 years prior to the sale can also be deducted. So you should keep copies of all of these expenses to ensure that they are taken into account when the property is sold.

For non-residents, the current rate of the CGT is 28% of the full profit amount, whereas for Portuguese tax residents, the rate is based only on 50% of their profit.
Now is the time to invest
2013-08-30 10:17:40
If you listened to most agents or even property vendors you might become quite depressed by the state of the property market in the Algarve. However, I don’t quite see it this way.

Since October 2011 we have seen a consistent rise not only in the number of enquiries received but also by the volume of hits on all 3 of our property websites, www.bpaproperty.com www.resortresalesalgarve.com and www.inspired-property.com . This has resulted in a significant upturn in viewing trips and ultimately sales.

Of course we are in a buyer’s market, buyers are fully aware of this and on the back of this trend we are encountering some very aggressive offers sometimes in excess of 40% below asking prices. However this is not the norm. Offers in general are below asking price but overall are within 10-20% of the asking price.

Vendors willing to take a hit on their property are the ones selling their properties. Sometimes, due to the swing in the exchange rate movement over the last 8-10 years, vendors are still walking away with the same sterling investment they made when they originally bought the property. Part of the issue is vendors are used to seeing huge gains. 2000 – 2005 saw gains in Lagos alone move over 350%. 2003-2007 saw similar gains. However these gains were unsustainable and have hit the owners hard over the last 2-3 years.

The market, for some of the more assertive agents, is now recovering with sales doubling since 2011 albeit at much lower values. But how long will the current market last…..

Well we believe the time to buy is now. Prices are at a 5 year low, and investors / buyers have been sitting on their cash for too long. However, the window of opportunity to get the best deal is a short one. As the market improves vendors will slowly get their confidence back. You may see this as an unrealistic possibility at the moment but we are already seeing this with the number of enquiries and viewing trips scheduled for this autumn. As the vendors become confident they become less likely to accept the aggressive offers being made, thinking there will be another buyer around the corner. My advice would be not to assume this will be the case.

If you are a buyer, now is the time to buy. The best prices and in a way vulnerable sellers. If you are a seller, now is the time to sell. An increase in potential purchasers all looking for a deal.

The final point is double edged. Lending – this really is not an option currently. The banks are lending but at relatively highs spreads, low loan to values and excessive criteria. This means the buyers are almost all cash buyers. In part this is dictating the market. Buyers with a fixed level of cash to invest would in previous years use their cash amount as deposit and borrowed the balance to purchase their property. They are now simply looking to buy a property for their cash value. In some instances buyers have re-assessed the level of property they are buying to the level of the cash they have. In some instances the buyers wants the same property they would have bought with finance for the same level as their cash available. As a vendor the choice is yours…..
Exchange Rate Surprises!
2013-08-30 00:00:00
If you have been watching the Pound / Euro exchange rate over recent weeks you will have seen that rather than sliding further down as the market was predicting, it has in fact moved upwards!

This has surprised many analysts. However, it is more to do with the weaker US Dollar as this has strengthened the Pound somewhat as well as slightly more positive economic data emerging from the UK. How long this will last is anyone’s guess at the moment, but it does reinforce our view that unless you have a simple strategy for your currency requirements, you really are at the mercy of the markets!

Of course, this is where we at Premier FX can help, so why not give us a call for an independent, no-obligation chat? For more information, please contact Premier FX on: +351 289 358 511
Or email: info@premfx.com
Furniture & Furniture Packages
2013-08-26 15:38:16
Abode Furniture provides a range of high quality "ready-made" furniture packages which can be adjusted to your own requirements, the furniture packages are completely flexible so feel free to change items, increase or decrease the inventory, pick colours or fabrics, alternatively leave it up to us! One of our experienced team will gladly guide you through the entire process and assist with all of the choices and decisions if you haven’t got a feel for interior design. Prices start from €3,299 and you can buy as much or as little as you need!

For more information, please contact Abode Furniture on: +351 282762070 or email: info@abode-group.com. Or visit our website http://www.furnishyourabode.com/
Benefiting from exchange rates
2013-08-26 09:57:37
Are you considering investing in a holiday home in the sun? If so, you will have already recognised that the exchange rate can have a dramatic effect on the price you will finally end up paying.

Just over the past year alone, the rate has varied dramatically from a high of 1.26 to a low of 1.14. Now if you are looking for a €300k villa, that rate differential equates to a staggering £25,000! Just think how much furniture that could buy. So why take the risk on exchange rates?

Talking to the Premier FX team early on in the buying process can help significantly reduce that risk as we will devise a strategy tailored precisely to your own circumstances. Meaning you can relax! Give us a call today or visit our website www.premfx.com to find out more.
Five easy steps to help sell your property.
2013-08-26 09:51:54
Presentation - the property needs to be presented in the best light. Remember you only get one first impression. We have all heard of kerb appeal but this continues through to the first steps on entering the property as well as the first steps walking out to the external areas.

1. Maximise the light – Open all the shutters prior to viewing and if possible turn all the lights on in the house. No-one wants a dark or dull house. Remember they are buying here because of the sun!

2. Keep it clean – Especially in the winter months try to arrange for a clean every month or so. Believe me walking in through cobwebs and a thousand dead flies on the floor does not make the job of selling any easier.

3. Declutter – Buyers want to imagine living in the property. Too much clutter, too many photos and ornaments make the property too personal. The buyer’s want to see themselves living there, not feel like they are intruding. Simple is best!

