Case study portugal

Tony and Gail fly the flag for Portugal

Portugal is a clear favourite with Tony and Gail Greene from Burnham in Buckinghamshire. In 2000 they bought their first property there, a two-bedroom apartment in Dunas Dorados on the Algarve, and three years later they exchanged it for a second property, a townhouse in the golf resort of Praia D'El Rey, one hour north of Lisbon.

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"We have holidayed in Portugal for over 14 years," says Tony Greene, a British Airways captain. "We love the weather and the opportunities it provides to play sport and live outside. With a growing family it seemed the perfect place for an overseas home."

The Greenes have three children, Dan, Charlotte and Harry aged 17, 14 and 11 and, as they love the wide sandy beaches and swimming in the Atlantic, the family chose Portugal. This is a family that likes to keep active and Tony, a keen surfer, has passed his enthusiasm on to his children. Gail, a personal trainer, says even in winter they all pile down to the beach. "It's rather like Cornwall where even when the weather isn't hot, we can have great fun charging around playing ball games. And we all have wet suits to surf year round."

In 2003 when their family had outgrown the 90 sq m apartment in Dunas, they made the decision to buy a bigger property. "We couldn't afford to upgrade in the Algarve so looked further north," says Gail. They had friends who were looking at property on the Silver Coast north of Lisbon, not an area of Portugal that they knew much about but went out on an inspection trip organised by the developers of Praia D'El Rey. "They arranged the flights, car hire and accommodation at The Marriott Hotel on the resort for a nominal sum," says Gail. "It meant that we could explore the area and get the feel of the resort."

Praia D'El Rey is set in 600 acres of scented pine forest on the edge of a wide Atlantic beach. When fully completed it will have 800 apartments and villas. The resort has an 18-hole golf course, seven all-weather tennis courts and a spa and health centre along with a Marriott Hotel and a good selection of restaurants and bars. Property prices start from €242,000 (£163,000) for a one-bedroom apartment and €695,000 (£468,000) for a four-bedroom villa with good sea views.

The Greenes bought a three-bedroom and three-bathroom townhouse for £230,500. At 190 sq m it was more than twice the size of their apartment in the Algarve but cost only £40,000 more.

"Life is very simple there. It's quieter and less crowded than the Algarve," says Gail. "The weather can be changeable but while the Algarve can be very hot in summer, this coast is cooler."

The Silver Coast is named for the jagged cliffs that face out to sea. The Atlantic here is dramatic and wild and some of the beaches have dangerous undertows. The Greenes choose to swim at Peniche or Baleal where the beach is flatter and only ever swim when there are coastguards on duty.

So how easy was it to buy their property? "For the most part the process went very smoothly," says Tony. "The most important advice for buyers is to employ an experienced Portuguese lawyer who is totally fluent in English. We were lucky enough to get a personal recommendation from a friend who had already bought on the Algarve and have used the same lawyer twice now. She made everything very straightforward and gave us peace of mind."

Their purchase at Praia D'El Rey proceeded smoothly with Tony having to find time to visit the notary twice: once to sign the preliminary contract, Contrato Promessa de Compra e Venda, and then again when they were ready to complete.

"Unlike the British system, the notary's office gets quite crowded," says Tony. "As well as me and my lawyer there were the sellers and their lawyer. I signed the contract in Portuguese but my lawyer had translated it for me."

The Greenes believe that buying a new build may have made the process easier, with no survey to carry out nor any outstanding debts on the property. "The main problem with buying and selling in Portugal I think is the cost of employing an estate agent. The vendor pays this cost though realistically it is often included in the sale price. At between 5% and 7% it is a great deal more expensive than in the UK though it is negotiable," says Tony. "They claim it is because they are more legally exposed and that they do more for their money but it is a substantial amount."

The Greenes have also had to learn more about Portuguese law. "Recent changes to Capital Gains Tax in Portugal mean that you can no longer offset legal fees, estate agent fees or the costs of buying furniture and improving your house against any profit you make on the property," says Tony. "This obviously affects many sellers." Capital Gains Tax in Portugal for non-residents such as the Greenes is 25%. There is no inheritance tax on property transferred between direct descendants.

Overall though, the purchase was straightforward and owning a property in Portugal has been a huge success. The Greenes visit their townhouse on average five times a year and they rent it out when they are not there.

"This region has a true Portuguese feel," says Gail. "The cost of living here is reasonable. Our family of five can eat at a wonderful fish restaurant for around £35 in total."

The final piece of good luck is the announcement of plans to develop Ota airport, 50 km north of Lisbon and within half an hour of the Silver Coast. While completion may still be at least eight years away, this can only be good news for the future of the region.

April 2007.

Cathy Hawker is a freelance property writer who contributes regularly to The Evening Standard and BBC Good Homes Magazine.

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