House Hunting in ... Portugal

By VIRGINIA C. McGUIRE
Published: January 19, 2011

A TWO-BEDROOM APARTMENT IN AN 18TH-CENTURY BUILDING WITH RIVER VIEWS IN LISBON 1.1 MILLION EUROS ($1.48 MILLION)

This apartment, one of six in its 18th-century building in the Lapa district, was restored three years ago using antique materials salvaged from other historic buildings. The apartment has prime views of the Tagus River and the dark red 25 de Abril Bridge, which is often compared to the Golden Gate Bridge in San Francisco. Other windows in the apartment, set on the third floor, overlook historic buildings and Lisbon’s cobbled streets.

The entryway provides access to a bathroom and a galley kitchen, which has a gas stove and brushed steel hardware and countertops. The living/dining room is 750 square feet in size, with a painted wood ceiling and recessed lighting. The dining room has a chandelier and wide-plank floors.

Both bedrooms have built-in window seats and closets, as well as en-suite baths; the master bath is tiled with pink marble. Walls in both rooms are lined in antique tile.

The building has an elevator and a marble staircase with ornately wrought railings. This apartment shares the third floor with another unit.

Lapa is one of Lisbon’s most affluent areas, known for its well-preserved architecture. Because it sits on top of a hill, it survived floods that submerged much of the city in the 18th century. The neighborhood is home to several embassies, as well as a thriving arts community. The upscale shops and nightclubs of the Chiado district are a five-minute walk; the airport is a 10-minute drive.

MARKET OVERVIEW

The property market has been buffeted by the global economic downturn, according to Paul Houston, who manages Portuguese operations for the Barcelona-based real estate firm Lucas Fox. Prices have been flat over the past year, and tight lending restrictions continue to suppress the market, he said.

In Lisbon, the average price per square meter is about 2,100 euros ($260 per square foot, at 0.75 euros to the dollar). Upscale apartments in Lapa run about 4,500 euros per square meter; this apartment, priced at 7,500 euros per square meter, is much more expensive because of its restored historic building and views of the river, according to the listing agent.

Georgina Richards, a sales associate with the London real estate company Knight Frank, says prices have fallen 30 percent in the western Algarve region, and slightly less than that in the central Algarve; both are popular second-home destinations along Portugal’s southern coast. She says that while foreign sellers tend to lower prices in response to market conditions, Portuguese buyers are more likely to stick to their prices and wait for the market to recover.

WHO BUYS IN PORTUGAL

In Lisbon, buyers come from “throughout the English-speaking world,” including Britain, the United States and Canada, said Gonçalo Figueira, a lawyer with Neville de Rougemont & Associados, a law firm in Lisbon that specializes in advising foreigners on real estate transactions.

British, German and Scandinavian buyers are common in the Algarve, Ms. Richards said.

BUYING BASICS

Foreign buyers must apply for a Portuguese tax number, Mr. Figueira said. During this process, they must have a Portuguese resident acting as their representative; Mr. Figueira says that law firms, accounting firms and property management firms often perform this service, for a fee.

Transaction costs include a 6 percent transfer tax, according to Nuno Durão, a senior sales consultant for International Realty Group Christie’s Great Estates in Lisbon. Buyers also pay 250 to 300 euros for deed registration, as well as legal fees of about 3,000 euros. He says the real estate agent’s commission ranges from 3 to 5 percent, and is paid by the seller.
WEB SITES

Official Portugal tourism site: visitportugal.com

Lisbon Tourism Association: visitlisboa.com

The Portugal News: theportugalnews.com
LANGUAGES AND CURRENCY

Portuguese; Euro (1 euro = $1.34)

TAXES AND FEES

A municipal tax equal to 0.5 percent of the assessed value is charged annually, according to Mr. Durão. Maintenance is 70 euros a month.

CONTACT

Nuno Durão, International Realty Group Christie’s Great Estates, 011-351-910-488-602; irgportugal.com.

View original article: http://www.nytimes.com/2011/01/20/greathomesanddestinations/20gh-househunting.html?_r=1