Non-Resident Status in the UK

Hey there – how are you? I am off to an outdoors Blues concert tonight…very brave of me I might add! The last one I attended saw me sitting like a ghostly wraith in the pouring rain, in a waterproof poncho thoughtfully provided by concert hosts. It was most enjoyable but did I ever get the mother and father of all colds! Wish me luck tonight…

A question I am often asked these days by people who are moving abroad is this: exactly when are you considered to be a UK resident, or to turn this question on its head, when are you considered a non-resident? This has become one of the most controversial and worrisome aspects of emigration recently, largely due to the tax implications that accompany it.

Evidently, according to a recent Court of Appeal decision in the long drawn out Gaines Cooper saga, it is no longer enough to conform to the rules as laid down by HM Revenue & Customs. These laid down that, to prove non-residency, you needed only to show that you didn’t spend more than 90 days a year on average in Britain over four years.

Now the taxman is allowed to scrutinise in more detail whether non-residents have made what they consider to be enough of a break from the UK.

So…how do you make sure that you qualify for non-resident status?

In most EU countries an individual is not considered a resident unless 183 days are spent there each year. In the UK, it is 90 days on a rolling four-year average, although you can spend up to 183 days in any given year. Things like visiting offspring or grandchildren in the UK will count toward your 90-day limit. Incidentally there are dispensations if you are visiting someone because of an emergency. If a member of your family is terminally ill for example, you may be able to stay for more than the average 90 days over four years. However, you would not be able to stay for more than 183 days in any given year without risking your status.

But this is no longer the only criterion; continuing connections with the country will now be taken into account, and this can be a very grey area.

Keeping a house or a car in the UK, maintaining membership of a private club, or even regularly attending social events such as Royal Ascot or Wimbledon can now be used against you in terms of proving your non-resident status. Needless to say, this new vigilance has largely been brought about in an effort to check up on those seeking to avoid the new 50% tax rate imposed on the super-rich.

Individuals must prove an intention to leave the UK permanently or indefinitely. Recent Court decisions on residence tend to be in favour of HMRC and there is no doubt that they are actively pursuing cases where, in its view, the taxpayer has not done enough to demonstrate that they have ceased to be UK resident.

What does this mean to you? Well, the bottom line is that you need to sever as many ties with the UK as possible. It is no longer sufficient just to stay abroad for the obligatory period and tally up days spent in the UK. You have to be able to demonstrate a complete break with the country.
To do this you may want to consider adopting the following measures:

Property in the UK:

• Sell your UK property or let it out for at least 12 months - do not leave it unoccupied
• If you are letting the property, ask a UK agent to deal with the property on your behalf
• Pay all property bills before you depart the UK
• Notify your house insurers that you are emigrating and adjust the insurance accordingly
• Notify your mortgage lender that you are emigrating
• Notify your local council that you no longer reside at the property
  

Business matters in the UK:

• Consider resigning from any UK company directorships or company secretarial positions
• Consider disposing of your UK business interests altogether
  

Other UK matters:

• Notify your UK doctor and dentist that you have left the UK
• Cancel your UK sporting and social club memberships
• You would be wise to appoint an attorney in the UK who is empowered to deal with your UK affairs
  

Taxes

• Send the completed form P85 to HMRC, declaring that you are a non-resident
• You would be well advised not to return to the UK for an entire tax year if possible to emphasise the break in residence
• Do not return to the UK for more than 90 days a year in subsequent tax years, remembering to factor in travel days in this number
  

Finances

• Cancel all UK credit cards and reduce balances in your UK bank accounts
• Pay all UK accounts and close them. Demand evidence that they are closed in the form of a letter of acknowledgement
• Consider transferring pension arrangements overseas.
  

Cars

• Sell your car and cancel your car insurance and subscriptions to motoring organisations
  

In your new country of residence - once you have moved abroad:

• Establish employment or business links in the new country if you are planning to work there
• Obtain a residence permit where necessary
• Contact the local tax authorities to inform them that you have become a resident
• Purchase or rent on a long lease a property locally and buy a car there
• Register with a doctor and dentist in your new country of residence and open a local bank account
• Establish social and cultural connections in your new homeland. Perhaps join clubs, register children at schools etc.
• Have a will drawn up in your new country of residence

What you need to do is make sure that you have effectively cut off ties with the UK in terms of living here. The overall pattern of your life must reflect your declared non-resident status and the fact that you have left the UK for the foreseeable future.

Carol
http://www.PortugalBuyingGuide.com

Am I Making the Right Decision to Move Abroad?

I have just been chatting to a local London friend of mine on the phone. “Are you missing your South African friend now that she’s returned home after her two week stay?” was her question to me. I found it difficult to answer – yes…and no! Truth is I am utterly exhausted - I fair wore myself out!

There is so much to do in London: I have a friend with a longboat so we sailed from Windsor to Hampton Court – it was wonderful. We also attended a colleague’s hen party and behaved rather badly! Plus saw Martin Shaw in a play at Richmond, went to the musical ‘Wicked’, paid a fiver to watch ‘The Merry Wives of Windsor’ at the Globe and attended a memorial to ‘The Few’ of the Battle of Britain outside the Churchill War Rooms which ended with a fly past of a Hurricane and a Spitfire: what a way to end two weeks of London fun. I now need a holiday…!

Talking to my friend, I was trying to persuade her to move abroad. She’s quite keen but scared of the unknown factors…and who of us who have moved weren’t? Most people have the idea and the initial spark, but soon lose their drive. These are the people live to say “If only” in their old age! Then there are those who have the passion and desire to carry their plans to fruition…but inevitably, at some stage, find themselves stopping to catch their breath and to wonder if they are making the right decision.

An OGC reader I spoke to, when planning her move abroad, found exactly that: “I spent all my spare time planning, preparing and ticking off endless lists. After a few months I felt overwhelmed – was I merely caught up in ‘living the dream’ or did I truly understand what lay ahead? And how could I make sure that I wasn’t making a big mistake?”

I have chatted to people who have found that the move wasn’t right for them and they moved back to the UK almost immediately – at massive cost needless to say. So how do you make sure that the decision is right for you?

One way is to ‘play house’ at your overseas location. Try to make arrangements to stay for as long as possible on your next visit. Then plan to experience the place as someone who lives there would. This means that, rather than staying in a hotel, you rent an apartment or a villa or – first prize - do a house swap. Instead of visiting the main attractions, check out all the things that the locals do. Go grocery shopping, look at employment adverts and do everything you would normally do if you were moving from one town to another in the UK.

My afore-mentioned OGC reader decided to book a two week trip to her intended relocation destination. Although she had spent several holidays there, she had never done so with the intention of one day calling it home. She said it was the best decision ever: “By spending two weeks in my future town I was able to better set my expectations. I visited the doctor, paid a visit to a community centre, made enquiries about a local art class and made sure to eat most of my meals at home. By the end of the two weeks, I realised that some of my expectations were a bit too high whereas others were too low. Overall, the holiday gave me what I needed to get back on track.”

You might want to test public transport to see how reliable it is, stroll through the area at different times of the day to listen out for noise, buy the type of groceries you normally purchase to determine if they are available and at what price – and definitely check out health services. How far away are they and will they cater to all your needs?

