# How much are your monthly/yearly costs for the apartment you own ?



## 50cent (May 3, 2017)

Hello,

I am a young working man. I am exploring the possibility to buy my own 'place in the sun'.
Portugal is one of the few countries I did narrow my choice down to.
I will use it as a holiday home - I will be roughly 1 to 1.5 months per year there. When I
retire (in about 30 years), I will most probably move there permanently.
My goal is to buy a 3-room (or, as you call it - 2 bedroom) apartment, around 70-85 m2.
What is most important for me - to have the lowest possible cost when I am not there.
Hence, please kindly let me know what are the recurring monthly/yearly costs that you
have to keep paying. I will number the items, in order to aid you in writing your answers:

1) Water and electricity - those should be clear. Costs are according the the readings of
the corresponding meters. Do you have anything else to add ?

2) Condomino (I hope I am calling this right) - what I mean by this, are the regular
maintenance and repair cost for the apartment building and for utilities of the common
space, like the staircase, corridors like electricity for them and keeping the clean, etc.

3) I know that in Portugal, there is a property ownership tax. For the area that I am
looking at, I could find on google, that it's 0.5%. Fine, but 0.5% of what ??? I think 
that I have read, that it's from the cadastral appraisal of the apartment. Is that true ?
And if yes, then how much is the cadastral appraisal ??? Let's say an apartment, that
sells now for 100 000 EUR - will it be like 95 000 EUR or maybe 40 000 EUR ? I am
trying to make at least a rough estimation how much will that property tax cost me!
If it's 0.5% from 100 000, that makes 500 EUR/year, which is A LOT for me. 5% of 40 000
is a completely different figure, something that I could live with.

4) Is there some additional tax, like community tax or whatsoever ?

5) The apartment should also be insured against natural disasters - does any of you
have such an insurance ? How much is it per year ?

6) Are there any additional recurring costs, that I didn't think about ?

7) If one day I would have to sell the apartment - I have read, that in Portugal there
is a Capital Gain Tax (CGT). How is it calculated ? % of the selling price minus the price 
at which I bought it ? Because I encountered a thread on a forum, where some people 
from the UK complained, that they were taxed as a % of the selling price minus the
cadastral appraisal, so they had to pay something like 20 000 EUR, which would be
a catastrophe.

Many many thanks for your answers and advice!


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## siobhanwf (Mar 20, 2009)

It will all very much depend on the area you are intending to live in


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## 50cent (May 3, 2017)

Currently (unless you give me a better tip) I am targeting Faro, because the airport is there and up to my internet research, it seemes to have the least amount of rain coming down.
(while I like warm/hot temperatures, I am paying much more attention to rain, because when it's raining, you basically can't do nothing outside while a few degrees difference don't change a thing).
I was looking at Porto, but seemed very rainy in the winter (150 mm).

Many thanks!


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## advolex (Mar 8, 2015)

I could give some pointers, if it would be of any help. This is for the second largest town in PT, downtown. Flat is smaller than yours, one bedroom only. Costs per month. - BTW, my garage adds to the condominio cost. Cheaper without. A few € only.
1) Electricity 35 € incl. heating, water 15 €
2) Condominio 35 €, incl of Fundo de Reserva 10 %
3) the appraisal is for IMI, and is closer to 40 % of your market value. It's a municipal tax. Under certain requirements you may become exempted for three years.
4) No other tax has come to my attention.
5) Insurance (must cover for fire hazard, a legal requirement), mine covers a bit more and costs around € 5,50.
6) Only cleaning of your own space, unless you take care of it yourself of course. 20 - 50 € depending on frequency and how particular you are.
7) Faro is very nice. Have fun in the Algarve!


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## 50cent (May 3, 2017)

Hello Advolex,

GREAT MANY THANKS !!! A detailed and precise answer, just the way I needed it!
Though I have a few questions, I didn't understand everything you wrote me:

3) 40% is GOOD!!! Do you know how often this (the cadastral appraisal) could be updated ?
5) Those 5.50 EUR - this is per month, I guess, right ?
6) What do you mean exactly ? Of course I will take care of my own place - I meant cleaning the staircase, corridors in the building, through which you walk to get to your apartment, etc...
7) Many thanks. I'm still VERY undetermined. I am checking out 2-3 other countries. Nothing seems to be perfect (or perfectly cheap :-D ) I really need minimum maintenance costs and taxes.


