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The Second Home Market in Portugal

• The total number of second homes in Southern Europe in 2011 ... 13.7 million. • The total number of these properties owned by foreigners ... 2.6 million (19%). • Portugal has 5,877,000 houses for a population of 10.5 million people (56%). • Portugal has 1,133,000 second homes ... 19% of the total housing stock. • This percentage is similar to Spain, which has 5 million second homes.

• Portugal has 145,000 second homes owned by foreigners, representing a 6 % market share ... while Spain has approximately 1.3 million (51%) and France and Italy both have approximately 500,000 or 19% each.

• On the last decade, Spain achieved an 81% market share from foreign investors, while Portugal, Italy and France won 5% to 6% each of the market spend.

• On the last decade, Portugal sold an average of 5,000 houses per year to foreign prop- erty buyers ... Spain sold 82,000 per year.

The goal for Portugal is to sell, over the next decade, 11,600 new houses per year (representing a 10% Southern European Market Share) to foreign buyers. This will generate a total average revenue per annum of €1.7 billion.


said, “have been complacency and a lack of professionalism: and this has to change.”

Campaign to give Portugal a trustworthy image, he argued, and let’s work hard to provide new fi scal incentives to attractors investors and

“Complacency and a lack of professionalism have held Portugal back: this has to change”

residents to the country. He also called for the country to come together and promote its many positive assets via a proper, long-term professional marketing campaign. “We need an aggressive fi scal policy and we really must concentrate hard on quality second homes over the next ten years” he said.

“I believe Portugal will occupy a more important role in the second home

The Portuguese Government should:

Understand that the Second Home Market can be Portugal’s biggest export earner; Understand how important this programme is to the country; Improve the image of the country (defi cit, interest rates, government road shows); Create new fi scal laws (clear, stable, and attractive); Give IRS Exemption to retired EU citizens who become a Portuguese resident; Reduce IRS payments for new European citizens who become a Portuguese resident; Facilitate visas for Eastern European citizens when property is acquired; Reduce the IMT from 6,5% to 3% (Spain has a 3,5% IMT), for new property acquisitions; Give fi scal exemption to off shore companies that own a property and become ‘in-shore’ over a 12-month period; Get involved in property promotion through their embassies, ambassadors and international commerce delegations (AICEP); Allocate European Funds to this programme (QREN).

Who are the buyers and where do they come from? 45 sq.m |MAY 2012

property market in the coming decade. My projections show that Portugal’s market share will improve by 10%. Our goal is to sell some 11,600 new houses per year to the overseas market, which will bring in an annual revenue of around €1.7 billion”. William Cunningham, a former tax partner with Arthur Andersen and KPMG in Lisbon, picked up another theme: too much bureaucracy. Talking the delegates through Portugal’s Non- Habitual Resident Regime, introduced in September 2009, he explained that the scheme should have allowed newly arrived individuals to enjoy several tax benefi ts. However, the system has been badly operated with too much bureaucracy. It has not been of any real help, until now. He also called for the Government to avoid sending confl icting tax messages to investors and tourists. “Its tax policies need to be aligned with others to avoid cancelling out other favourable initiatives” he said. Charles Weston Baker, director of International Residential at Savills, discussed how Portugal compares with other overseas property markets in 2012, concluding that the property sector in Portugal was largely unchanged, with the top and bottom of the market being most active, and the middle still stuck in the doldrums. He showed that Portugal has maintained its market share with roughly the same number of UK overseas holiday home buyers investing in the country before and since the crisis.

“Direct fl ights are absolutely crucial and low-cost carriers can uplift the view of the country”

He also came up with the fascinating statistic that people like to buy second homes which are “half the price of their main home,” and pointed out that at least 60% of buyers are looking for a home that is within an hour of an airport, to which they can fl y directly. “Direct fl ights are crucial” Weston

Baker said. “Low cost fl ights have lifted British people’s view of Portugal and have had a big impact on Lisbon, which is now perceived as a good place to go for the weekend”.

Source: Savills

He concluded that Portugal has held up well in price terms compared

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