The buying process in Cape Verde

Here’s a quick guide to the process. At the appropriate time, we can discuss any aspect of this in detail with you.

In this section, we'll talk about:

Choosing Your Lawyer
The Reservation Fee
Searches, Checks and Diligence
Private Purchase Contract
Stage Payments
Completion
Taxes and Fees

So, let’s get down to it…

Choosing Your Lawyer

You will need to appoint a lawyer and we can put you in touch with a suitably qualified company to assist you if you haven't already appointed someone. The key thing is to understand everything that you are given to sign –your lawyer will be able to help you with this.

Whoever you appoint must be qualified and experienced in the local law and able to speak both fluent Portuguese and English. Your existing UK lawyer is probably not the person for the job!

On selected developments, the cost of your legal fees will be covered by us. (Currently Dunas Beach - but do check with us for up-to-date info. Other bonuses may be also included... and, as ever, we have to say, "terms apply"!)

The Reservation Fee

Once you’ve found your dream home in the sun, you pay a reservation deposit of typically £2,000 to £4,000. This fixes the price that you will pay and removes the property from the open market.

Searches, Checks and Diligence

Once you’ve signed the reservation form, your lawyer will undertake preliminary checks with regard to both the purchase contract and the legalities of the property itself.

This includes local municipality searches and the Land Registry – to check for charges on the property and any restriction on the title, planning consents, etc.

The lawyer will obtain the following documentation:

Certidao Matricial (the tax information certificate)
Planta de Localizacao (the official map showing the property's exact location)
The Certidao do Registo Predial (the land registry certificate)

But if the property is not already registered, the following documentation:

A Certidao Pela Negativa (a certificate confirming the fact that the property is not registered)
A Certidao Matricial Para o Efeito – the corresponding tax certificate

Private Purchase Contract

Around twenty eight days later, the next step is to sign the Promissory Contract of Purchase and Sale - Contrato Promessa de Compra e Venda.

Up to this point, no binding commitment to proceed is in place. Once this is signed this is a legally binding contract for both you and the seller to complete the purchase transaction.

Your lawyer will normally have explained everything about the contract to you but, in particular, make sure you fully understand what you will have to pay and when each payment becomes due.

Stage Payments

On signing the contract the first stage payment becomes due. Typically, this will be thirty percent of the purchase price. Property transfer tax becomes due now, although this can often be deferred to completion.

With properties that are still to be constructed, a schedule of further stage payments will have been agreed, and it’s usual to pay the 2nd stage payment six months after you’ve paid the reservation fee.

There may be a further stage payment during the build or you may have nothing more to pay until completion. The payment structure will vary with each development.

Completion

At the agreed point, you complete the transaction by signing the Final Contract (Escritura Publica de Compra a Vende). And then your purchase is registered with the Land Registry to confirm your ownership of the property.

On completion, it’s your responsibility to have the funds available – either from cash or via a mortgage lender – perhaps even via a combination of the two!

You’ll also have to arrange for the transfer of funds to Cape Verde (which we can help you with via our foreign exchange trading partner).

The taxes and legal fees will be paid at the same time as you pay the balance owed on your property.

Contracts will be signed in front of a Notary. If you don’t want to be (or can’t be) present at the signing, you will need to give your lawyer Power of Attorney to act on your behalf.

Note that a Notary will make checks on aspects of the transaction and ensure this is all done correctly but is not there to look after your interests as they are a neutral party to the process. Do not assume that if a Notary is involved in your purchase this removes the need for you to have a lawyer – it doesn't!

Taxes and Fees

In overview, the buying costs are:

Legal fees – around 2%
Stamp duty - 2%
Registration and notary fees – around 3%
Transfer tax - 3%
Conveyance tax - 2%
Mortgage arrangement fees – vary according to mortgage product used

Overall, budget around 12% more than the cost of the property to cover your total cost.

Payment timings

In addition, be aware of the following payment timing considerations:

Reservation fee usually £2000 - £4000
30% - 1st stage payment within 60 days
20% - 2nd stage payments within 6 months
Further stage payment as agreed with builder
Final payment and fees on completion

Currency convertor

Insurance and wills

Don’t forget, that it would be prudent to make sure you have adequate building and contents insurance cover in place ready for when you take legal possession. And, if you have a mortgage, organise life assurance, too.

Whether you buy a detached property or, say, an apartment, the property will be freehold. You will own the property and the land it stands on – or a share of the land it stands on for apartments, townhouses, etc.

Side note – talk to your lawyer about revising or making a new will. Foreign property ownership, a possible change of domicile and different laws on succession may have implications for you and your descendants.

You could potentially need two wills, one for Cape Verde and one for assets elsewhere. (A Cape Verde will should make obtaining probate much simpler.)