By giving yourself time as a resident rather than a tourist, you will get a more realistic idea of daily life in your desired location. Of course there will be pros and cons but, without experiencing life as a local, you will be making the move without knowing exactly what those pros and cons are. The more you match your requirements and your expectations to your overseas destination, the less likely you will be to ask, “Am I making the right decision to move abroad?”

Why I would think of buying property in Portugal

Hey – how are you today?

I am still racing around London showing off my ‘home town’ to my South African friend! The highlight of this week is going to be the Spitfire and Hurricane fly-past over Whitehall at 4pm, Friday 20th August 2010, commemorating the 70th anniversary of the Battle of Britain. The flyover is preceded by a reading of Winston Churchill's speech outside the Churchill War Rooms at 3.52pm.” Never in the field of human conflict...” and all that! I am really looking forward to it.

People often ask me why I would think of buying property in Portugal. It’s not as well known as Spain as a property destination but to me that’s half its charm! It's an inexpensive and fascinating country that is still catching up with the rest of Europe after forty years of dictatorship. This means that it has a far more rural, unspoilt feel and of course it often means that it costs less to live or holiday there.

Portugal, meaning ‘beautiful port’, has miles of unspoilt coastline coupled with a unique culture and a rich history. When I last travelled around I could not believe the beauty and the cultural heritage that I found in even the smallest towns and villages.

Many of the greatest seafarers and explorers were born in Portugal, and the Portuguese Empire once stretched from Brazil to the Indies, with Portuguese the most widely spoken language in the world. Today Portugal’s beaches and ports are far more likely to be catering to happy tourists. The long sandy beaches of the Algarve are well known, but all along the coastline there are opportunities to enjoy a whole selection of water sports in crystal clear waters, all to be enjoyed in the lovely warm climate, with temperatures of around 35°C in summer.

Inland, small towns and villages are surrounded with olive groves, vineyards and fruit trees. I went in spring and it was so delightful to walk through fields of spring flowers. There are also vast national parks, thickly forested and with an abundance of wildlife. To the north are snow-capped mountains, while to the south are the gently rolling plains where locals farm their lands.


Let’s not forget too the wonderful festivals with almost every town and village celebrating a regular saint’s day with a festival, usually in summer. There is also of course an endless selection of historic attractions plus many beautiful architectural gems. My especial favourite is the Palace of Pena at Sintra, which beautifully combines gothic, Islamic, and renaissance styles. I also love the ancient ramparts around towns like Ronda and Óbidos – one of the things I loved doing was walking around the whole of Óbidos along the walls – it’s a great way to see how the locals live!

To top it all off, there are also a number of excellent golf courses, plus other sporting facilities – but all pale into comparison with football, that Portuguese obsession, which you can watch from the many stadiums dotting the country. So…the question really is: why wouldn’t everyone think of buying property in Portugal? Do you feel the same? Please tell me of your experiences and why you are looking at moving to Portugal – or why you love the country so much.

Bye for now and happy summer days, Carol.

http://www.portugalbuyingguide.com

Know Your Credit Card...

Hello there.

I am so excited to have discovered the Canary Wharf free concerts here in London! Every Thursday evening throughout the summer they have something new: last week I saw a real blast from the past: Georgie Fame – yeah yeah! It was great – a clear, lovely evening, music and a few munchies – what could be better?

Enough about me…You are thinking of moving or buying property abroad, and I have no doubt that for those inspection trips etc you have a credit card. If you are like me, a credit card is a credit card...For years I had only one of these pesky little devils, but these days it pays to know the perfect card to pick. They have very different pros and cons and it could cost you a lot of money if you are using the wrong one.

You need to make sure that you are not making new purchases on cards charging expensive rates, paying huge APRs on old debts and missing out on benefits such as cashback.

Right – firstly, what’s APR?

APR stands for Annual Percentage Rate and, under the Consumer Act 1974, it is required to be published for all regulated loans so consumers can quickly and easily compare products.
This means that when advertising any form of credit, the lender should ensure that the APR is more prominent than any other rate.

APR was introduced because the interest rate a lender charges for credit will not accurately reflect the cost to the borrower. For instance, on top of the interest rate, there are other costs to consider such as administration costs, acceptance fees, broker fees and so on. It would be next to impossible for consumers to compare all these costs for every loan. Because an APR takes in all of these extra costs, it will always be higher than the lender’s actual interest rate, but in effect it calculates all the costs for you.

It is important to bear in mind however that unless the loan is fixed, there is no guarantee that the APR won’t change during the duration of the loan. For example, if the Bank of England raises its interest rates, the APR on your credit card will also go up. On the other hand, you will benefit if the Bank cuts its rates.

Remember that any form of credit on today’s market will come with its own set of restrictions, fees, charges and penalties. As a general rule, if you keep up with repayments and settle the loan in the agreed term these will not be a factor. However, if you miss repayments, want to settle early, or deviate in any way from the original agreement it could end up being very expensive.

The 0% balance transfer card is one of the most useful credit cards out there - this card comes with a 0% balance transfer offer that lasts for a set period – sometimes up to 16 months. This means that for 16 months you will pay no interest but chip away at your debt. However, once your 0% period passes, interest is charged on the whole balance…The thing to remember here is that using one card for both paying off old debts and making new purchases is not usually a good idea.

Some credit cards come with 0% on new purchases. Here you need to pay the entire balance off before a certain date. If you don't, your credit card provider will apply a standard APR to your outstanding debt and this could mean sometimes up to 17%!

Then there is the long term, low rate credit card. These are a great option for someone with debts they are unable to clear within a short space of time. The advantage of these cards is that they offer borrowers an affordable interest rate for much longer than the average 0% card - in some cases, for as long as it takes an individual to clear their debt in full.

For instance, one of the banks are offering a long term, low rate credit card that comes with an interest rate of 6.8% APR, and if you transfer a balance to it within 60 days of opening your account your debt will remain at this low rate until every penny of it has been paid off.

Finally there is the Cashback Credit Card. These cards allow you to earn back a proportion of what you spend, potentially netting you a lot of money each year, depending on how much you spend. The most important thing to bear in mind when using a Cashback Card is that you must repay whatever you spend on it in full every month or you could end up not only not making money but paying very high interest rates. With these cards be aware that there is often a figure which you must spend annually to ‘qualify’ for your cashback option.

I hope this has been some help, if only to make you aware that there are choices out here and you need to ask about them before just accepting any credit card offered to you by your bank or financial institution.

Bye for now – I’ll chat next week!

Summer smiles,

Carol
http://www.portugalbuyingguide.com/

What to do in Portugal?

Hello again.

Have you seen the Grace Kelly exhibition at the V & A recently? I haven’t, but I did go along to a talk by her friend and biographer Donald Spoto. He gave a fascinating insight into the real person behind the iconic image – it was so interesting. There’s always something to do in London isn’t there?

Are you going to Portugal to look at property this summer, or indeed just to holiday? I know when I used to take my kids on holiday I always used to like to plan it so that there was something to occupy their days – nothing like an exhausted child to ensure a good night’s sleep!

