Interview performed by Anna Koval with
Kelly Swanson, Realtor & Broker:
Algarve Team Leader & Luxury Real Estate Advisor
Certified International Property Specialist
Resort & Second Home Property Specialist
Accredited Buyer Representative
Graduate of the Realtor Institute
Member National Association of Realtors
Former Secretary General of the World Council of Brokers, FIABCI, The International Real Estate Federation
A.: Kelly, I think we know each other six or seven years, we met during various real estate events worldwide, it’s a long story, but I remember you as a realtor from Hawaii and I was even jealous that you lived in a such beautiful place and I was wonder when you moved to Portugal and started to make your career there. Why did it happen? Why Portugal?
K.: Yes this is a question that I am asked very often. Hawaii is a beautiful place. I absolutely still love it there, but for me living on an island had its advantages and disadvantages. I really wanted to find a place that I have more opportunities around that I could meet more people from more cultures and that was a great Gateway into the rest of Europe. As Anna you mentioned we've met in many countries around the world so far and living in Hawaii I was a five hour flight to California now living in Portugal I'm just a quick fight to most everywhere. So Portugal offers a lot of really just comfortable living as one who has traveled to almost 70 countries I have really found a lot of appealing things here in Portugal the culture the people are very warm and welcoming there are people from all backgrounds all countries it's just a big Melting Pot of so many people and very safe here so as a woman I'm walking anywhere any time of night not that I walk around at night that often but it's very safe I always feel comfortable in my life here.
The government here is stable, we have great health care both private and public and there are tax benefits. Tax benefits are very important to investors - once you become a resident here you can apply for the non-habitual resident status which offers either tax free or 10 percent tax, 20 percent tax on worldwide income and this of course can vary based from what country you're coming from whether or not there's a reciprocity agreement in place, but for many people coming from the UK from northern Europe from Ireland, they take advantage of the non-habitual resident status and this offers them a very great tax benefit. The weather is fantastic and there's so much to see here with nature, culture, history and arts.
Portugal has one of the highest English proficiency levels of countries in Europe, so for the most part in major metropolitan areas and in tourist areas English is commonly spoken.
A.: I know in the USA you need to have a license to become a real estate broker. Also I know you as a certified International Property Specialist with many other achievements. What are the requirements to become a real estate broker in Portugal?
К.: Well first of all before making the move here to Portugal I started following the market here early in 2020. I was following the market for about two years, really doing a lot of research before I made the move here and felt comfortable selling real estate in this country.
Now the licensing here has changed over the past decade or so. It used to be that individuals needed to be licensed. But now you need to work for a licensed brokerage. And our regulatory body that governs licensing it's called IMPIC, they're very strict with their regulations but the company must be licensed under IMPIC and then you are trained by the company to work under that license. In order to open a company here in Portugal you need to be a Portuguese resident.
A.: You lead a big team of real estate professionals in Portugal, can you tell us more about your company?
К.: I started selling real estate here last year with Coldwell Banker and then on February 7th of this year a group of about eight of us launched the agency and now we are 60 agents in just this short period of time. And we thought in the first couple of months maybe we would have about 200 million in listings, but now we're over 3 billion in product, so we have a lot of great opportunities here. Our agents are coming from all over. I'm actually the only American in the company but there's a few more joining us, but our agents are from Ukraine, Ireland, England, and we have several Brazilians. I think about 20 different nationalities now they'll jump all over, so we're a good mix of people speaking a lot of different languages and are able to cater to most clients' needs.
A.: So you represent a really huge and reliable company.
К.: Yes it's a company that was founded in California by Marcia Wilmanski, he is well known for selling the Playboy Mansion several years ago and well known and respected in the real estate industry. The company has won several International Awards and we're expanding outside of just the US into Europe now in several markets and Canada and some other countries, so we're a known brand and we pride ourselves on servicing our clients with a white glove service from start to finish everything in between. However we can be of help with our clients in their transition, we are happy to do so.
A.: What place do you live and do business?
К.: I live in the Algarve region in the southern part of Portugal near Quinta do Lago, Vale do Lobo and Vilamoura which are known as The Golden Triangle of Portugal. It's where we have a very beautiful landscape right on the Ria Formosa nature reserve, and we have about 30 golf courses here in the Algarve. There are a lot of people who come here for recreation for vacation and then many of us like me who live here and have made this their home. We enjoy about 300 days of sun per year. It stays nice and warm but not too hot here most of the Year and no snow. After living in Alaska and living in Russia no more snow for me.
