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Portuguese Chamber of Commerce
3rd Annual Conference on Portuguese Property and Tourism
The UK’s enthusiasm for Portugal continues - 70,000 Britons own homes in Portugal and there were almost 2,000,000 visits in 2006.
Over 100 delegates attended the 3rd Annual Conference organised by the Portuguese Chamber in London. This conference has grown each year in scope and size, reflecting the widening interest in Portugal for Tourism and Residential Property.
The Conference was held in the Auditorium of Withers Worldwide LLP, the international law firm located in the City of London. David Dannreuther, a partner at Withers welcomed everyone and set the scene.
HE Mr Antonio SantanaCarlos, the Portuguese Ambassador, opened the conference, remarking on the significance of tourism and residential property to the Portuguese economy and the government’s recognition of its important benefits.
Jorge Armindo Teixara, CEO of Amorim Tourism, travelled especially from Portugal to act as Chairman of the Conference. He introduced each of the eight speakers who examined different aspects of this economy.
First on the podium was Luís Correia da Silva, former Secretary of State for Tourism in Portugal. He explained how projects of national importance from the private sector are recognised and promoted through the PINS system, describing the criteria used and how the system works. It was not only projects of over €25m which qualified but also below that if they met four of the seven requirements. The PIN status gives a project a single contact point with the government and a speeded up approvals procedure.
Portugal is proud of the fact that estate agents, builders and developers are carefully regulated. Claudia Assis de Almeida, a member of the board of the government agency IMOPPI, analysed the effects of the forthcoming regulatory changes. She also explained that from May 2nd IMOPPI will be known as InCI - Institute of Construction and Real Estate, and will boast a largely internet based system for applications for licenses. The scope is also being expanded to cover real estate promotion and condominium management.
The recent changes which have relaxed the taxation laws on Overseas Holding Companies for property were explained by Ana Salvador Cristovao, a specialist from the Lisbon law firm Braganca Bruno & Associados. The taxation of properties in Portugal owned through an overseas company in a tax haven (a so-called blacklisted company) has been considerably reduced in the 2007 budget. Ownership through a company has advantages of flexibility in transfer and ownership as CGT is not charged on shares. Some companies, based outside Portugal but within the EU, and classified as “white-listed” companies, have been taxed the same as a non-resident owner, whilst black-listed companies have paid tax at higher rates. The rate of IMT (transfer tax) for “black-listed” companies has now been reduced from 15% to 8%. Ana Cristovao concluded by pointing out that the UK Chancellor had just announced that UK benefit in kind legislation would also not apply to most such companies.
The expanding Portuguese market has had much interest from Ireland and other EU states as well as from UK buyers, where the long alliance with Portugal has made for a happy partnership. Antonio Silva, London director of the Portuguese Trade & Tourism Office, reinforced the high degree of tourism inflows into Portugal in his regional study of the Algarve and its continuing success. In 2006 the Algarve took 38.5% of the bed-nights in Portugal and over 1 million rounds of golf were played in the Algarve, representing 3 out of every 4 rounds played in Portugal.
Paul Donoughue, director of Special Projects at Savills Plc, detailed the factors involved in making a development attractive to buyers from the UK and EIRE, and Brian Eustace, Executive Director of the INTA Group, analysed the reasons for Portugal’s big attraction for the golfer. He suggested that this was not simply climate or history based but that the economics and style of clubs was also important.
An insight into the Irish investor’s view was given by David Hanrahan of OMG Investment & Finance. He described three different buyer profiles in Ireland each looking for different returns and time scales. He identified that typically an Irish investor allocation was about 71% property based, with equities only 16%. He also remarked on the Irish buyers’ confidence in buying off plan.
An overview of the wide range of funding options available to buyers of Portuguese property was given by Tom Foster, International Mortgage Adviser at Conti Financial Services, and the criteria applied by lenders in different countries.
Jorge Armindo Teixeira brought the speaker sessions to a close by summarising the main themes of the conference and how they fitted in with his experience as CEO of one of Portugal’s largest hotel and property groups. After the conference delegates were given an opportunity to network during a drinks’ reception sponsored by Banco Santander Totta and Banco Espirito Santo.
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