The possibilities are endless in Portugal really, both for families with kids and those without. There are endless World Heritage sites, natural wonders and cultural surprises and all are far quieter – and less expensive - than in neighbouring Spain. Plus of course you have the benefit of sandy beaches, traditional fishing villages and an expansive stretch of rugged coastline. Diving and swimming are of course popular and you could learn how to surf in the southern region or along the western coastline. Or what about deep sea fishing or a Douro river cruise exploring the river and nearby ancient ruins?

Many championship golf courses dot the country plus horseback riding is a fun activity. You could perhaps combine that with a visit to the quieter rural areas, staying at renovated farm houses and traditional homes that provide accommodation for tourists and allow a glimpse into a more tranquil way of life.

Northern Portugal is far more mountainous with many really lovely national parks that reveal the beauty of the mountainous region which borders Spain. If you are more interested in cultural activities then Porto is lovely and you may want to explore the many castles and cultural sites here or in cities like Lisbon, Sintra or Obidos. Personally I loved Tomar, which had connections to the Crusaders and Vila Viçosa with its lovely palace. Nearby is Evora with its breathtaking Roman ruin in the centre of the town – heaven!

And while you holiday you can be taking in what your area of choice looks like in the busy summer season. That lovely village that you first saw in spring or autumn may be simply too busy for you in summer. Or you may find that you enjoy a revived night life and having a few folk around…but for my money it really is best to see your chosen area at all times of the year before committing yourself.

I know for instance that the places I would chose to buy if I could are either Marvão or Castelo de Vide but I visited last in early May. What are they like in the middle of summer I wonder? Food for thought. Have lots of fun and do let me know your findings won’t you.

With all best wishes for happy summer days,

Carol.

Make Sure You Use An Independent Lawyer

Hello again.

My daughter was in town last week so that was really exciting…and the best thing of all was that we went to a Will Young concert at Kenwood House!

Well, I thought it was the best thing – my cool kids were a trifle disconcerted at first but to their enormous embarrassment they LOVED Will! Evidently he’s not considered particularly cool but the great music and his relaxed charm won them over, as I knew it would. It was a warm, clear evening and my daughter had put together a picnic of all my favourite things – smoked salmon, prawns, a few glasses of wine…it was great sitting on the lawn just soaking up the lovely summer evening and the listening to Will’s dulcet tones, surrounded by like-minded people.

On to more serious matters. In my years with the OGC, I have spoken to lots of people buying abroad, most of whom were thrilled with the outcome, but sadly there have been a few that have had tragic tales to tell.

One such couple had bought the holiday home of their dreams, with lovely views of the sea, and were excitedly planning regular visits accompanied by their children and grandchildren. You can imagine their horror when they visited their property as it neared completion only to discover that a block of flats had been erected which totally obscured their sea view. I must say I was utterly heartbroken on their behalf. Here is another tale, as emailed to me:

“…none of our documents were translated by our English speaking lawyer, introduced by the agent! (I know - classic mistake and one we are paying for in stress and also money!). We thought we had bought a house complete with the land, but our documents tell a different story which is that we bought the land for one price. We then bought the shell of the building and employed the builder to complete the house (he still hasn't). This contract also states that if the builder does not get his money then he can sell the house and take everything in it (about £30,000’s worth of furniture and fittings).”

Why am I telling you all this?

If there is one ‘classic mistake’ that I have identified more than once, it is that people do not use the services of an independent lawyer, thoroughly conversant in English. This really is absolutely vital: retain your own lawyer and do not, under any circumstances, use one recommended by the seller or developer unless you can get personal recommendations from other people who have used him/her successfully. If you do, you may well find that such a lawyer will have conflicting loyalties. You don’t have to be a rocket scientist to know who they will ultimately look after - you, with your one-of purchase, or the estate agent/developer, with whom they do business on a regular basis. It’s a no-brainer.

Suffice it to say that if both these buyers had used good, thorough lawyers both the above set of circumstances could and indeed should have been avoided.

You also need to make very sure that you understand every word on the contract and that you’re paying as building stages are reached if you are buying off plan. That way you can’t be forced to pay by a certain time. I have heard of people paying almost the full price on a property before the builder has even started the build – it’s a very old con and one that still catches people out.

Please don’t neglect to do the things that you as a buyer would routinely do in the UK…as mentioned, retain your own lawyer, and also make sure you have all documents translated so that you can read and fully understand them and that you get personal references on all builders and developers that you use. A survey would also be on my ‘to-do- list.

I would love to hear how your plans to buy property are coming along. Also, there is masses on really detailed information in the OGC Buying Guides – I have put them all in case you may know someone interested in buying elsewhere! Just go to:

http://www.GreeceBuyingGuide.com/guide.htm
http://www.ItalyBuyingGuide.com/guide.htm
http://www.FranceBuyingGuide.com/guide.htm
http://www.PortugalBuyingGuide.com/guide.htm
http://www.EmigrationGuide.com/guide.htm

Best regards and a sunny smile from me – I am off boating down the canals in my friend’s longboat again!

Carol.
http://www.portugalbuyingguide.com

Why Travel to Portugal

Hello – how are you? This is a happy week for me as my daughter is in town. She lives in Dubai and is here to complete a course module for her studies. She arrived in London hoping to escape the heat in Dubai, only to be met with uncharacteristically hot weather here! I did warn her in advance – but do kids ever listen to their mothers? Thank heavens it’s cooling down a little now, for both our sakes!

Are you off to Portugal this summer? For those sun worshippers amongst us, it may interest you to know that the number of tourists to Portugal have dropped, mainly of course due to the almost universal slump in the economy. The country has always offered some of the best value in the eurozone, especially outside the Algarve, and now you may easily get even better prices.

So…what to see and how to save on costs?

The rule of thumb is that farther north you go, the further the cost of living drops as this area sees far fewer tourists.

If you Google holiday deals, you will find that many holiday companies are offering cheaper deals that ever - a sign of the times. But, if like me, you like to travel independently, you may find that the Solares de Portugal fit the bill. These are not hotels or guesthouses but privately-owned stately manor houses, elegant country homes or lovely old farmhouses. The concept was introduced to help preserve Portugal’s heritage as well as providing accommodation in houses of character “Turismo de Habitação”. Some of them were once a bit tumbledown but they have now been restored to their former glory and are open to guests, who are treated as part of the family.

The Azores is affordable and is also the best place in Europe to see a large range of whales and dolphins up close. There are low cost airline flights plus a growing choice of self-catering options, as well as keenly priced hotels. You may find B & Bs an even better option that the bigger hotels as they can be more flexible price-wise.

Then Portugal’s state-run pousadas – wonderful palaces or convents that have been converted into very comfortable hotels – have introduced a new five-night “Pousada Passport”. This offers savings of up to 40 per cent on walk-in room rates on weekdays. Plus the pousadas have also teamed up with Avis to offer a five-night package at a very reasonable price…these are just a few of the options you can Google online.

Most visitors to the Algarve go west from Faro airport to the busy coastal resorts of Albufeira, Portimão and Lagos. These are the most popular destinations, and therefore the most pricey. Try going east to the nearby pretty riverside town of Tavira for instance and your holiday can cost half as much. Food is much more affordable and so is the accommodation. Finally, some of the most rewarding touring can be found in the coastal province north of Porto called the Minho. Those in the know consider this the most beautiful part of the country, and it is also the most traditional. You can get there via Ryanair and book cheaper B & Bs – that’s what I did when I was in Portugal.

