Cape Verde Property Buyers GuideCape Verde has become a "property hotspot" in recent years as property investors seek to get in early in a rapidly developing tourist destination.
This is not intended to be a definitive guide to the legal side of making a purchase, but rather an introduction to the process of purchasing a property in the Cape Verde Islands.
Proper Legal Advice
First and foremost, always use a Lawyer that speaks your language and use a sworn translator if you do not speak fluent Portuguese.
Once you have decided on the property that you would like to purchase and before you sign the promissory contract, your Lawyer will perform searches with the Local Authority (to check for any unpaid charges) and at the Land Registry (to check that the seller is entitled to sell the property). In the case of an existing property, the documents that your lawyer should obtain are the Certidao do Registo Predial (the land registry certificate), the Planta de Localizacao (town plan map with the location of the property), the Certidao Matricial (tax information certificate) and a valid habitation permit.
If the property has not been previously registered (as with a new build) then it will be necessary to obtain a Certidao pela negativa (confirming that the property is not registered) and a Certidao matricial para o efeito (tax certificate confirming that it is not registered).
Your lawyer should also confirm that all utility bills have been paid, otherwise you, the buyer, will be liable for these after the sale.
A Cape Verde tax number (Numero de Identificašao Fiscal) and tax card need to acquired in order purchase a property in Cape Verde.
Making the Purchase
The first step is the signing of the Contrato Promessa de Compra e Venda - a legally binding promissory contract that sets out the terms of the sale. This is accompanied by a deposit of between 10-30% of the sales price. Once this is signed, both the buyer and seller are legally bound to complete the sale. A 3% Transfer tax needs to be paid at this stage (IUP).
The actual deeds of conveyance (Escritura) are signed before a public notary (which will take place some time after the initial promissory contract is signed).
Notary fees, registration fees and stamp duty are paid at this stage and will amount to roughly 2.5% of the sales price.
The final stage of the purchase is the registration of the property with the Land Registry and the Local Authority.
When buying off-plan, it is usual to begin the process by paying a small reservation deposit, followed by staged payments as the work is completed.
Capital Gains Tax
Capital Gains Tax (Mais Valia) of 3% is due if the value of the property has increased by more then 30% since it was purchased.