4. Set the scene – If possible, and especially if you are already at the property, try to set the property up to show them how they could be living the dream. At the end of the day we are trying to sell them their dream home and by scene setting this makes the job easier. Think bathrooms clean, tidy with fresh towels, sun loungers all in order and ready to lie on, you could even go the extra mile and set out drinks on the terrace; anything to give your property the edge.

5. Let the agent do his job – It is tempting to follow the agent round while he shows your property. You are worried that he may miss out on one of those all important details. Believe me this does not help the agent. Remember the agent has probably already shown the client several properties by the time he gets to yours. He knows what the buyer wants and is most interested in. Let him do his job and trust him to sell your property using the knowledge he has gained from previous viewings. Hovering round just puts everyone under additional pressure including the buyer! He won’t give any honest feedback while you are in earshot.
The best way to list your property
2013-08-21 11:00:00
When selling your property how do you choose an agent and what are the benefits of an exclusive contract versus a non-exclusive contract?

When you initially decide to list your property for sale you will find lots of Estate Agents to choose from. So how do you choose? Well before you do, decide whether to list your property with one agent or whether to list with several.

You may feel that the more agents you list with the better the exposure…… I’m afraid this is not always the case. By listing your property with multiple agents can sometimes have the opposite effect. Firstly, from the mind-set of the agents, if they know the property is with 5 or 6 different agents they know that there is a chance that other agents could well be presenting the property or have already presented the property to the prospective client. Therefore it is understandable that an agent would lead with properties that he knows only he can present and have a better chance of making that sale.

This therefore has the opposite effect meaning that your property could be presented further down the line rather than first. Also on a marketing point of view again if the property is listed with a number of agents and then included in marketing on the major portals this again could have a detrimental effect. The property shows up on the web portal several times and actually loses impact and can also look desperate. This can result in prospective purchasers dismissing it or simply overlooking it.

The alternative is to choose one agent that you believe can sell your property. You need to be comfortable with your agent and be happy with how they market your property. This starts at the initial meeting but follows through with the quality of the website, the quality of the pictures and the quality of the write up. Remember this is the hook that will entice prospective buyers to either email an enquiry or walk in the door of the shop.

So in summary a little research and maybe even a face to face discussion with the agent will give you a better idea of who will present your property the best and also be the most committed to selling your property as quickly as possible. Don’t be afraid to ask how they plan to market your property, what web strategy they have and also how are they performing in terms of hits and enquiries. At the end of the day you are going to be paying them to do this for you!
Where can you send your money?
2013-08-21 11:00:00
Did you know that with Premier FX currency exchange services you can send money in most currencies to any account worldwide? Whether you are planning a major transaction such as buying property, paying a third party for goods or services, making a regular transfer of pensions or savings, or simply topping up your local bank account, Premier FX’s competitive exchange rates and no fees mean that you will save real money on your international transfers.

For more information, please contact Premier FX on: +351 289 358 511
Or email: info@premfx.com
Rental Licence
2013-08-21 11:00:00
The rental license (known in Portugal as Alojamento Local) is now required if you rent your property in Portugal on a temporary basis, i.e. holiday rentals.

There are some general requirements, as well as hygiene and safety measures that need to be met. This rental license is submitted to the local council of the location of the property and may be subject to a survey inspection.

Fines for not complying with the legislation range form 3,500 - 25,000 Euros.

If you are looking to legalize the status of a property which is used for short term letting contact us and we will take care of all the required paperwork for you.
Are buyers getting used to this current difficult climate?
2013-08-01 15:37:54
It appears so. Sales & sales enquiries are up 50% versus last year, demonstrating that there is either a new found confidence in the market or an acceptance of the current climate becoming the norm. Or is it that prices have now dropped to levels that are more appealing than leaving your money in the bank and now is the time to buy bricks and mortar.

Either way although not on an upward curve, we are definitely seeing a levelling off in terms of prices and now growth in sales activity……

Following a difficult few years following the crash in January 2008 we have seen a steady growth in business since November 2011. The market was not only affected by the economic downturn and lack of confidence but also by the banks inability to lend to overseas clients, or residents for that matter. So following grass roots late 2011 we have seen a steady improvement since then. The banks are now lending again, which is clearly helping. Both BPI & Caixa Geral de Depositos banks are now lending and even Santander have been known to process the odd application! Let me know if you would like an introduction to the relevant overseas mortgage adviser at each of the banks.

What is still not helping is the exchange rate. This seems to be levelling at around 1.15-1.16 meaning that prices versus the heady days of 2004-2006 are long gone. Clients appear to be coming to terms with this and expectations of high exchange rates are something of the past.
Where now for the Pound and Euro?
2013-07-15 16:52:37
Those of us thinking about buying a dream home in the sun would all love to be back in the days of the 1.50 exchange rate of course, but that just isn’t going to happen in the current environment.

Exchange rates are influenced by many things not least of which is the UK economy.

Given the economic climate at the moment, the market has been predicting that the rate should be much lower than it currently is, but other factors are keeping it propped up. Consequently, we think today’s levels aren’t too bad at all for those considering a purchase!

For more information, please contact Premier FX on: +351 289 358 511
Or email: info@premfx.com
Wills and Probate
2013-07-15 09:00:56
If you are an owner of a property in Portugal and are not Portuguese, it is sensible to make a Portuguese Will. This Portuguese will should be just in relation to your Portuguese assets.

Probate should start at the Tax Department before the end of the third month following the death and this is initiated with the Portuguese Will and a declaration of Law of the country of nationality.

A Portuguese Will must be signed at a Notary Office. Two witnesses are required plus a translator, if the grantor does not speak Portuguese fluently, and then all must sign the Will.

Although this process has costs it avoids future complications.
To know more, please contact us at: info@bpaproperty.com

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