And if you your trip is part of a property viewing trip, this could be a very good time. Prices have dropped throughout the country some are not expecting the market situation to improve before the second half of 2012. You do however really need to focus on accessibility – always important but never more so than now. I write a monthly Portugal Buying Guide newsletter and I am dedicating my end July/ early August one to transport within Greece – you may like to look at it. Just go to: http://www.portugalbuyingguide.com/news.htm around about 29th July.

All the best until next week,

Carol.

Money Saving Tips Abroad

Hi there – how are you?

I never, in my wildest dreams, imagined that I would be hoping for a cloudy, cool day here in London. While my friends were here and Wimbledon was on, it would have been a tad churlish to wish for overcast skies but this week at last I welcome the cooler weather!

Are you going away this summer? Whether you are looking to buy a property abroad or just joining the steadily declining number of holiday makers overseas, there is no doubt that financial restraints have meant that tourism has dropped. Most of us or having to tighten our belts and count the pennies, to use two clichés in one sentence! Not only is getting out there more costly but accommodation is stretching budgets too, so here are a few of my own tips for saving money next time you are abroad:

Food shopping

• It’s true that there are usually some lovely specialist stores nearby but prices can be on the high side if there is little competition in rural areas. It may be wise to consider shopping online if you can. This will mean that you can compare pricing and buy cheaper plus you will be less inclined to impulse buy!
  
• You could also find out if they have something like special offers or ‘double point’s days’ at your local supermarket and make an effort only to shop on those days. Also have a look at the items in the section for ‘nearing sell by date’. I have had lots of success here – things are sometimes quite dramatically reduced and are absolutely fine if you are going to eat them straight away or freeze them
  
• Last but by no means least, make a point of using your local fresh produce market for the bulk of your general day to day fruit and veggies if there is one in the vicinity. You may have to queue at the popular stalls but produce is usually cheaper and often much better than at the supermarkets
  

Make use of your own garden/land

• Once you have your own property, think about growing your own vegetables. Some friends of mine have a small plot and were absolutely delighted this year to be able to pick the most wonderful green beans, potatoes and tomatoes from their own garden. It is tremendous fun to watch something you have planted grow from seed and not difficult to achieve
  
• Invest in a water butt to catch rainwater for your garden
  

Car boot and bric-a-brac sales

• Every village or town has one or more. Look out for adverts in your supermarket and patronise these – you will be surprised what you can find.
  

General household bills

• Good insulation helps cut heating bills down in winter and air con. Bills in summer. Sealing outside doors also helps here
  
• A wood burning stove and/or an open fire may well be all you need for many of the winter months instead of more costly central heating
  
• Remember to turn off your TV, PC and mobile phone charger when not in use – from the wall and not just on the remote! A little goes a long way in saving you money!
  

Petrol

• Both petrol and diesel are usually cheaper at supermarkets. Try to avoid motorway service stations if you possibly can, they can be quite a bit more expensive
  

Insurance

• This is always worth looking into properly. You need to look at the cover you have as well as any excess and compare to other companies
  

And last but not least - communicate!

• This is vital. Communication with your neighbours, local shopkeepers and new friends is vital, not only for your peace of mind and happiness but for helping you to save money on your general living expenses. When I first bought my house abroad a kind neighbour told me where to get the very freshest bread in the morning which also happened to be a little cheaper than the bakery I had been going to. OK, a small point but a good example of how integration can help you in so many ways. So don’t be shy, socialise as much as you can and both you and your pocket are bound to benefit!
  

Any tips of your own that you want to share? It’s amazing how sometimes the simplest things can really help. When someone has told me what they do I have often kicked myself and wondered why I hadn’t thought of it…but sometimes you don’t. That’s what sharing is all about, so do get in touch if you feel you have a really good idea won’t you?

Bye for another week – take care!

Carol.
http://www.portugalbuyingguide.com

Make YOUR financial plan come together….

Hi there.

Well, miracles DO happen! Can you believe the wonderful weather Wimbledon experienced in the run-up to the finals? As I may have mentioned, friends of mine came from South Africa and the USA to watch, and their chief concern was that they didn’t get sunburnt – not a problem usually encountered at Wimbledon! And what a gripping series it is, with the both the men’s and the woman’s favourites out – unbelievable.

I heard recently that they were doing a remake of that classic TV series, The A Team…I know it was ridiculous, but somehow it reminds me of my kid’s childhood, of a less sophisticated era when we all clustered around the TV together to watch instead of the family being spread throughout the house, each at their own computer or laptop.

Remember the catch-phrase – ‘I love it when a plan comes together?’ Well, wouldn’t it be wonderful to jet away to your place in the sun for your summer break, all your plans having come together? If only buying abroad was that easy….or is it? Well, thousands of us Brits do so every year according to the statistics – why not become one of them?

However, has the family agreed on the motive for buying? Is it a heart pounding, emotional fuelled, lifestyle purchase? Or is it a level-headed, pragmatic, money making decision? The majority of people probably want it all - the best of both worlds. However, that peaceful mountain retreat might not rent like the hedonistic beach front apartment…or should it be the city centre apartment which could rent well…but then…do you really want to stay in the business district yourself?

Whatever motivates your purchase, there are certain concerns that you should bear in mind, one of the most important being what financial liability are you taking on and if you can afford it. The papers have been full of property market crashes around the world – indeed mortgages were one of the main factors in many of the bank’s problems.

With 80% of overseas purchases being mortgaged, you need to make sure you choose the correct bank to fund your purchase. This can save you thousands in the long run. Do you need a bank that can facilitate re-finance? What about over-payments, what about off-setting income against mortgage costs? Is there a robust legal process and who should represent you? Cut costs here and you could lose the lot. Also, have you considered what type of property rents well in your chosen area: apartments or villas? Is there a glut of rentable property in the area you are looking at? These and many other factors need serious consideration upfront.

The bottom line is that all of the above involves money and lots of it, so talking to professionals is key. This is a big commitment with big responsibilities. How does it fit into your overall financial plan? Speak to financial advisors who have overseas property experience (not all do), and are familiar with property investment strategies. Understanding the full financial commitment you are taking on, you can then feel confident that you are buying within your budget and not be in for any shocks along the way.

Your plan will only come together only if you actually have one…and then stick to it! Even when buying the holiday home of your dreams the numbers must work… you must understand them, work them out in advance, and then confidently buy, knowing that you have catered for every contingency.

Take care in the week ahead and enjoy the summer sun!

Best,
Carol.
http://www.portugalbuyingguide.com

Renovations

Hey there!

Even I, renowned as I am for a serious allergy to sport, have been caught up in the current sports mania. Okay I don’t actually watch it – that would be going too far – but I have become interested in the fate of Laura Robson, Andy Murray and those vastly overpaid soccer boys. On that subject however, dare I express a wish that Becks was there? It would make watching so much more enjoyable - even I might be tempted to do so…!