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## 50cent (May 3, 2017)

Hello Advolex,

sorry, we forgot to discuss one more thing:
What about community garbage tax ? One friend told me that it's 4 EUR/month.
In my city it's half. But many of the other things are less. I pay insurance around
30 EUR each 2 years...


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## advolex (Mar 8, 2015)

*No "garbage tax" in Porto*



50cent said:


> Hello Advolex,
> 
> sorry, we forgot to discuss one more thing:
> What about community garbage tax ? One friend told me that it's 4 EUR/month.
> ...


No such thing here. For garbage disposals there are plenty of containers in every major street, mine is 40 m away. It gets emptied every night, after midnight. I think it's financed like the TV-service, you pay for it - 2 - 3 € a month - through your electricity bill, where it's called multimedia charge or something. But I've never seen any reference to a garbage charge anywhere. And those that have a garden use the "free" garbage collection to dispose of their garden litter, openly. - It's probably covered by the IMI municipal tax.


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## advolex (Mar 8, 2015)

*Further clarification 3)*



50cent said:


> 3) 40% is GOOD!!! Do you know how often this (the cadastral appraisal) could be updated ?
> No, I don't know that. But I do know that it has not been updated even once in more than three years. I'm inclined to believe that the Portuguese people wouldn't accept unjustified tax increases, not even on property. - In a previous EU country where I owned a property they abolished the tax on real estate, which was devised similarily as the IMI here. That tax used to be "adjusted" every 7-10 years, according to the projected rise in market value on similar objects. - So, you might hope for a development which goes in another direction than always up, on property for dwelling purposes.


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## advolex (Mar 8, 2015)

*Further clarification 5)*



50cent said:


> 5) Those 5.50 EUR - this is per month, I guess, right ?
> 
> Yes. Every charge or cost that I have mentioned is per month. Also, the figures are approximative (approximations).


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## advolex (Mar 8, 2015)

*Further clarification 6)*



50cent said:


> 6) What do you mean exactly ? Of course I will take care of my own place - I meant cleaning the staircase, corridors in the building, through which you walk to get to your apartment, etc...


I mean: You own your flat in the building, and you take care of it yourself, maybe by hiring someone to do it for you. You also have indirect ownership of the corridors etc that you mention. These joint facilities of the house, elevator etc, are taken care of by housekeeping and the costs for this service are not bourne by any co-owner individually. Instead, they are joint costs which are shared between the co-owners according to each and every flat's registered distribution key (i.e 10 % or 1/10). If it were a lease you would call your contribution "rent". - I have indicated the amount for such "rent" that I pay, per month.


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## advolex (Mar 8, 2015)

*Final obeservation*



50cent said:


> 7) Many thanks. I'm still VERY undetermined. I am checking out 2-3 other countries. Nothing seems to be perfect (or perfectly cheap :-D ) I really need minimum maintenance costs and taxes.


Maybe you can find cheaper living in Albania or so, but I'm pretty sure that you won't find another country than Portugal where you get more value for your buck. At least not in Europe. - But this is another discussion. I'm sure that you'll find a place in PT which fits your bill nicely.


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## 50cent (May 3, 2017)

Many thanks, Advolex! I really appreciate your answers, the info you are providing and your advice!
May I please kindly ask you two more things. I'll number them confirming to my previous posts:

8) You have mentioned something about being relieved for 3 years from the real estate tax. Why 3 ? When I was googling about the real estate tax, I found 2 interesting points:
- If you buy an apartment and do NOT rent it, you are freed from this tax for 8 years, if you bought it for less than 157 000 EUR.
- If your yearly income is less than ca. 15 000 EUR, you can ask to be excempted from that tax. I think also, the cadastral value of the apartment should be less than a little over 65 000 EUR (which probably shouldn't be impossible to achieve).

