Buying 'Off-Plan' in Portugal
Buying 'Off-Plan' means the purchase of a property that is not yet built - literally off the plans.
Generally new developments are designed to have a mixture of properties, combining apartments, semi-detached and/or terraced houses and detached villas. However, some more exclusive developments consist of collections of villas only which are incorporated into this 'Urbanização' concept. Usually most sites will have show homes (casa modelo) (generally one of each type of property being built) for buyers to look at.
The attractions of buying off-plan are many, and include:
- When the property is completed everything will be brand new.
- The property will be built to the current building regulations and standards.
- There is the possibility for you to choose the fitments, colours, furniture, kitchens, flooring, etc.
- There may well be community elements i.e. golf course, swimming pool, tennis courts, gym etc which you would be able to enjoy.
- The end result may well be worth more than you paid for it.
If you are considering buying off-plan you will need to make sure that you have as much information from the developer and agents as possible... and always consult with your Lawyer.
You will need an initial deposit, followed by 'stage' payments to be made as the construction progresses. Typically the first stage payment will be due about 4 weeks after reservation when a contract is signed - usually 30% of the full purchase price. The remaining 70% - is usually paid in 4 stages as they complete:
- The skeleton of the building
- The shell of the building
- Internal and external tiling and finishing
- Completion
You must obtain a 'termination guarantee' which will commit the developer to finishing each and every stage of the project. This will make sure that not only is the property as you requested but that external elements are also in place i.e. access roads, landscaping, utilities are connected and the project looks like the model you bought from.
You also need to check that what you have been shown is the entirety of the project and not just Phase 1 of a bigger development.
All this should be backed by a full insurance policy.
You can employ an architect or a project manager who is independent of the developer to oversee the construction on your behalf if you are unable to do this for yourself.
From an investors point of view, buying off-plan is often profitable at, or prior to, completion.