# purchasing property registered offshore



## Frantel (May 18, 2013)

My wife and planning to move to the Algarve in June, with the intention of buying a small villa. The property we are interested in, is registered offshore. Do you have any advice for someone who is purchasing a property in the Algarve, which is registered to an offshore company in Medeiros ?? Please provide any and all info regarding purchasing property in Portugal and/or via off shore corporate owner. Thanks


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## canoeman (Mar 3, 2011)

As I said on your other post, it's really not the way that has *any real benefits anymore*, especially for a *Resident* the major benefits where/are for *Non Residents*

Big difference between black & white "offshore" companies, black attracts even more punitive tax and costs, nor do some of previous benefits apply *especially* to a Resident.

It's not as if there's a shortage of property to buy, take advantage of being a buyer with presumably the cash so you can negotiate a favorable price, but don't be tempted to do any under the counter deals to save some IMT & IS at some point it comes back to haunt you


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## MrBife (Jul 26, 2009)

And if you are offered an offshore registered property you can always transfer it back into direct personal ownership as you make the purchase. You will have to pay IMT but from that point it will be onshore again. The previous owners will have a bit of a tax nightmare to resolve but if they are keen to sell they will just have to cope with that.

As always, make sure you have ALL the correct documents for the property and that the description of the house on the paperwork matches the reality. 

+ never trust advice from someone with a vested interest in providing it !


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## Frantel (May 18, 2013)

B]Thanks to both of you for this very sound advice![/B] We have been looking at places for approx 1 year and the property we are most interested is owned offshore, the controlling shareholder is a Non-National, Non- EU individual, but European. From what u hv said, his nationality may have justified an offshore corporate ownership. Our agent keeps insisting the offshore ownership is an advantageous buying point for us. She is telling us we do not need to pay land transfer tax, instead we will buy the shares of the offshore company, who only asset is the property. It smells a bit like a "Sardine" to me and I am not sure I can trust her salesmanship, but have not be able to check the closing procedures for Portugal.
We will purchasing in the Lagos area. Can anyone recommend an English speaking, competent and trustworthy lawyer ??? Can anyone recommend an agent with these same qualities???
Your help has been greatly appreciated.


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## Frantel (May 18, 2013)

*purchasing a property owned by offshore entity*

B]Thanks to both of you for this very sound advice![/B] We have been looking at places for approx 1 year and the property we are most interested is owned offshore, the controlling shareholder is a Non-National, Non- EU individual, but European. From what u hv said, his nationality may have justified an offshore corporate ownership. Our agent keeps insisting the offshore ownership is an advantageous buying point, eliminating the need to pay land transfer tax. She has said we will buy the shares of the offshore company, who's only asset is the property. It smells a bit like a "Sardine" to me and not sure I can trust her salesmanship, but have not be able to check the closing procedures for Portugal.
We will purchasing in the Lagos area. Can anyone recommend an English speaking, competent and trustworthy lawyer ??? Can anyone recommend an agent with these same qualities???
Your help has been greatly appreciated.


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## robc (Jul 17, 2008)

Offshore purchase..................simple..........................don´t. 

If your agent continues with this nonsense then I would be very surprised if there was not another agent with the property on their books.


Have a search, if you find it then result.

The paperwork involved in unravelling an offshore property is not monstrous but the time taken may well be. We were offered one when we were looking and after looking at we ran away !!!!!

HTH

Rob


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## Frantel (May 18, 2013)

This may well answer why the property has sat unsold for over 12 months!!! And the selling price keeps dropping! Thanks for this advice Rob!!


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## canoeman (Mar 3, 2011)

won't be the only one unsold for 12+ months and price dropping it's a buyers market


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## Frantel (May 18, 2013)

Has it reached bottom? Where do you think the market is at this point? I have been following it best I can and keep noticing many sellers continuing to reduce their asking price.


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## canoeman (Mar 3, 2011)

Who knows, part is picking the properties that owner must sell puts you in a stronger position for negotiation, all the banks have properties on their books to sell


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## robc (Jul 17, 2008)

Frantel said:


> Has it reached bottom? Where do you think the market is at this point? I have been following it best I can and keep noticing many sellers continuing to reduce their asking price.


Looking around here, some properties are fetching 90% or so of asking prices, others are just not selling, come what may.

The price achieved may well bear no resemblence to the asking price, there are some villas on the golf complexes near here that were €1 million plus in 2008 now fetching maybe half that.