Moving on…literally! Chatting to a property expert a few days ago, she was commenting on how enthusiastically the Brits embrace a renovation project. And, in this day and age of concrete monstrosities, sometimes older properties have a very real charm that is hard to resist. This is all reinforced by movies (and I use the word ‘movie’ advisedly - it’s such a Hollywood concept somehow) such as Under the Tuscan Sun that make the whole process one long, romantic adventure…and of course it can be. In Under the Tuscan Sun a series of serendipitous events bring our heroine to a lovely yet dilapidated villa in beautiful Tuscany. Fast forward through a variety of interesting characters - Polish workers, Italian neighbors and an aging British actress - to the inevitable new love in her life…

Sounds great but let’s face it, the whole process usually entails a lot of hard work, more expense than one had at first budgeted for and a number of fraught, stress-inducing experiences along the way.

I have put together a few tips that may just help if you are thinking of going this route:

- One of the reasons often given for buying a renovation project is that it is ‘so much cheaper’ than a home in good condition. Stop right there – is it? And that’s tip 1: always do your sums – before you actually sign on the dotted line. Put together a separate renovation budget and then always factor in additional funding to cover those unexpected costs that almost always raise their ugly heads.

Knowing how much you’re able to spend on the renovation really helps when it comes to choosing a property. If a home needs major structural work and that’s not within your budget, the property may not be right no matter how low the asking price. Always know the full extent of the necessary renovations. Once you know what’s needed, determine the work you can handle and what you’ll need to contract out – then cost it

- Watch out for a suspiciously low priced properties, especially if they have been on the market for a while. There’s usually a reason for that low price…and you need to know what it is

- It is vital that you seek expert local advice. Unless you are able to do all the work yourself, obtain quotes from area professionals

- Check that you are allowed to make the changes that you require. Your idyllic property may just happen to fall within a conservation area that comes with stringent planning restrictions, and even more severe sanctions imposed for breaching them! Or your home might be within an area of significant archaeological interest - which could mean saying goodbye to your plans to built a pool for those scorching summer days

- Factor in to your calculations that renovation permits can add time delays as well as unexpected costs

- Also make sure of the safety aspects of your old property. Is it located in and around an earthquake zone? This could seriously affect your insurance premiums, not to mention the structural considerations and requirements you will need to adhere to when making changes to the building

Let me know if you decide to tackle a renovation project won’t you – I would be fascinated to hear all about it.

All for now: on Wednesday a friend has asked me to join her on a ‘makeover’ two-for - a renovation project of my very own! One paid (by her), one free (for me)! Wish me luck…

Best wishes,

Carol.
http://www.portugalbuyingguide.com

Moving abroad NOW can still make sense!

Hey – how are you?

Well, it’s the end of a busy time for me. Last week I went to a lecture on ancient maps at the British Library and also went to see the amazing Japanese Kabuki at Sadler’s Wells. It was stunning – very strange and unlike anything I had seen before, but fascinating. Three of the actors came from families that had been involved in Kabuki for generations…we listened to a translation in one ear and caught the sounds in the other – it was brilliant!

Not so our daily intake of news! Are you, like me, rather tired of the constant gloomy headlines in our newspapers and on TV? Sterling seems to vacillate constantly against other currencies and just seems to have added to our woes. If you are keen to have your very own place abroad but feel it to be something of a distant dream, please do not despair!

Your main expense, namely a property abroad, is generally speaking, a lot cheaper than in the UK. If you own a property here this might mean that you will free up quite a sum of money – always useful. And if you don’t have capital to free up, there is very little doubt that it will be less expensive to get your foot on the property ladder abroad. Also remember that the price of property worldwide has been affected by the credit crunch – nowadays it is possible to make cheeky offers and sometimes get real bargains.

The other thing you might think about is ‘testing the waters’. You may want to rent abroad and see whether it suits you and whether indeed it is a viable option to move? You could rent out your property in the UK (if indeed you have one) for a set period of time, rent abroad for the same period of time and that way give yourself time to assess what you really want to do.

That way you will have the opportunity to try out an area before making a commitment to buy. You'll gain an insight into your neighbourhood: is it friendly and crime free or noisy and disorderly? Whether you are going to be living there yourself or buying as an investment it is vital that transport is readily available. Also things grocery stores, schools and other facilities – if it’s a holiday investment, is it near holiday amenities?

The real bonus with this strategy is that if you don't like the area you've decided to settle in overseas, or worse - you don't like the country - you can leave without the burden of selling a property. Most overseas tenancy contracts will tie you into a six or 12 month period rather than the indefinite, and often costly, amount of time it takes to sell a property.

It will also allow you to judge those indefinable things. For instance, have you considered how much you will miss all that is familiar to you? I moved to the UK from South Africa a number of years ago now, and the reason I moved was to be nearer my family, especially my grandchildren. I had no sooner settled than my son-in-law was transferred to Dubai…

My story had a happy ending in that I love London, have made new friends and see my son on a regular basis but you might find that all is not as you perhaps thought it would be.

So…plan on! Only you can make it happen and I am here to tell you that you can change your life if you want to – it’s just a matter of setting your goals and steadily working towards them.

Let me know how your plans are going…I’d love to hear your news…

Have a great week and best regards,

Carol.
http://www.PortugalBuyingGuide.com

A Few Thoughts of Retiring Abroad

This may or may not apply to you, but if it does, it’s worth thinking about it carefully. Retiring is a whole new ball game as our friends across the pond would say, but to up sticks and retire abroad – well, that takes courage.

There is a whole rather comforting discipline to working – love it or hate it, it does fill the day and give an order and a structure to one’s life. Moving abroad is a huge psychological ask at any time but add to that the utterly new dimension of retirement after perhaps a lifetime of work and it means enormous changes to both your lifestyle and your mindset. There is no reason at all that you should not be utterly happy abroad – provided you have done your homework and planned well in advance.

One tends to become a little more cautious as one gets older and, although making a big life change can be exciting and refreshing, making prior arrangements for pretty much everything will stand you in really good stead and give you a feeling of control. So what are the most important considerations for a successful retirement abroad? Here are a few thoughts:

Finance

- Before you go, make sure all your arrangements for your pension, investments and any income are properly in place. I strongly advise seeking guidance from an Independent Financial Advisor (IFA). Expert help in formulating the plan that takes into account your own personal set of circumstances is essential and you may well save yourself on tax/transfer costs etc.

- Set up an account with a currency company if you need to transfer funds abroad – it will save you a great deal of money over your high street bank. Go to:
http://www.smartcurrencyexchange.com/
for more on this

- Sometimes bureaucracy abroad can be a little intimidating so make use of a translator with things like setting up direct debits/ understanding bills etc.

Family

If you are close to family you need to know that frequent visits are possible. Think carefully about the location of your new home; you are likely to have far more contact if the journey is relatively easy and not too time-consuming. Being close to an airport for instance will make more frequent visits possible.

Another tip is to make sure you are set up for email and/or a webcam so you can not only talk to your loved ones but see them at the same time.

Structuring your new life abroad

Think ahead a little and aim to have some sort of project or plan perhaps medium to long term. Most of us need to have some sort of structure to our days and retirement is no different.

Active retirees generally have a far happier and more fulfilling life; working in the garden, perhaps tackling a crossword each day, learning the language or taking the dog for a walk will all stand you in good stead for a peaceful and healthy retirement. And dogs make new friends for you too!

You might want to give yourself a geography or history lesson: perhaps to visit a new town each month and find out all about it. Hopefully you will feel enriched by what you see, may well meet new people and will also be keeping fit!

