Why invest in a real estate project in Lisbon?
Many newspapers and economic journals put on the front, the interest of investing in Portugal and especially in Lisbon.
A rate of return of up to 20% gross per year and much higher than what France can offer you today and with less constraint.
I explained to you in advance the situation of the country, the conditions of the real estate market and that of Lisbon in particular.
With some good advice, you can also achieve a unique rate of return and smoothed over 12 months.
5 – Very good reasons to invest in real estate in Lisbon
A stable, cheap country with good taxation!
■ It’s time to invest. An attractive tax system:
- No wealth tax,
- No inheritance tax for spouses and direct heirs,
- No residential tax,
- Moderate land tax: 0.3% to 0.5% of the value of the property,
- Transfer tax: 1% -6% depending on the value of the property,
- No VAT on rents (with some exceptions),
- Moderate property taxes: 21% for a legal person through an ICS or 28% for a non-resident natural person,
- Many exemptions from taxes on real estate gains, especially if they are reinvested.
■ Operating costs and a much lower cost of living than the rest of Europe.
- The cost of current expenditure (food mainly) being among the lowest in Europe , it allows an easy standard of living for foreigners in northern Europe.
- A health system highly rated by WHO (World Health Organization), 12 ° in 2014.
- A stable European currency and limited financial risks (exchange rate, inflation, interest rates controlled by the European Central Bank).
- The easier administrative procedures and full transparency in the procurement process for foreign buyers.
- A favorable tax : no tax on inheritance and donations for residents in Portugal, special regime of exemption or reduction of tax rates on income for non-habitual residents.
- An investment , still today, regarded as leading and safe , by many French and European residents. Many real estate opportunities are to be seized!
■ Portugal is the European tourist destination which has seen the biggest increase in the last3 years in Europe with 9.3 million visitors in 2014 and 10.2 million in 2015.
The Azores archipelago grew strongly by 23.7% in 2015, for a total of 427,600 tourists, nearly half of whom are foreigners, taking advantage of the opening of airlines at the end of March to low-cost airlines.
■ Tourism, which accounts for 10% of Gross Domestic Product (GDP), is one of the sectors that contributed the most to Portugal’s economic recovery after two and a half years of recession. (Afp, January 2015)
■ A very good potential for rental investment in the seaside and in the capital; GDP growth, estimated at + 1.6% in 2016 (vs -3.3% in 2012); A markedly improving public deficit, 3% in 2015 (vs. 11% in 2011), and anunemploymentrate that will decrease by 17.5% in 2012 to 12.4% in 2015. All these assets contribute to a quality of life Very pleasant in the context of the choice of Portugal as a permanent place of residence or for an investor.
1 – The real estate market in Portugal, a new bull cycle
The crisis of 2008 violently touched Portugal a few years ago. Real estate prices fell in the major urban centers, in the order of 10% and even more in the countryside with a 25% decrease. Unlike Spain, there was no real estate bubble in Portugal.
Over the past 3 years, prices have risen again and are expected to continue to climb for the next 2 years before stabilizing in 2018.
Institutional investors and foreign individuals have realized how Lisbon is a cheap city and very pleasant to live , where tourism explodes with more than 2 million French over the last 12 months. Porto and the Algarve are the other two “spots” that are experiencing the same enthusiasm.
2 – A huge demand for short-term rental housing with very high profitability:
Making seasonal rentals 365 days a year is a very profitable business especially in Lisbon.
Tourism is growing exponentially and Lisbon is experiencing the same enthusiasm as Barcelona a few years ago and the city lacks adapted housing. It will take a few more years for the real estate and hotel parks to adapt.
There is still time to get back on the market.
During the high and summer months, the market lacks adapted products and the short-term rental units of type AIRBNB are not sufficient on demand. The daily prices increase strongly with a very positive impact on the profitability of your investment.
Example of an investment of € 165,000:
3 – Investing in the sun in a capital like Lisbon means minimizing the risk.
The south of the city center to Cais do Sodré, and the northern limit where to invest is Rato, Marquês de Pombal, Saldanha and Arroios, see Benfica for business tourism and football.
Price of New Price of old
- These are still the central districts that are sought after by tourists, locals, and investors.
To compare with Paris, this would amount to investing in the first 11 districts.
4 – Portuguese legislation favorable to buyers.
The procedure for the purchase / sale of real estate in Portugal is quite similar to that in France, for example: The seller pays the agency fees and the buyer pays the tax on the transmission of the property , Known as IMT.
Link notary: firstname.lastname@example.org
5 – A country where it is good to live all year.
Come to Lisbon for the first time and you’ll want to come back. The charm of the city to the 7 hills that allows you to get lost in the small streets or stroll away from the noise. At each turn of the street the charm operates as if time here flowed otherwise.
The life is quieter, less stressful and this observation is also made by the businessmen who come to stay and then leave it.
The proximity of the ocean , a less polluted or saturated air because swept by the wind of the Atlantic. A pleasant weather 9 months out of 12.
An international airport that hosts all the major airlines that take you to the whole world or to Paris in 2:15, Madrid in 45 minutes and Geneva in less than 2 hours. Not to mention the Azores and Madeira!
A much cheaper cost of living in the order of 30% . Small restaurants or large creative tables at the right price with very appreciable local wines who knew how to win their stripes.
With one of the lowest GDP in Europe, a smic to 500 €, a very narrow job market and less generous social benefits than its neighbors, Portugal does not dream. Also, the country is spared by the migratory currents that reach northern Europe seen as a rich and prosperous whole.
Crime and delinquency rates are among the lowest in Europe and the world (see link and map)
Nautisme and grand broad: For sailors and ocean enthusiasts, the price of a ring for a boat remains cheaper than in France. The wonders of the coast make it possible to get away from it all and make cabotage.
In conclusion many seers are green and seem to indicate that tremendous opportunities are to be seized in the real estate sector in Portugal. Common sense and accompaniment by professionals are recommended at each stage of your investment and then its leasing.
Lisbon will become an even more attractive city in the years to come.
The price decline between 2008 and 2012 is only 10% (compared to 25% of the country). As an example, a 3-room apartment of about 100 m2, which sold for 320,000 euros in 2008, sold for 265,000 euros in mid 2013 and 350,000 euros in April 2015. Next to Imovirtual, the average price for Lisbon is now 3.426 € / m2 for an apartment and 3.517 € / m2 for a house, any state confused (new, old renovated and old to renovate).