9) I have read somewhere, that when you move to Portugal, it's mandatory that you will have a tax advisor (or somebody responsible that you'll pay your taxes correctly) for the first one or two years, who is native. Is this really true ? And how much does that service cost ?

Many many thanks in advance!


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## RichardHenshall (Jul 26, 2009)

8. There are no exemptions to IMI available to non-residents.

9. Fiscal Representation is required indefinitely by non-residents unless they are EU nationals resident in the EU.


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## advolex (Mar 8, 2015)

RichardHenshall said:


> 8. There are no exemptions to IMI available to non-residents.
> 
> 9. Fiscal Representation is required indefinitely by non-residents unless they are EU nationals resident in the EU.


8. @RichardHenshall is likely right, I've heard the same. What you're saying, about 8 years and the low income exemption is new to me. This might explain why I haven't yet received any IMI bill, after being exempt for the promised 3 years. Where will the municipalities get their income from now on? From the water bill only? Electricity is privatized and owned by Chinese investors, so my Portuguese neighbors say. Oh, parking in the city is 60 cts an hour, which is cheap, but still I seem to be the only person paying for it.

9. It's my understanding that you are required to engage an auditor if you run a corporation, and that you also are required to have one without a corporation depending on your trade. At any rate I would think it not to be advisable to run your business and solely rely on free advice from this or any other social forum.


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## 50cent (May 3, 2017)

Dear RichardHenshall and Advolex,

many thanks for going into so much details for me.
I am a EU citizen, so according to what you wrote, I won't need fiscal representation.
And I intent to get registered as a resident. In the end, after 6 years, the portuguese
citizenship is waving at me, so I'd probably try to go for it. Not that it would bring me
some huge benefit - IMHO it's just good to be a citizen wherever you own something.
As it's not possible to deny the entry to the country of a citizen (I was curious enough 
to have a short look at the Dubai forum - guys there do have problems with this !!)


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## RichardHenshall (Jul 26, 2009)

50cent said:


> ... I am a EU citizen, so according to what you wrote, I won't need fiscal representation.
> And I intent to get registered as a resident. ...


You began by referring to the property as a holiday home. If it is, you won't be resident at that address if you're only there for "roughly 1 to 1.5 months per year" and you won't be resident in Portugal at all unless you spend the majority of the year in Portugal, at another address. That, of course, makes you liable to Portugal for taxes on your worldwide income.

Since you would appear to fail the usual tests for Portuguese residency you will not be able to obtain Portuguese citizenship through naturalisation. Do you have Portuguese ancestors or a Portuguese spouse?

If you are an EU citizen you have the right to live (etc) in Portugal but you will have to exercise that right and actually live there for six (?) years before you can begin any citizenship application, not just own a property and pretend to live in Portugal.


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## 50cent (May 3, 2017)

Hello and thanks for your comment.
I intent to register as an EU resident, who will be spending more than 30 days per year in Portugal.
With shengen rules, they have no way to prove, that I will be spending there roughly a month
(actually, less than those 90 days).
On the other hand, if anyone would try to "force me" into paying taxes on my world wide
income, I will refer to being employed in my home country and being a tax resident there.
Up to my knowledge - it should work.
Anyway, one of the reasons for choosing Portugal is also that they allow dual citizenship...
As I said, it's not a primary objective, but it's "nice to have" ;-) Thank you!


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## RichardHenshall (Jul 26, 2009)

What makes you think that spending 30 days in Portugal entitles you to register as a Portuguese resident?


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## 50cent (May 3, 2017)

I don't ;-) But I will do it. For EU citizens, it will be OK.
Authorities will rather react to this positively, especially when I own real estate.


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## RichardHenshall (Jul 26, 2009)

50cent said:


> I don't ;-) But I will do it. For EU citizens, it will be OK.
> Authorities will rather react to this positively, especially when I own real estate.


Of course they will. Because you will have a property in Portugal the authorities will be able to recoup unpaid taxes and fines by means of a lien on your property. And once you're a citizen ...

I wish you well in your attempts to turn your dreams into reality.


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