Your new community

As soon as you arrive, make an effort to chat to your neighbours and keep an eye open for any clubs/associations/groups. Most villages abroad have thriving communities and you are more than likely to find a few fellow Brits too! So take some time out at the beginning to meet and greet, get out and about and take advantage of any advice your new neighbours may be willing to give you. Even if it is not something you find useful, you will have made a new friend!

The future

Your house needs to be easily maintained and the smaller the garden the less lawn that needs mowing! You might want to consider somewhere with few stairs for example or somewhere with the possibility of converting one of the downstairs rooms into a bedroom at some stage. And again, think about the location of your new home: that rural retreat may be beautiful but a little bit of village life with reasonably close transport may well be a Godsend. Also consider medical requirements: is there a doctor/hospital nearby, just in case?

Hope this has given you food for thought! The weather has been great all week so let’s hope that the weekend stays good for a change!

Bye for now and best wishes until next time,

Carol
http://www.portugalbuyingguide.com

Find a good and trustworthy developer!

Hello there. How are things going with you? Still planning on buying abroad?

Chatting to people about buying property abroad, I find that one of the main concerns is how to chose a good and trustworthy developer if you are buying off-plan.

This problem has been made worse by the current economic climate – many developers are going under, and sometimes taking unwary buyers and their dreams with them. It is therefore absolutely crucial that you have a really god look at the credentials of your developer before signing on the dotted line..

An email that I received recently bears this out. It tells of the endless problems encountered by one of the OGC readers who had failed to do his homework – and he really paid a heavy price, both in financial terms and in the stress that such things bring with them.

The property he bought was about one third completed at the time he paid his deposit to the developer. All went well until the house was ready for the final finish and, at this point, the developer sacked the builders and employed his own low paid and unskilled labour. The result was that the finish was very poor and, although the complex was completed, only 7 or 8 properties have been sold to date.

Financial penalties for late completion were not paid although there was a six month delay. The unhappy owner only discovered when it came time to address this problem that his solicitor also represents the developer!

All this could so easily have been avoided. I am going to outline a few essential and non-negotiable points for you to think about:

- If possible, move into rented accommodation nearby BEFORE you plan to buy and chat to locals about the developer/s you are thinking of buying through

- Search the Internet for expat forums on your town or city of choice. Some highlight poor practices and name and shame shoddy developers

- Google in the name of the developer you are thinking of using and see what comes up

- Get a developer that is a member of a regulatory body if at all possible

- Consider using a reputable estate agent instead of going to the developer direct – to protect themselves they will have done the checks

- Insist on visiting a couple of the developers’ previous projects and on talking to previous buyers

- Retain a solicitor independent of the developer so that there can be no conflict of interest

- Make sure your solicitor draws up a contract that protects YOU

- Make absolutely sure that the developer’s financial staged payments (stipulated in the contract of sale) require you to pay according to completion of build stages and not simply by date

- Buy a bond or take out insurance to protect yourself if the developer goes bust or there are any major issues with the build

- Take your time and refused to be rushed

If you follow the above to the letter the chances of anything going wrong will be dramatically reduced.

Chatting to someone in the property business abroad, she told me that she was stunned by how many people simply abandoned all the normal checks and balances that they would apply if they were buying property in the UK – don’t be one of them!

Speak to you soon – and I’d love to hear from you.

Take care until next Friday – warm wishes,

Carol and Kim
http://www.portugalbuyingguide.com

Owner of all you survey…!

Hello there – how are you? Peering out of my window it is gloomy and overcast: I cannot get over how quickly the weather changes here. One moment it’s blue, clear skies and the next – rain! Oh well… I guess that’s why people buy homes abroad!

I have been working for the Overseas Guides Company for a number of years now – I must have spoken to hundreds of people buying property abroad; most of them have gone on to find the home of their dreams and have absolutely no regrets. However, I do sometimes hear of disasters and, on analysing the problem, it all comes down to one thing: they have not checked the property and its surroundings adequately before signing on the dotted line.

Two cases spring to mind here. I received an email a while back from a couple who had purchased a farm from an estate agent and were told that it was just over 2 hectares in size.
All the official paperwork confirmed this. To their enormous surprise, when measuring the land some while later, they found it was only 1 hectare. The estate agents deny liability, saying that the official papers confirm that the land is 2 hectares and that they go by the official figures. Needless to say, their query to me was how they should set about recovering half their money.

Hindsight is 20/20, but there is only one way to make sure that this does not happen to you and that is to get an independent surveyor, or an architect licensed to survey, to perform a survey and make their findings a condition of sale. You also need to make sure upfront exactly what will be included in the survey and demand a full report on all findings. A full structural survey should include the condition of all buildings, particularly the foundations, roofs, walls and woodwork; plumbing, electricity and heating systems; and anything else you want inspected such as a swimming pool plus its equipment…and the size of the land of course.

Sadly, the only route for this unfortunate buyer to go is probably to litigate, but this can take a very long time, may cost a lot of money and who knows if the owner is still around? And still has the money to reimburse? Or will even be found guilty - once all the contracts are signed you pretty much accept the property as is – ‘Voetstoets’ is the term used in South Africa. The seller may even have sold in good faith and not be aware of the discrepancy… a really thorny issue, isn’t it?

The second disaster I was made aware of was an apartment with spectacular sea views, bought by an older couple as a holiday bolthole for their grandchildren. Trouble was, when they arrived at their holiday apartment after an absence of a few months, an enormous block of flats had been erected, totally blocking their magnificent view of the sea.

Strangely enough, some months before I had planned a trip to Crete, in Greece, and one of the OGC readers had asked me to have a peep at a sea facing apartment he was thinking of buying. I asked the agent I happened to be travelling around the island with, and his immediate reply was that his company were building a huge block in front of it…Needless to say – one lucky escape!

Make sure you are not caught out in this way - a professional survey may cost a bit but it really is money well spent.

Let me know how your plans are coming along. Have you heard any stories where a survey saved the day – or perhaps the reverse, where disaster struck because no survey was completed?

Take care and see you next week. Best regards, Carol (and Kim)
http://www.portugalbuyingguide.com

A ray of light in the gloom...

The news from The Euro Zone is not good this week, to say the very least.

An estimated 100,000 people took part in the march in central Athens to protest austerity measures being pushed through by the government and sadly three people died in the ensuing mayhem. The measures were instituted at the insistence of the EU and the IMF (International Monetary Fund) and it looks as though Portugal and Spain may follow hard on Greece’s heels…with many wondering whether the UK will face similar problems.

Moody’s, the international rating agency, warned on Wednesday it may downgrade Portugal’s government bonds in the next three months because of deteriorating public finances and “long-term growth challenges”. The warning came as the Lisbon Stock Market fell for a second consecutive day and the cost of government borrowing rose amid market fears that the Greek debt crisis could spread to Portugal and Spain.

The Portuguese government has promised that it would immediately implement austerity measures initially planned for 2011-2013 in response to “speculative attacks against Portugal’s sovereign debt.” The measures are part of a stability and growth programme that aims to cut the budget deficit from 9.4 per cent of gross domestic product in 2009 to 2.8 per cent in 2013.