Our company work the entire country all throughout Portugal and if we don't have a direct agent in a certain place maybe in the countryside, we partner with other agencies so that we are able to cover the entire country, so we have um quite a lot of projects and developments in Lisbon portal areas as of course those are very popular. But now things are moving into Porto which is along the west coast and then here in the Algarve we have a lot of opportunities here.
A.: What other cities in Portugal offer good investment opportunities?
К.: Well as I mentioned Lisbon and Porto are of course the most well-known areas of Portugal and they are very popular for investment as we have a lot of people coming for vacation wanting vacation properties. And we have people coming to live and those are still the most popular places where people come to live and purchase their properties. So in these areas we have several projects that offer some returns. But down here in the Algarve we have quite a lot of properties that offer guaranteed returns to investors in tourist projects and Portugal is working to attract more arts programs, more film industry programs and a lot of these things are centered in The Algarve and in living is also.
The Lisbon area is where you find Cascais - is a very popular area for investment now as well, so the film industry has really been focusing there and down here in Algarve. So wherever the film industry is going is where a lot of investment opportunities have been located. A lot of the projects that offer returns offer something between three to five percent guaranteed returns, some offer buyback programs after a few years of investment usually about five, four or five, so there's definitely some interesting opportunities here.
A.: As I understand that you work with not just residential but also commercial, maybe industrial property? What kind of property do you mostly deal with?
К.: We have several Hotel developments and major developments, as well as like development I'm working with right now. It's about 300 acres with several hotels, shops, restaurants, villas, a whole entire city within the development itself. So a lot of what we are doing is with hotels but there are other opportunities just for office spaces. Office spaces are changing these days with the Internet becoming where we live and hospitals are expanding infrastructure throughout the country is expanding, so there are always more commercial opportunities to strengthen the infrastructure here.
A.: What amount of money do buyers need to become a real estate investor in Portugal?
К.: The minimum investment would be around 280 000 Euros but most investment opportunities are around 500 000 that offer guaranteed returns. With the Golden visas there are several projects that start at 280 000 Euros with guaranteed returns, and 350 000 Euros, but it really varies throughout the country, generally most opportunities are around that 500 000.
A.: Tell us more about the Golden Visa program. What are the other benefits investors will have buying property in Portugal?
К.: First, property buyer will obtain residency by investment and that's starting at 280 000 Euros. There have been several changes over the last few years to the program. It used to be that if you invested 500 000 Euros into a residential or commercial property that you could get a Golden Visa anywhere. However last year in January of 2022 that changed in a geographic way, so instead of being able to purchase in more dense areas such as Lisbon, Porto and most of the Algarve, now you were really only able to purchase in more rural areas in an effort to build population and to build infrastructure in those spaces.
So there are a lot of exceptions, but as a general rule if someone wanted to just purchase a residential property in order to get a visa then the interior of Portugal is where most of those opportunities lie. However with several of the investment opportunities those can still be in the major metropolitan areas. We have quite a lot of them here in the Algarve and several within the living and Porto areas. What happens with the 280 000 Euro investment level is most often this needs to be a historic renovation project where someone will dig an old Palace or a Convent or some structure and put together a proposal to renovate the property most often into hotel rooms, and then investors each become essentially shareholders in the project project so you have maybe 90 investors each putting in 280 000 Euros and that and as a whole creates the difference for renovating the property. Now once the property becomes an operational hotel that's where those Guaranteed Rate Returns come from and several of the programs then offer a buyback, because after you have received your residency then after five years you're able to apply for citizenship. Once you've received citizenship maybe you don't need this investment anymore so these programs have offered Buy-Back opportunities so that you can take the money and move it elsewhere to maybe a residence or another investment but different properties have different programs for that.
The types of residency that we have here: the most common are the type D visas and these are visas that are not tied to purchasing real estate however they do have a requirement for either having a one-year lease or owning property here and then of course the Golden Visa. So most recently we've had the digital Nomad Visa approved last summer and this is a bit of a simpler process than the rest of the types of visas.
