Under new legislation introduced in 2002 several restrictive measures were introduced meaning that it now isn’t quite so advantageous to buy through an offshore company. Property tax is paid at a fixed rate of 2 per cent (normal rates are from 0.7 to 1.3 per cent) and rental tax is also payable on all properties whether the property is rented or not.
There are still advantages, however, and you should consult with a fiscal expert if you are considering this option. Owning a property through an offshore company is often an advantage when you’re selling, as the sale can be effected much more easily, quickly and cheaply, and it may help to increase the asking price (although a prospective buyer may not appreciate or want the advantages). Some of the advantages include:
There are a few disadvantages in owning a Portuguese property through an offshore company, one of which is the cost of setting up the company and annual fees (although this is potentially less than the possible savings). The cost varies according to who establishes the company and where it’s incorporated, but there’s usually a set-up fee of between €1,050 and €3,240 plus an annual amount (from €800 to €2,450) for administration fees and taxes.