Portugal's great weakness, however, remains its slow growth as competition from elsewhere in the world makes their traditional industries redundant. Factories have closed while new industries, such as renewable energy, have not yet been set in operation. Unemployment is at 9.7 %, lower than Spain, but unlike Spain, Portugal failed to create growth or get its public finances under proper control after it joined the euro in 1999.

The Government has however decided to work with the opposition party in an attempt to persuade the markets that Portugal is serious about controlling its deficit. Measures already announced include higher taxes for the rich, rising from 42 to 45%, and later retirement for civil servants, where retirement age has now been set at 65 instead of 62 ½ - strange to set it the extra half isn’t it? Public sector workers in hospitals, schools and courts went on strike last month to complain about this change…

It does seem that there is a singular lack of forethought as to how strike action and protest marches will effect the economy – mind you, I suppose the same could be said about the BA strikes at a time when BA is struggling to keep afloat. Add to this the natural disaster of volcanic ash making tourists wary of travelling to Europe and it really does seem a recipe for financial disaster as it may well put holiday makers off.

All this would seem to be unremittingly gloomy, but interestingly enough, if you are in the process of buying property abroad right now it may not be.

On Wednesday sterling hit €1.16/£1 against the euro. If there is one single thing that you can do right now to protect yourself, it is to sign up with a reputable currency company like Smart Currency and consider ‘forward buying’ your currency. As Smart mentioned in an email sent out to all clients, and I quote: ” Even though the European Central Bank and the IMF say they have agreed a debt rescue package for the Greeks the markets remain unconvinced. And problems are spreading to other European countries such as Spain and Portugal, whose debts are much greater than the Greeks.”

You can buy currency at today’s rate for up to a year in the future. This means effectively that you will know in advance exactly how much your currency transfers will cost you. You will not have to be in the hands of whatever financial disaster may arise, and that includes any problems that may hit the UK. Frankly, the wisest course of action would be to pick up the phone and have a chat to a currency expert about this. Right now! Go to www.smartcurrencyexchange.com

Let me know how your plans to visit or buy in Portugal are going. I am planning a visit in August and I can’t wait! Any ideas out there – what’s your favourite place? I’m toying with the idea of Lisbon which, believe it or not, I have never visited!

Take care…bye for now!

Carol.
www.portugalbuyingguide.com

Take the ‘luck’ aspect out of renting your home out abroad…

Hello there!

What a week I have had! One of the things I did was to go on an arranged walk to Belgravia, here in London, which promised to visit Chester Square among other places.

The reason I wanted to see Chester Square comes down to what I thought was a rather amusing experience I once had. Very many years ago now, my husband and I had befriended a young English chap, Nick. He had popped in for dinner at our home in South Africa and stayed for 6 months!

Anyway, fast forward to a number of years later in London and his rather pompous brother, whom I had not met, was to collect me for a lunch with Nick. He phoned to get directions from me and I could hear by his voice that he thought I was a rather common-place ex-Colonial type. I happened to be staying with a friend of my Dad’s - an ex-Air Force friend - who had ‘made good’ and lived in one of the best addresses in London, where Roman Abramovich now lives and where houses are among the most expensive anywhere in the world, costing up to £125 million.

“Chester Square, Belgravia” I said; “Do you know where that is?”

There was a long pause…and then he answered “Yes, I know where THAT is.” It was a very satisfying moment…I must admit I had a bit of a giggle!

Back to buying abroad.

Watching the news and reading the newspapers, there is a very definite sense that the economic stresses of the past while are still with us. Many people are foregoing those expensive cruises or hotel holidays in favour of renting a home abroad for the family. If you have either bought a home abroad or are planning to do so, and you are thinking of renting it out, then you need to be aware of a number of things if you want it to rent out quickly and easily.

Location is of major importance, but a close second is how your holiday home abroad is presented - people are strongly influenced by their immediate impression of your home. I don’t know whether you watch those TV programmes like ‘House Doctor’, but I found myself thinking that there is a great deal of truth to what they reveal. Plus there are a few extra touches that can make all the difference and keep people coming back to your home year after year. Here are a few ideas to get you started:

- When buying, be aware that people do not want to spend hours getting to a place. It must be easily accessible if renting it out is your main objective

- Think clearly about why people are coming to the country. If it’s for sunny weather and beaches, then you must be near the beach. Also, the expense of a pool may well pay dividends

- It needs to be near shops, restaurants and transport. You may like seclusion but most people require facilities relatively close to hand

- You need someone reliable locally to clean and change bedding etc. and to assist with any problems that may occur: burst geysers and so on cannot be dealt with from the UK!

- Before you think about renting your home out, stay there for at least a week or two. Test out what it would be like for a guest, what they require and how you could make it more pleasant so that they want to return time after time

- Before they set off, send them an email or pack with directions as to how to get to your home plus names of car rental companies or how to get there via local transport

- Make up a welcome pack to greet them on arrival: pop in things like transport amenities and timetables, flyers for local pubs and restaurants, a list of annual festivities or fairs and emergency phone numbers. Plus perhaps the name and phone number of a cleaner should they want to use one. Always have milk and a bottle of wine waiting in the fridge to welcome your guests…it’s amazing how these small things will give the impression that your guests are important to you

- Leave a form asking for feedback. This is essential as it will give you a clear indication if you are getting it right

- Decorate your home in a simple yet welcoming way. It should be as relaxing and stylish as a hotel. Neutral colours are cool and inoffensive – you can introduce splashes of colour with pictures. Ikea is King when it comes to decorating touches, but good, sturdy furniture will last longest and give fewer problems in the long run.

- Remember too that the very last thing guests will want to do is to be constantly cleaning. There must be a hardy dishwasher and a washing machine. Hard floor surfaces are best, where a quick sweep will do the trick. Guests are often wet from the pool or the beach and greasy from sun lotion, so sofas and chairs need to be easily laundered and robust – perhaps throws may be a good idea? Simple shutters could be a great idea rather than curtains that need to be laundered. I personally now have blinds at home: I love the sleek look and I became very tired of bulky, grubby curtains.

I would say “Good luck”, but that is the point. You need to take the ‘luck’ aspect out of the whole process and work towards a recipe that ensures certain rentals and repeat business on an ongoing basis.

Bye for now and I hope this has been helpful!

Carol
http://www.portugalbuyingguide.com

Planning On Renting Your Property Out? This Is For You...

Hi there.

This has been a very strange time for me: a deathly hush suddenly fell over my flat recently. Yes, you’ve guessed it: I live in Fulham, directly on the flight path to Heathrow Airport! It really drew attention to the volume of noise that we have subconsciously adapted to and no longer consciously hear.

Having just recently experienced the vagaries of the BA strikes you would think that I would be a bit more sympathetic. Indeed, my heart does go out to all those very many people who have been inconvenienced, but I have to say that the silence was delightful!

Back to Portugal…I just wanted to point out a few things to you about renting out property there - a law was passed quite recently, only about a year ago, so you may not be aware of it. The purpose of the law is to make sure that homes that are let out meet all utility and structural requirements – after all, a safe and happy tourist is one that may well return!

Holiday accommodation in Portugal is now split into two main categories, classed as either an Empreendimento Turístico (tourist establishment), or an Estabelecimento de Alojamento Local (Local Lodging Establishment).

What does this mean?

