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PORTUGAL IS ONE OF THE TOP TEN COUNTRIES IN THE WORLD TO RETIRE

International Living having been seeking out the best retirement destinations for the past 35 years, and this year found that Portugal is worthy of the long-standing view that it is one of the best places in the world to retire. In compiling its rankings, International Living looks at climate, cost of living, retiree discounts, infrastructure, accessibility of health care to compile their Annual Global Retirement Index and say they look precisely at best opportunities worldwide for retirement living.

Editors at International Living compile, rank, and rate a series of criteria including cost of living, infrastructure, healthcare, fitting in, real estate, special benefits and climate for an assessment based on real-world data gathered on the ground. In singling out Portugal, International Living explains that as “one of the smallest countries in Europe, Portugal is one of Europe’s best-kept secrets. Many fall in love with this little country due to its near flawless weather, an abundance of golf and water sports, and superb fresh food.” Placed just behind Spain in the rankings at number ten, researchers explain the relatively low cost of living here is also a big draw for those who choose to live in Portugal, compared with other European nations, goods and services are still bargains. It adds that “the locals are warm and welcoming to foreigners, making a living here very enjoyable.”

The report on Portugal continues by arguing that “if your dream European retreat includes golden sand beaches, almond groves, picturesque castles, and little frontier towns on wooded hilltops then Portugal is the place for you. Slumbering abbeys, pilgrim shrines, and ancient castle towns are dotted inland while traditional fishing towns of narrow alleys and old houses stand proudly on the coast.”

It also makes reference to relatively affordable property, highlighting the value for money deals currently available along the Silver Coast or the Alentejo. Researchers also found that living in Portugal is relatively affordable compared to its European counterparts, making reference to the below average joint cost of utilities, the price of coffee or a dish of the day. The International Living Retirement Index is topped by Panama, followed by Ecuador, Mexico and Costa Rica.

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WHAT IS THE MOST COMMON FORM OF SECURITY TAKEN OVER REAL ESTATE IN PORTUGAL?

There is three standard security taken over real estate: voluntary mortgage, retention of title and seizure. Concerning mortgage, it should be formalised through public deed or by a certified private document. To produce its legal effects, a mortgage must be registered at the land registry office. As for the retention of title, it should be incorporated using a duly authenticated contract or public deed and is also subject to registration at the land registry office so it can be used against any third parties. Finally, a seizure is done through a lawsuit and is not subject to specific conditions. The mortgage is by far the most widely used security.

WHAT IS A PLEDGE?

A Pledge is a security for an obligation to ensure that payment will be made by selling some specific assets of the debtor. Under Portuguese law, a pledge (penhor) may be created over cash or fungible securities. To be valid, a pledge depends on delivery of the asset or assets to the creditor or the third party as a trustee or bailee. There are two types of pledge: civil and commercial. A commercial pledge is a pledge between entities or individuals subject to the regulations of the Commercial Code. These will be individuals with the capacity to carry out commercial acts or entities that engage in commercial activities. In general, the requirements for a civil pledge are somewhat stricter than those for a commercial pledge. A civil or commercial pledge may be used depending on the status of the parties. In practice, a civil pledge is more likely to be used.

I FOUND THAT THE PROPERTY I PURCHASED HAS DEFECTS, WHAT CAN I DO NOW?

Every consumer purchase is covered by a mandatory legal guarantee. As long as you are a consumer, no seller can claim otherwise. Legally, the property must not suffer from any defect which has a negative impact on its value or which renders its regular use impossible. If these warranties are breached, the consumer can choose between repair, replacement, refund or a price reduction. However, the buyer must notify the seller of defects within one year of their discovery. If the property is newly built, the purchaser will also benefit from a five-year warranty period. According to Art. 1225 of the Civil Code, the seller is liable for damages in respect of certain defects during five years, if he has also constructed, repaired or modified the building.

Corporate tax rate reduction

The State Budget for 2015 lowered the corporate income tax rate to 21% (it was 23%). Corporate tax is a tax levied on profits derived by both resident and non-resident entities. This decrease corresponds to a loss of tax revenue of around EUR 200 million. The aim is to create conditions to attract foreign investment. It is important to note however the adding of the state tax (between 3% and 5%, depending on the amount of taxable income) and the municipal surcharge (up to 1.5%) wich give a real tax rate of around 25%.

NUMBER OF NEW COMPANIES RISES

Business formation with new businesses having been started in Portugal went up in 2017. Over 3,687 new companies were registered in Lisbon (14.5% more than in 2016), while Porto registered 7,107 new firms (5% up on the previous year). On the other hand, business failures in Portugal fell 12.7% in 2017 compared with 2016 to 6,284, while the number of new companies being set up rose 9.1%, to 40,465. Lisbon and Porto saw the highest number of bankruptcies – 1,683 and 1,330 respectively, but these were still 2.4% and 15.4% lower than in 2016.