My understanding of serviced/touristic apartments is that they are freehold units, but you cannot live in them yourself. Then will they be harder to sell compared to freehold residential units?
It may depend on the type of touristic apartment that you purchase, and what is in the contract, whether you can or can’t live in it full time. Full time occupancy is an option for the touristic apartment I purchased. I simply need to let them know I will be there and also pay the service fees out-of-pocket when I’m there.
I’ve not had any personal experience selling a touristic apartment so I can’t speak to your second question authoritatively. There is probably a smaller and different pool of potential buyers than for residential units. It likely comes down to whether the apartment is well managed, in a good/attractive location, and if it is generating income.
It depends on what the purchaser/investor is looking for. Without the GV program I would look at it with the lens of a pure investor. They would be looking at the purchase price and the yield they would get from that investment compared to other opportunities.
Hi Jeff,
Last year we too bought a touristic apartment in Lagos. We are under a 4 year contract and were told after that time, we can live there full time if we wish (plus the service fees) or renegotiate another rental contract. We bought ours to qualify for the GV. TKRunning sent in the final text draft for the GV changes. Page 94 talks about a CEAL tax of 15% and it mentions exploration properties. Would the touristic apartments fall under that category?
Here is the link: https://community.nomadgate.com/uploads/short-url/vJCm3ewTMzmHkIS9INPoGvCjfJ5.pdf
What are exploration properties? Does it include hotels as well?
I honestly don’t know. I hope not as we already pay 28% rental income on the 5% and paid a huge amount of taxes for purchasing a commercial property,
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Had not seen anything about this new CEAL tax until you brought it to my attention. I’m going to have to check with my real estate contacts and see what they have to say about applicability to touristic apartments in the Algarve.
It is definitely not in my contract. This CEAL tax is something new the Govt is imposing, but hopefully it does not apply to us. The wording is a bit ambiguous and I could have read it wrong. It is on page 94 if you want to take a look.
I will let you know if I hear anything and would appreciate it if you will do the same. I haven’t found anyone who made the same type of purchase, so it’s nice to have someone to share information.
We just bought ours last October, so fairly new in our contract.