For obtaining a Visa you'll need the fiscal representation, as I discussed before, the Portuguese bank account, proof of accommodation either a registered lease agreement or owning real estate, you need to prove means of subsistence via bank statements, dividends, proving income. The government just wants to make sure that you have the funds to support yourself if you move to Portugal. For more information the government has a great website about Visa requirements - https://vistos.mne.gov.pt/en
After your Visa approval you'll receive a residency visa for four months and during this time then you'll need to have an appointment with the border and Immigration Services called SEF, where a residency permit is then issued. The residency permit no matter what type of Visa is no more than two years, however you can renew these every two years. After you've held your residency for five years, the residency holder may then apply for Portuguese citizenship so this entitles you to a passport and all the other entitlements of citizenship. At any stage you can apply for family reunification, so adding dependent children, possibly parents and of course spouse to your residency.
Golden Visa residency through real estate investment. This program is definitely changing it has been discussed over the past several months the Prime Minister made an announcement in February that there would be changes to this program and now these are up for a vote. However we don't think that these changes will be implemented until mid-september at the earliest, so for now everything is still the same and we'll discuss this a little further. So a golden Visa eligible property as I've already talked about is within low density areas most commonly or approved touristic developments like those historic renovation properties that I discussed and approved commercial real estate purchases most commonly around 500 000 Euros.
The purchase process is rather simple. You need a fiscal number and fiscal representation, so usually if you have a friend or family member who is a citizen here in Portugal, they can help you obtain a fiscal number, this is like a social security number, tax ID number, like many most every other country has, it's very simple process and quite quick. You also will need a bank account in Portugal. Know your client form (validity of funds statement) - this deals with money laundering, the documentation for the property, the promissory note and deposit.
A deposit for a transaction can come from a bank outside of Portugal, but the remainder of the funds need to come from a bank account inside Portugal. Foreigners May obtain a mortgage here, it's a relatively simple process, very similar to the process we have in the United States, a review of documentation and sources of income and it's very quick to get a mortgage.
Obtaining a fiscal number takes two to four business days, usually. Opening a bank account - it's a little slower process now, that so many people from outside of Portugal have been wanting to obtain a bank account, so it takes about six to ten weeks right now. The promissory note takes about two to four business days, it's prepared by a lawyer. And the mortgage approval takes about 48 hours, but the issuance of the mortgage generally takes about 20 to 30 days depending on the documentation for the property. Deed signing can be anywhere from 14 days to a few years if it's a project that is still under construction, it just depends on the property, but typically a property that is ready to move in will take two to three months for a deed signing.
I'll show a quick video about a property we have down here in the Algarve but golden Visa eligible. The project is very beautiful, currently the units available are starting at 680 000 and they're offering four to five percent returns.
So that's just one of the many projects that we have available here in Portugal. This is a really beautiful project that is under construction. The golf course is now open as well as the clubhouse. The first phase of development should be ready by Spring and then there are two other phases of development that will be going on for the next several years. It's really an incredible offering and the value for the properties is unreal especially offering this 4-5% returns. So these units at the moment are starting from about 680 000 and going up to about two and a half million.
We have many other projects here in Portugal and we'll be happy to share information with any of your clients.
A.: Kelly, at the end lets discuss the risks when you buy property in Portugal?
К.: Certainly the documentation here is incredibly important and if someone just tells you that everything is okay is not the same as the documents actually being reviewed by qualified professionals. Because there are countless stories of people who have bought property and didn't use the correct professionals and then have found maybe they don't own what they thought they did. Or someone else has a claim to the property so they can lose everything they've invested without going through their channels.
It's very important that you get properly reviewed property certified and make sure that the process is correct especially when it comes to purchasing properties with the intent of obtaining a Visa.
That documentation is very strict and if it's not correct then you will just lose the money, even be invested, and have to start over or maybe completely.
So it's very important to pick quality professionals and not everyone is in any market. Not everyone is as reliable as others so it's very important to work with people who have your best interests in mind. I have always been more likely to knock someone out of purchasing a property then talk them into it. It's a big deal to make an investment especially in another country that you don't know. So we very much respect that decision and do our best to ensure everything is correct and that you are safe in your purchase. Yes that's true you're never protected 100% in such countries like Portugal or in Europe never and anywhere.
To get more information about investment property in Portugal, contact Anna: +380988660000 (WhatsApp)