Olhão - Faro

Living in Algarve

ORPI OLHÃO-FARO

As of January 2015, a survey conducted by the "Opinion Way" website shows that French people over 50 who wish to spend their retirement abroad place Portugal at the top of the desired destinations.

The Chamber of Commerce and Industry Franco-Portuguese had planned the installation of 20 000 foreigners in Portugal in 2015. It anticipated the same number of installation for 2016, but only for the French & nbsp;!

This craze is still relevant ...

We choose to live in the Algarve for its quality of life and serenity.

But its assets are numerous:

  • The kindness and the welcome of the Portuguese
  • Its climate (300 days of sunshine a year)
  • His Latin culture, close to ours
  • Its tranquility (ranked 5th safest country out of 163)
  • Belonging to Europe (€ uro zone)
  • Its real estate market cheaper than in France
  • Its purchasing power (the cost of living is 30% lower than in France)
  • Its tax advantages (possibility of total exemption from French income tax, no wealth tax, no inheritance tax)
  • Its air links between Faro and many French cities, at very attractive rates! & nbsp;!
  • The beaches and cliffs of the Algarve, reputed among the most beautiful
  • The atmosphere of its historic fishing villages
  • Its water activities and, of course, golf (among the best golf destinations in the world)

Where to buy?

The acquisition of a house or villa is not exclusively related to its architecture, its services and its interior design. Yet the Algarve offers architectures for all tastes, from pure traditional to ultra-modern.

The place of acquisition is determined by the aspirations of customers, their lifestyle, their activities, the desired proximity of the airport, the seaside, etc ...

The Algarve has its secrets, its little corners of paradise. Every city, every village has its soul. It is important to be good in your home, but also (and above all) well in your environment. By environment we mean not only the geographical environment, but also the human environment.

Foreigners have invested heavily in the Algarve (and also invested the Algarve). The proximity of a French community can be reassuring for some and avoid for others.

Some people will seek to find the atmosphere of a seaside coast, its lifestyle, its golf courses. They will find it without difficulty.

Others will seek immersion in the traditional Algarve and integration with the Portuguese people. They will find it without problem.

Still others will seek the isolated paradise of the world in the midst of nature. The Algarve is also for them.

If one schematizes (all the stereotypes having their limit), Faro constitutes a hinge between the coast to the West, more seaside and the coast to the East, more traditional.


The hinterland offers, without too far from the coast, more isolated sites, closer to nature, on the heights, sometimes with exceptional sea views.

Everyone will find his little piece of paradise...

Tax system

RNH Status & Tax Exemption

Initially, the non-habitual resident status (RNH) was created in Portugal in 2009 to attract people with a high value-added activity by granting them tax advantages (exemption on income received in the country of origin ).

In addition, a tax treaty signed between Portugal and France provides that the source country can not tax the income of tax residents living in Portugal.

Thus, this leads to double taxation.

Since 2013, the status of RNH has been much talked about, because it was diverted from its original purpose and extended through an interpretation (mainly conveyed by all players in real estate in Portugal and some media) to all retirees (including those who do not work).

The result is that mainly unemployed retirees (80%) who came to settle in Portugal.

Portugal has become the new "tax haven" for French retirees. In fact, private sector pensions are exempt from income tax, provided that they stay in Portugal for more than 183 days a year and acquire the status of "Non-Habitual Resident & nbsp;". This preferential scheme, provided for a period of 10 years, applies only to retirees in the private sector. The pensions of former civil servants remain taxed in France.

However, it is important to know that beyond ten years, the status of Portuguese resident may prove to be more penalizing, because the Portuguese tax authorities are more greedy than their French counterpart for high income (45% tax for higher incomes). at 40 000 €, 48% for more than 80 000 €). We therefore recommend that you make a financial projection, depending on your situation.
Portugal has other tax advantages: no wealth tax (ISF) and inheritance tax (for resident heirs also in Portugal).

In summary, the financial incentive for retirees has several advantages:

  • The tax exemption on the amount of the pension,
  • Exemption from the payment of social security contributions (approximately 8%, pursuant to a decision of the European Court of Justice of 26 February 2015),
  • The absence of ISF,
  • The absence of inheritance tax (under certain conditions),
  • And ... a cheaper life. A benefit that a retiree sums up as follows: "When you receive your pension, you lose about 30% of your purchasing power, but it is canceled when you get here, since life is a third better market".

But, beyond these financial considerations, the Algarve remains above all a choice of life, and a choice of heart!

Real Estate Taxes

Taxes and legal fees are charged on the purchase price of the property. They are the responsibility of the purchaser. The same goes for the payment of the registration of the property and notary fees.

IMT (Property Tax on Onerous Real Estate Transmissions)

This tax is paid during a real estate purchase.

