Portugal’s had a fantastic 2019, with plenty of great developments for anyone looking to move or invest here, and this looks set to continue this year. Here’s our round-up of the best of 2019, and what to expect if you’re buying a property in Portugal in 2020.
Portugal tops the charts
Portugal’s had a great 2019. The country placed third in the most recent Global Peace Index, and continues to welcome new residents from across the world. Many of them are attracted by pragmatic initiatives such as the Golden Visa and the Non-Habitual Resident tax scheme. These can provide practical and financial benefits to accompany Portugal’s wonderful climate and friendly society.
In this article, we take a look at 2019 in Portugal, with a particular eye on the property market and on events of interest to overseas buyers. We then take a look at what 2020 has in store for one of Europe’s most appealing and affordable countries.
The first Your Overseas Home show of the year has been announced for London on 7th March. It’s the one-stop property show aimed specifically at serious buyers looking at purchasing in the next twelve months. You can meet experts from Portugal in property, finance, law and more all gathered under one roof. Tickets are free and do go fast, so make sure to get yours today.
The Portuguese property market in 2019
After several years of runaway growth, Portugal’s property market has seen more of a sense of calm in 2019. However, calm doesn’t equate to stagnant. Sales have remained steady, but it is fair to say that supply and demand have come into better alignment. This makes for a less pressured house search for those in the process of moving to Portugal.
Despite a calmer property market, house prices will still have risen by 4% come 2020, according to Moody’s.
Many new developments hit the market in 2019, and more are on the way. This has definitely helped to calm down the long run of price rises. It’s also great news for buyers seeking sleek, modern homes, as there are plenty of them out there.
The rental sector continues to grow apace, with rents climbing by 3.4% year-on-year.
One area where demand hasn’t fallen one bit is in the rental market. This sector continues to grow apace, with rents climbing by 3.4% year-on-year. In Lisbon, the rental market is even busier, with rents rising by 4.3%. This will be pleasing news for investors, who continue to have the enviable choice of profiting from either holiday rentals or long term tenancies.
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Speaking more generally, the healthy calm of Portugal’s property market is reflected in the country as a whole. Consumer confidence is described as “robust,” and there are no political shocks on the horizon.
Moving to Portugal in 2020?
Portugal held elections in October 2019, resulting in a socialist-led coalition government under the incumbent Prime Minister António Costa.
This relative continuity of leadership removes uncertainty in the country and seems likely to ensure the consistency of existing initiatives. The Portuguese government has been very proactive in matters of housing. This doesn’t only refer to programmes for overseas buyers such as the Golden Visa and Non-Habitual Residency scheme. The government has also taken decisive action on things like affordable rentals and Airbnb-style lodgings.
There are a couple of small details that new arrivals for 2020 should be aware of. Both of which, at the time of writing, seem likely to form part of the state budget for the year.
The first is a new sales tax on luxury homes. There was already a one-off 6% tax on homes over €574,323. This will remain in place, but buyers of homes valued at over €1 Million will now pay 7.5% instead (subject to approval of the budget).
The tax is based on either the officially documented value of the property, or the transaction value, whichever is higher. It seems likely there will be some tweaking of sales prices for properties near the thresholds for these taxes. Presumably the way the tax operates is an attempt to minimise this circumvention of it!
There are also plans for a Capital Gains tax exemption for people renting out properties in the long term. This may not affect many planning on moving to Portugal permanently. However, it’s solid news for investors. It’s worth keeping in mind, however, that you must rent a home out for five years to qualify for the exemption.
The healthy calm of Portugal’s property market is reflected in the country as a whole. Consumer confidence is described as “robust,” and there are no political shocks on the horizon.
Brexit on the horizon
After a long period of uncertainty, it now seems almost certain that Britain will begin the process of leaving the EU on 31st January 2020. This will see the beginning of a transition period, during which time freedom of movement and other formalities of EU membership will remain in place.
If you’re ready to buy in Portugal, but you still have questions, then don’t hesitate to call your Portugal experts in our free Resource Centre. We can introduce you to a trusted estate agent or lawyer, or talk to you about currency. Call us on 020 7898 0549 or email [email protected].
It’s fair to say that unanswered questions remain. Much will depend on negotiations over the coming months. However, the Portuguese authorities have been consistently vocal regarding their intentions to continue to welcome Brits regardless of the outcome – “as residents, as tourists, as investors, as students.”
With the festive season underway, Portugal continues on a positive track. As just one example, The Portugal News has reported that hotels in Porto and the north of the country are “almost full” over the new year. Portugal’s stability and optimism is a delight to see and offers a notable contrast to the recent turbulence in the UK.
If you’re thinking of moving to Portugal in 2020, there can be sure there are plenty of others mulling over the same decision! For more information on life in Portugal, check out this article.