FAQs about buying property in Cape Verde

Buying off plan property or land in Cape Verde is extremely straightforward and is in fact more so than in many other worldwide markets. Although all legal matters will be conducted in Portuguese, in accordance with Cape Verdean law, this proves to be no barrier at all. And, of course, we at Property Club International are on hand to help, every step of the way.

• What are the procedures?
• How much does it cost?
• Taxes

Who can buy property in Cape Verde?

All properties are bought freehold in Cape Verde and all foreign nationals are permitted to purchase land or property in Cape Verde, without exception. In fact, the local government is keen to attract the investor and, as such as, property and ownership laws have been made increasingly investor-friendly. Inward and foreign investment is actively encouraged and the government has taken a proactive stance on putting quality controls in place to prevent the developer disaster stories so often read about in other markets.

What About the Language?

It is imperative that you are in full understanding and full agreement of every step of your property purchase, especially if you are putting pen to paper and signing documents or handing over money. For this reason, you will need the services of a sworn translator who will be able to make clear the Portuguese legalese.

Solicitors and Searches

You will need to hire the services of a local solicitor. All property transactions use Portuguese law and any lawyer qualified in Portuguese conveyancing is allowed to practice in Cape Verde. The majority of lawyers speak English. We have special arrangements with UK and local lawyers for our members.

Searches and Registration

Your solicitor will be responsible for conducting all searches at the local Municipal Authority and Land Registry Offices. These show you whether or not there are charges registered against the property or land or any restrictions on the title. The existence of a valid habitation permit is a precondition for a valid conveyance of built property to take place in Cape Verde. The lawyer will also check the plans so that you are fully aware of exactly what is included in the purchase price. Most properties in Cape Verde are not registered, even though registration is an essential pre-requisite to a purchase. Therefore the lawyer's assistance in liaising with the Real Estate Registration Office is essential in order to ensure the property is duly registered and prepared for foreign purchase. Be aware that registration can take up to four months.

If the property is not registered, it is necessary to obtain a Certidao Pela Negativa (a certificate confirming that the property in not registered in anyone's name) as well as a Certidao Matricial Para o Efeito (which is a tax certificate confirming this). With these two documents, it will be possible to register the property. The registration fees are normally 3% of the purchase price and legal fees are typically the same.

Documentation

Once your property is registered, your lawyer will be able to obtain the following documents for you:

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

Signing the Promissory Contract

The Contract of Purchase and Sale - Contrato Promessa de Compra e Venda is the first official step on the journey to actually purchasing your property. At this stage you will be expected to pay the deposit of between 10% and 30%. Under Cape Verdean law, both parties are contractually bound once this document has been signed. Within it you should find set out the terms of your purchase, including full property details, its price, your agreed method of payment, an official completion date as well as any penalties potentially incurred by both sides. This contract must be notarised and until you have exchanged this contract, the vendor is not committed to the sale. Transfer tax of around 3% is also due at this point.

The Deed of Conveyance

The Deed of Conveyance is locally known as the 'Escritura' and is the document that gives the purchaser a complete title to the property. It must be notarised.

Registering the Sale

Your purchase will have to be registered at the local Land Registry as well as at the local municipal authority to enable official ownership records to be updated. Once the Deed of Conveyance has been signed, the notary will prepare and send a report to the local municipal authority regarding your transaction. The authority will then register the new ownership of the property. Notary, land registration fees and stamp duty are usually around 2.5% of the property's value and are due on signing the Deed of Conveyance. 

Power of Attorney

If you are planning on returning home before the documents above are ready, you will need to give your lawyer Power of Attorney so that he/she can act on your behalf when the promissory contract and deed are signed and so that he/she can request the necessary tax cards. This will have to be done in Portuguese but it is important that you obtain a copy for your own record in your own language. This will have to be notarised as well as legalised by the Cape Verde Honorary Consul in Liverpool. When this has been completed, you can go home, leaving the paperwork in the hands of your lawyer.

How much are legal fees?

The registration fees are normally 3% of the purchase price and legal fees are typically the same. We have special arrangements with UK and local lawyers for our members. Stamp Duty on property is payable by the buyer at 3%. The buyer will also pay a small inspection and measurement fee (approx. 65 euros).

Utilities and connection fees?

You will need to sign a contract with local utility providers and your lawyer will arrange this. It is a good idea to have meters read and confirmed prior to completion. If services are not connected, a fee will have to be paid to enable this to happen. This is rarely more than around £500 in total for all utilities.

Are there any service charges?

Most new developments of villas or apartments that have communal facilities now arrange maintenance and will charge an annual service charge.

Selling Costs

There are no government restrictions on selling your property.

Running Costs

• Annual Municipal Taxes are normally less than £100 p.a.
• Electricity supply is 240 volts AC 50Hz. The power supply is subject to disruption and we can supply back up generators or UPS systems on request.
• Water is by mains supply and in some properties supplemented by wells. Water is stored in your tank which should be large enough for three days supply as some areas are only refilled every other day. Water is normally potable and can also be purchased via tanker.
• Drainage is via individual septic tanks which require servicing every 18-24 months at a typical cost of £25.
• Telephone lines can take several months to be connected but do provide international direct dialing. Broadband is available by satellite but is expensive at present.
• Mobile phones have limited coverage in Cape Verde.

The taxes relating to property purchase in Cape Verde are as follows:

Transfer Tax

A flat rate of 3% on the attributed value to be paid with the signing of the Contract of Purchase and Sale.

Annual Rates

A flat rate of 3% on 25% of the attributed value to be paid annually in April (or in two installments in April and September of each year)

Capital Gains Tax

There is no capital gains tax applied to purchases by overseas property investors in the current Cape Verde tax regime.

Inheritance/Gift Tax

Any property transmitted by inheritance or by gift is taxed at a flat rate of 3% of its value.