Empreendimento Turístico or Tourist establishment
The following properties fall into this category:
- Conjuntos Turísticos - non residential complexes where the complex is solely used for tourism purposes and people cannot buy property
- Hotels
- Public campsites
- Other types of commercially owned establishments that provide temporary accommodation to paying guests such as guesthouses, apartment complexes, youth hostels and holiday villages
Estabelecimento de Alojamento Local or Local Lodging Establishment
A property must have an Alojamento Local licence if it meets all of these three criteria:
- It has a Licença de Habitabilidade (habitation licence), which is provided by the local authorities. It proves that the property has been inspected and meets the required legal standards for occupation.
- Any property built from 1951 onwards as a habitable dwelling must by law have a Licença de Habitabilidade. If the property was built before 1951, you must have a certificate from local authorities stating this. If a property built before 1951 is then renovated, an application for a Licença de Habitabilidade must be made.
- It provides temporary accommodation to paying guests
- It is not considered an Empreendimento Turístico (as above)
Private holiday home rentals will fall into this category. Properties with an Alojamento Local licence must:
- Be in good condition externally and internally
- Be connected either to mains water or a bore hole
- Be connected to mains sewer or a septic tank
- Have both hot and cold running water
- Have adequately furnished rooms
- Have sufficient ventilation
- Have blinds or curtains
- Have suitable locks on the outer doors
- Have at least one bathroom for every three bedrooms, with toilet, basin and a bath or shower
- Have sufficient fire extinguishers as well as first aid equipment
- Have instruction manuals for all appliances
- Display the international emergency phone number of 112 in a prominent position
- Have bed linen and towels changed at least once a week
- Have an official complaints book

To obtain a licence you will need to submit an application at your local town hall. They may arrange an inspection trip to ensure that all is as it should be at your property. Once they have authorised your licence you automatically have permission to rent your property out.

Remember, if you are thinking of recouping some of the cost of the property by letting it out, you need to make very sure that it conforms to the licence requirements BEFORE you sign on the dotted line. That, or be aware of the changes that the property needs to bring it up to scratch – and the accompanying costs.

Depending on who you are buying the property through, they should be able to assist you with this plus advise you as to how to get the licence. In fact, it would be quite a good test of the estate agent’s service ethic to find out in advance if they are prepared to help you with this. I hope this helps – do let me know if you have had any experiences with this won’t you? Have a good week and take care!

Carol Dunning
http://portugalbuyingguide.com

Planning...Before Rather Than After Your Move!

Hello there.

What an erratic time it has been weather-wise hasn’t it? After a particularly warm day last week I set off for a long day out, only returning in the evening. I optimistically left my coat at home – MISTAKE! I have learnt the ‘umbrella lesson’ (never leave home without one…!) and I am now rapidly learning the coat one!

I was recently reminded of my move abroad in that a really good friend of mine has fallen into a trap that I narrowly avoided - he left South Africa without actually going through the emigration process. His wife has a British passport so there was no problem when it came to entering Britain, but the problem has arisen now that he wants to transfer the balance of his funds to the UK.

If he had officially emigrated this process would have been comparatively easy but since he did not do so it has become highly restricted and complex. Plus of course there is the added problem of trying to get things done from a distance. For myself, it took me a full month of visits and endless phone calls to tax and government offices before I finally had all the papers I needed to formally emigrate – I don’t want to think of the frustration and the cost of trying to do this from abroad. Quite apart from anything else, it was a personal relationship that I forged with one of the people in the tax office that finally ‘cracked the case’ – never lose sight of the personal touch and of being remorselessly pleasant and patient throughout! A few tantrums and ill temper can delay you by weeks as obstructive staff may decide that it’s payback time!

You obviously need to make sure in your own mind that you intend to remain abroad, but once you are absolutely sure of this – as I was – you need to go into all the tax implications of your move in order so that you get the most possible value from your savings.

For instance, British pensions – when paying out – are now deeply unattractive. One of the reasons for this is that the income generated by a pension is restricted by the fund it is invested in. Then only 25% of the fund value is available as a tax-free lump sum, plus of course the annual/monthly amount paid is taxed at source. And sadly the final proceeds on death often disappear back to the insurance company rather than going to loved ones.

Alternatives are available and benefits can be extremely advantageous - this is what you need to look into before rather than after your move. In 2006 new EU legislation opened up opportunities for UK pension holders to move their pension abroad, thus giving greater control to the pension holder. However, the scheme, called Qualifying Recognised Overseas Pension Scheme (QROPS – pronounced Crops) needs to meet certain criteria.

To get you started you can access a short guide that the Overseas Guides Company has put together which details exactly how this works. It's about what can be done about increasing the income you get, eliminating or reducing the tax you will pay and effectively ensuring that beneficiaries get ALL of the funds upon death rather than just a percentage plus lots more. This may be a good way to start the process - if you are interested in getting a copy of this guide, please go to: http://www.overseasguidescompany.com/downloads/OGCQROPSGuide.pdf

Also, Smart Currency has put out a brilliant FREE relocation report. One of the toughest lessons I learned was that I should have used a currency company to transfer my money abroad rather than my high street bank. Why? Well, this report will explain all that and tell you how to save money…always useful! Go to http://www.smartcurrencyexchange.com/emigrationreport.aspx if you want to access this.

Once again, it’s all down to planning and homework but seriously, not a minute of the planning I did was time wasted and, in the end, it allowed me to move seamlessly and with the minimum of trouble.

More next week! Please jump in and add anything that you feel may help or that you would like me to discuss won’t you?

Best,

Carol.
http://www.portugalbuyingguide.com

Living In Portugal

Hello there!

My name is Carol. I immigrated to the UK - the land of my birth – in 2006, after spending a lifetime in South Africa. I had a serious health scare and it’s funny how something like makes you reassess your priorities isn’t it? It took me a very short time to realise that I wanted to be nearer both my children and their families in London and so I packed my bags, left behind me a wonderful job and many close friends to move here.

Needless to say, the first thing on my list was to get a job. Looking back, I sometimes wonder at my blind faith that everything would turn out fine – and – do you know what? It really has. Unbelievably, a friend of my daughter’s bore my CV off to her child’s school where it was picked up by my present boss’s wife…and here I have happily beavered away at The Overseas Guides Company ever since! My friends in SA were disbelieving at first: could it be true that I had a job that entailed writing about and endlessly discussing countries that I really adore – and that includes Portugal? And they call that WORK?

Part of my job has been to travel abroad, to have a look at various property options and to meet all the property professionals that many of the OGC readers have come to use and rely upon. I know Portugal well. Years ago now I paid my first visit: taking a guide book with me, I flew into Lisbon, planning my route on a map as I flew there!

I discuss the trip in detail in the Portugal Property Buying Guide – you may want to get a copy at www.portugalbuyingguide.com. I have talked to literally hundreds of people who have decided that they want a home in Portugal. I have also contributed to the Portugal Property Buying Guide and it struck me that it may just be useful for me to share with you what I have learnt, both from my own personal experiences and from what I have picked up from listening to the many concerns, experiences and tales shared with me on a daily basis by OGC readers.

So do join me weekly as I chat about various aspects of visiting Portugal with a view to buying property or indeed just to share a few thoughts on the country that I have been visiting for well over twenty years. You never know, there may just be something that will help you, inspire you or just plain bring a smile to your face!