Letting property in Portugal can be a good way to make use of a holiday home or to earn money from an investment property in a popular coastal area.
You will need a rental license to let property in Portugal and the property will have to meet some basic requirements for safety and habitability. The property may need to be inspected before the license is granted and you will also need to provide copies of the title deeds, gas and electricity inspection certificates and other important documents.
You will also need to sign a contract with your tenant, which will specify terms such as the length of the lease and how much notice you require from your tenant. The law in Portugal tends to favour the tenant’s rights, so it is important to know exactly what the contract says before you sign. You should also know your rights, including when you are allowed to ask a tenant to leave and when you can increase the rent.
If you are earning money from a rental property in Portugal, you will need to complete an annual tax return, even if you are a non-resident.
Property Letting Process in Portugal
The rental process in Portugal simply requires a contract between you and the tenant. This is called the Contrato de Arrendamento. Once you have your rental license, you can start looking for a tenant. It is best to use an estate agency to market the property, particularly if you aren’t in the country. Winkworth International can help you to find the right tenant and ensure that you meet all the necessary legal requirements. You can also use an agency to manage Portugal rental properties on your behalf.
Costs of Letting Rental Properties in Portugal
You will be required to pay property tax of 0.8-1.3% on your rental property as well as income tax on your earnings. If you are a Portuguese taxpayer, you will pay 12- 40% income tax. If you are a non-resident,you will pay 25%. Portugal doesnt allow deductions for interest on your mortgage, but you can claim for repairs and maintenance on rental properties. Additional costs may include insurance, maintenance, cleaning and management fees.
Tips for Letting Your Property in Portugal
Given the relatively low property costs in Portugal, it is more common for people to buy homes than to rent them. The right location, however, can make your Portuguese rental apartment or villa very attractive. Holiday lets in the Algarve and other coastal regions can be very busy in the summer months, while longer term lets in cities like Lisbon are also in demand. Smaller apartments are usually most profitable in Portugal, particularly in Lisbon where rents are relatively high compared to the price of buying.
Having the right property can make a big difference, but effective marketing by your estate agent can also be important. It is also a good idea to consider letting an agency manage the property for you, particularly if you are out of the country or you are not fluent in Portuguese.
Winkworth International has a comprehensive portfolio of quality Portuguese properties to let. Contact us if you would like assistance in letting your property in Portugal.
If you are considering Letting a property in Portugal or you would like further information on the process, please contact us. We would be pleased to answer your questions and assist you in letting your Portuguese home.