The Republic of Cape Verde with the capital in Praia is located on an archipelago in the Macaronesia, of the North Atlantic Ocean and off the western coast of Africa. Cape Verde is formed by 10 main islands (Santo Antão, São Vicente, Santa Luiza, São Nicolau, Sal, Boa Vista, Maio, Santiago, Fogo and Brava) and about 8 islets (Branco and Razo). All of the islands are volcanic, but an active volcano can only be found on the Fogo island. Cape Verde is a place that has not been completely discovered by a human yet, and therefore a lot of people dream of having a Cape Verde property, so that they can become a part of the untouched nature. There are many endangered species, that can be found in the region, such as birds (Alexander’s Swift, Raso Lark or Cape Verde Warbler) and reptiles ( Cape Verde Giant Gecko), that can be especially appreciated by nature lovers.
Cape Verde has a very rich history. In the past it was a part of the Portuguese empire, served as an important watering station, sugar cane plantation and later as a major center of the slave trade. In 1975 the country achieved independence, so as a young democratic state it is an attractive place for those who want to witness the real its changes and be a part of them. That is why there are some people who decide to buy a Cape Verde properties and experience this incredible transformations.
What makes the place especially attractive as far as possessing a Cape Verde property is concerned is definitely its climate. The country is located in the tropical zone and the average temperatures range from 24C in January and February to 29C in September. Therefore, the place is a perfect holiday destination all year round and more and more people become interested in Cape Verde estate agents offers. You can buy a beach-front property in Cape Verde for the price that is much lower in comparison to most other locations. The country is also a perfect place for the ones who want to invest early, as the country’s property investment market is really fresh. Cape Verde properties can offer great luxury for people who do not even dream of buying a close in such a magical destination, because it is simply beyond their financial means.
HOW TO BUY IN CAPE VERDE
MostProperties always recommend using a lawyer who speaks your language whenever purchasing any overseas property.
Power of Attorney – You will probably need to give your lawyer Power of Attorney so he can represent you when the promissory contract and deed are signed and also to request the necessary tax cards on your behalf. This will have to be done in Portuguese but you should request a copy in your own language. This will have to be signed before a Notary and legalized.
Searches – Your lawyer will carry out land searches at the local Municipal Authority and Land Registry Offices. These reveal whether there are charges registered against the property 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 obtain a number of different document’s including, land registry certificate and the properties tax information during this conveyance.
The Promissory Contract of Purchase and Sale – Signing the Promissory Contract of Purchase and Sale is the next step. At this stage the purchaser is normally expected to pay a deposit, normally between 30%-50% of the purchase price. In Cape Verde, the parties are contractually bound once this Promissory Contract of Purchase and Sale is signed. This sets out the terms of the transaction (property details, price, method of payment, completion date, warranties, penalties, etc.) This contract should be signed before a notary public in Cape Verde. Until this contract is exchanged, the vendor is not committed and can change his mind.
Deed of Conveyance – “Escritura” - The final Deed of Conveyance called the “Escritura” has to be signed before a notary public in Cape Verde. This is the document that gives the purchaser complete title to the Property. The signing of the deed must be scheduled with a minimum of 30 days´ notice.
Tax fees of 3% of the Purchase Price and legal fees would be due at this point.
Registering the Property – The purchase will have to be registered at the local Land Registry and also the local municipal authority. In Cape Verde, subsequent to the signing of the deed, the notary will prepare and send a report to the local municipal authority regarding the transaction.
The municipal authority will then update their records and register the new ownership of the property. Notary, registration fees and stamp duty are usually around 2.5% of the property’s value. These are payable on signing the Deed of Conveyance.
TAX INFORMATION
When you sell property in Cape Verde there are no property taxes to pay except Capital Gains tax. However property purchase is subject to the following taxes:
Cape Verde - Transfer Tax
This is charged at a flat rate of 3% of the property value and is paid prior to the signing of the deed of purchase and sale.
Cape Verde - Holding Property / Annual Rates
This tax is charged at a flat rate of 3% on 25% of the value of the property and is paid annually every April (or in two installments in April and September).
Cape Verde - Capital Gains Tax
Capital gains on plots for construction are taxable if their sale value exceeds a 100% increase of the value at which they were initially purchased.
Capital gains on any other property sale are taxable if their sale value exceeds a 30% increase on the value at which they were initially purchased. The capital gain is taxed at a flat rate of 3% and is payable within 30 days of the deeds, together with the submission of a "Declaracao de Mais Valias" (Capital Gains Statement)
Cape Verde - Inheritance/Gift Tax
Any inherited or gift property is taxed at a flat rate of 3% on the attributed value of the property. For more detailed tax information, please contact us and speak with a specialist Cape Verde advisor.
MORTGAGES IN CAPE VERDE
There are a number of Banks offering mortgages to people purchasing property in Cape Verde. These offers are increasing and changing all the time and we can advise you at any time about the different offers available to you. Below we have illustrated the general terms and conditions purchasers have to comply with.
Size of Loan: Up to 85% of the purchase price. Size is adjusted according to income. Repayments should not be more than 35% of annual income.
Interest Rate: Between 7.5% - 8.5% depending on lender, size and type of loan.
Term of Loan: Up to 35 years depending on age of applicant.
Arrangement Fees: Between 1% - 1.5% depending upon lender.
Redemption Fees: Between 1% - 2% of capital.
Information: Last 6 months bank statements, proof of address (eg. Utility bill), letter of reference from current bankers, letter from employer stating status length of employment and gross annual income supported by 3 most recent pay slips.
If self-employed, last 3 years accounts.
FREQUENTLY ASKED QUESTIONS
Q: Are there any Restrictions on foreigners Buying property in Cape Verde?
A: No, the Cape Verde government welcomes foreign Investors. More importantly, you will be treated as a local and be subjected to the same laws.
Q: Is property Freehold?
A: Most property in Cape Verde is Freehold title however whatever investment you are considering in Cape Verde,
Always check:
• Full title is available and clear
• Planning approval has been granted
• The developer has a building license
Q: Is it advisable to use a Lawyer?
A: Always, and choose a reputable independent lawyer with no ties to the developer to prevent any conflicts of interest. There are many good lawyers practicing Cape Verde law both in Cape Verde and in the UK. MostProperties specialists will advise on the reputable legal partner.
Q: Are mortgages available?
A: These are now generally available for non-residents although the interest rates are higher than those of Europe. Most Properties can provide you with further information about the banks offering these deals, should you require one.
Q: How much should I allow on top of the purchase price for additional costs or Fees?
A: We recommend on allowing approximately 6.5% of the property purchase price for payment of fees and taxes.
Q: Who is responsible for connection of utilities?
A: The developers are normally responsible for delivery of utilities to every property on their projects. For connection, you will sign an individual contract with each provider for the supply and payment of their services.
