Banking institutions in Portugal have several home loan solutions, according to the customers’ situation. as is the case of Portuguese emigrants residing abroadbut want to buy a house with a mortgage in their home country.
Credit for emigrants works, as a rule, from similar to a housing loan for residents. However, there may be institutions that hinder the realization of this credit.
Let’s see then how it works a housing loan for non-residents: how to hire, what obstacles you may encounter, the conditions that can be presented to you and the documents you need to deliver.
I want to buy a house in Portugal, but I live abroad
If you want to buy a house in Portugal, residing abroad, does not find any obstacles. This is because most Portuguese banking institutions allow operations to be carried out at a distance through telephone answering services.
But it is also possible to access agencies of Portuguese banks in the main foreign cities. So you can check if there is one in the city where you live to consult conditions.
However, since, in case of non-compliance, it is more difficult to take legal action in housing credit for non-residents, some banking institutions may not approve or be more demanding under the credit conditions.
How to take out a housing loan as an emigrant?
Firstly, to take out a mortgage loan as an emigrant, it is necessary to have some connection with the Bank of Portugal. It could, for example, be an account opened with a Portuguese bank.
This kind of account for emigrants has, as a rule, specific products and conditions considered good in terms of deposits and financial products. Through this account, it is also possible to benefit from the exemption from the Municipal Tax on the Onerous Transfers of Real Estate (IMT).
Bear in mind, however, that to hire an account for emigrants, it is first necessary to have the emigrant status.
Then, as a rule, the evaluation of a housing loan for non-residents will depend on the same factors: customers’ economic profile, characteristics of the property and the credit institution’s financing policy.
If the banking institutions are more demanding regarding the conditions proposed for being a credit for emigrants, they can then limit: the maximum amount financed, the percentage of financing or the maximum payment term.
What can I expect from home loans in Portugal?
Since the conditions for a housing loan for emigrants are usually similar to a loan for residents (if the institutions are not more demanding), let us recall the funding limits in Portugal.
If it is a permanent and own dwelling, currently, the banks finance between 80% and 90% of the purchase price of the property.
However, if it is a second homeas it is a high risk for the institution, the percentage of funding can go from 70% to 80% of the purchase price.
The documents required for contracting a housing loan as an emigrant are the same as for a loan for residents. Although, some additions may be requestedfor being outside the country.
Then, the following documents can be requested:
- Identification Document or Passportto access the Tax Identification Number (NIF);
- Proof of income: such as the last income statement, the credit responsibilities map of the country where you live, the last 3 income receipts, the employer’s statement with the type of contract and age, bank statements for the last 6 months, or, if any other loans, proof of payment in the last 6 months.
- Documentation relating to the property: copy of the Promise Purchase and Sale contract, with details of the conditions, deed or building document of the property.
If the documentation requires certified translationfrom the language of the country of residence to Portuguese, note that the cost is borne by the customer.
What if, after buying a house in Portugal, you emigrate again?
If, after buying a house in Portugal through a mortgage loan, you want to emigrate again, you must give up the domiciliation of salary. One of the products required in a Portuguese home loan.
This is because, from the outset, if you are going to work in the country where you are going to reside, especially if it is outside the European Economic Area, you will feel need to open a new account. For bureaucratic reasons, it will then be easier to receive your salary in the account you open in a bank in the country where you will reside.
Therefore, you should wait for a increase in fees and spread of your home loan and, consequently, an increase in the benefit paid for it.
If you choose sell the houseremember that you may have a aggravating factor in the IRS taxation of capital gains, when changing your tax residency to another country. Although, if you reinvest the purchase sale value in a new home permanent within a country of the European Union, is exempt from capital gains tax.
Also read: Housing and Emigration Credit: what you should know