Others will hang out for the asking price...........there appears no rhyme nor reason.

Sorry cannot be more helpful.

Rob


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## oronero (Aug 24, 2012)

robc said:


> Others will hang out for the asking price...........*there appears no rhyme nor reason.*
> 
> 
> 
> Rob


Contrary to your statement, one reason for some properties not having their asking price lowered is that they do not have to be sold, they might be second-homes.

It can be that the person has enough wealth to keep the property but is hoping to snare a good price for it or that it may be part of an inheritance with a multitude of beneficiaries. Splitting the sale price between a number would make the sale of no great financial gain to the individuals , so they hold out for a good price and a worthwhile bonus for each beneficiary.


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## robc (Jul 17, 2008)

oronero said:


> Contrary to your statement, one reason for some properties not having their asking price lowered is that they do not have to be sold, they might be second-homes.
> 
> It can be that the person has enough wealth to keep the property but is hoping to snare a good price for it or that it may be part of an inheritance with a multitude of beneficiaries. Splitting the sale price between a number would make the sale of no great financial gain to the individuals , so they hold out for a good price and a worthwhile bonus for each beneficiary.


True...................and then one can watch the house/property degrade over the years losing value all the time.........................at the risk of hijacking the topic this can be seen with such things as motor cars too. 

Never understood this attitude and guess never will.

Rob


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## canoeman (Mar 3, 2011)

One thing a *Portuguese Resident* should be aware of should the holding company be registered in Maderia which I believe the property Frantel refers to is

" Death Duties: No death duties are payable in Madeira on the transfer of a shareholding in a company licensed to operate under the Free Trade Zone Legislation unless the shareholder was resident in Portugal."

So more important to bring back into regular ownership where no inheritance tax or IS would apply to spouse, parent or children.

The other factor multiple owners of Portuguese properties have to consider in a sale is CGT, if inherited post 89, as these properties where generally low VPN could have an impact on a sale,


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## Frantel (May 18, 2013)

*Purchasing a property registerd in Maderia*

After having interest in the property for almost 12 months we have decided to walk away from it, the vendor and agent. We had hoped this home would be the right home for us, but felt pressured by the vendor and agent, who made everything sound too easy. They insisted that we would be buying the offshore company who's only asset is the property and would avoid paying property tax. We have since been informed, this is not at all how it works and what they were proposing, is probably illegal. Too bad, we really had grown fond of the possibility of owning this perspective abode but the controversy has soured our enthusiasm and we will start a fresh property search.

*Can any recomennd an honest agent who works Algarve? Thanks for the input from all of the contributing members. It has been of great assistance.
*


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## robc (Jul 17, 2008)

Frantel said:


> *Can any recomennd an honest agent who works Algarve? Thanks for the input from all of the contributing members. It has been of great assistance.
> *


I do not know of such an Agent as we are not in the Algarve, what I do know though is a very straight, honest Agent here who may be able to recommend one of his Associates who he works with in the Algarve.

PM me if interested.

Rob


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## MrBife (Jul 26, 2009)

Frantel said:


> After having interest in the property for almost 12 months we have decided to walk away from it, the vendor and agent. We had hoped this home would be the right home for us, but felt pressured by the vendor and agent, who made everything sound too easy. They insisted that we would be buying the offshore company who's only asset is the property and would avoid paying property tax. We have since been informed, this is not at all how it works and what they were proposing, is probably illegal. Too bad, we really had grown fond of the possibility of owning this perspective abode but the controversy has soured our enthusiasm and we will start a fresh property search.


Well for the main part they are quite right and not proposing anything illegal ! Indeed you do not need to pay IMT (the property transfer tax) to put it into your name and the transaction really is very easy. HOWEVER the downside is you will pay significantly each year for your financial services provider, you will pay more IMI (standard annual rates).

You ALWAYS have the choice of buying an offshore property and moving it into your own name at the time of purchase but it is up to the original owner if they will allow you to do that as it makes them liable for capital gains tax - the value of that depends on how long they have owned and the increase in value.

If you love the house make an offer and tell them you want to buy privately and move it onshore - they may accept you doing that.


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## canoeman (Mar 3, 2011)

I agree with Mr Bife, as you intend being a Portuguese Resident you certainly don't want it as an offshore "owned property" its down to price being right and if vendor will play ball


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