Slices Taxe rate Value to deduce
Up to 92 407 € 0% 0 €
92 407 € to 126 403 € 2% 1 848 €
126 403 € to 172 348 € 5% 5 640 €
172 348 € to 287 213 € 7% 9 087 €
287 213 € to 574 323 € 8% 11 959 €
More then 574 323 € 6% 0 €
For a main residence (*)

Example for an acquisition at 200 000 € :
(Acquisition value x Tax rate - Slice to be slaughtered)
200 000 € x 7% - 9 087 € = IMT = 4 913 €

Slices Taxe rate Value to deduce
Up to 92 407 € 1% 0 €
92 407 € to 126 403 € 2% 924,07 €
126 403 € to 172 348 € 5% 4 716,16 €
172 348 € to 287 213 € 7% 8 163,12 €
287 213 € to 574 323 € 8% 11 035,25 €
More then 574 323 € 6% 0 €
For a secondary residence (*)

For commercial premises (*) : single rate of 6.5%


Stamp duty (imposto de Selo)

This 0.8% tax is paid upon the acquisition of real estate.

This tax has a heterogeneous field of incidence, including all acts, contracts, documents, books, and other facts provided for in the general stamp duty table.

Register the property

After the deed of sale, it will be necessary to carry out a procedure for the definitive conversion of the provisional registers.

  • Registry cost (estimated): from € 150 to € 300.
  • Cost (estimated) of notary fees: from 200 to 500 €.

Property tax: IMI (property tax of municipalities)

Following the acquisition of property, the payment of the property tax is due annually.

The IMI is calculated on the Tributary Patrimonial Value (VPT) of rural and urban properties located on Portuguese territory. This heritage value is generally lower than the purchase price.

The tax rate for recently awarded Patrimonial values ​​varies between 0.3% and 0.8%. Mayors determine annually their rate between this range.

There are also opportunities for some benefits (such as urban rehabilitation) that need to be considered on a case-by-case basis.

Annual stamp duty (Imposto do Selo)

This tax only applies to real estate with a heritage value greater than or equal to € 1,000,000. Its rate is: 1% per year on residential buildings.

Register the property

After the deed of sale, it will be necessary to carry out a procedure for the definitive conversion of the provisional registers.

  • Registry cost (estimated): from € 150 to € 300.
  • Cost (estimated) of notary fees: from 200 to 500 €.

Property tax: IMI (property tax of municipalities)

Following the acquisition of property, the payment of the property tax is due annually.

The IMI is calculated on the Tributary Patrimonial Value (VPT) of rural and urban properties located on Portuguese territory. This heritage value is generally lower than the purchase price.

The tax rate for recently awarded Patrimonial values ​​varies between 0.3% and 0.8%. Mayors determine annually their rate between this range.

There are also opportunities for some benefits (such as urban rehabilitation) that need to be considered on a case-by-case basis.

Annual stamp duty (Imposto do Selo)

This tax only applies to real estate with a heritage value greater than or equal to € 1,000,000. Its rate is: 1% per year on residential buildings.

Taxes on rental income

If you rent your property, the income will be subject to income tax at the fixed rate of 28% on the annual yield if the income is collected by a natural person or 25% if it is perceived from a person with an organized accounting. In both cases, maintenance, handling and property taxes can be deducted from income for tax purposes.

Taxes on real estate gains

When reselling your property, you will have to pay a capital gain tax.

A fixed tax rate of 25% applies on the basis of 50% of the capital gain generated (ie 12.5% ​​on the totality of the gain).

Health

Portugal ranked 12th in the list of best health systems according to the latest WHO survey.

The Portuguese health system remains very close to the French system, with its two components: the private and the public.

The public offers good quality care and support, but it requires waiting times that can vary depending on the severity and priority of your condition. Thus many people opt for private consultations, with additional health insurance.

The French pensioners in Portugal can nevertheless continue to enjoy their rights in France (ranked the best health system in the world by the WHO).

Procedures to be carried out with the health system, during an installation in Portugal (source Ameli, retirement section in Europe):

  • Go to the health fund before departure, inform the health insurance fund of the new address and request a form E121 / S1.
  • Once in Portugal, go to the loja do cidadão (citizen's shop) or Segurança Social to apply for registration (cartao de utente do Sistema Nacional de Saúde).

Once these steps have been taken, the pensioner will have a health card that will allow him to be treated in Portugal. He will be attached to a health center near his home and will have a doctor in the public.

The costs will be borne by the Portuguese Social Security. The patient will only pay a moderator fee of a very small amount (€ 2.70 a standard consultation).

The retiree may also call a private doctor directly at his own expense. Many complementary health exist if he wishes to subscribe to a mutual.

He will not lose his rights and may, therefore, go to France for treatment.

Government Health Site : https://www.sns.gov.pt/
Searching for a health center or hospital center: https://www.sns.gov.pt/sns/pesquisa-prestadores/

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