We receive numerous requests for information every day and therefore we have compiled a list of General, Legal and Tax questions which we will add to as we progress.
Buying property in Cape Verde is a simple process (when done correctly), follows the Portuguese model and has some local specifics. The property market has only recently opened to foreign investors and the authorities are experiencing new demands on their resources. This sometimes leads to delays or frustrations, especially if you have invested in other countries where the systems are well established. It can also be dangerous for the unwary if they deal with the wrong people or do not do a thorough due diligence.
- Why should I buy from Geo Cabo Verde Lda?
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The work and the developments we have delivered to our clients is the answer to this question. We have always delivered what we promised and not once we have delivered later than scheduled.
We are part of a group of companies building in East Europe, Italy and Cape Verde. We have the human and financial resources required to complete projects in a complex environment like Cape Verde.
But ultimately we are responsible to you, to Cape Verde and its people and to ourselves, to deliver what we promise. After all, we want you to tell everyone, including us, of your experience when investing with Geo Cabo Verde Lda.
- Are there any restrictions on foreigners buying property in Cape Verde?
Cape Verde is a stable democracy with a growing economy, measured between 8-10% per year. With Geo Cabo Verde Lda, you also benefit from the inherent guaranteed quality of your investment, capital growth and rental yield.
- Is the property freehold?
Yes
- How do I buy a property from Geo Cabo Verde Lda?
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After you have decided on the type of property you want to buy, we advise that:
- You place a reservation deposit to prevent your property being sold to another investor
- You commit to your programme of stage payments
- You only sign the Deed of Sale ("Escritura") when you are satisfied we have delivered on our promises
- Are mortgages available?
These are now generally available for non-residents although the interest rates are higher than those of Europe. We can provide you with information of the banks who are offering these facilities or you can choose your own sources.
- Are the property contracts assignable?
All of our contracts for purchase are fully assignable, after permission from GEO Cabo Verde Lda, which will not be unreasonably withheld.
- Are the developers government backed? e.g. in the event of a developer going bankrupt, do the clients have an insurance to protect there deposits?
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Geo Cabo Verde Lda is part of the GEO group of Real Estate companies which is present on the international market for more than 15 years. The group holds considerable assets and is a solid and reputable European company with many years of track record in developing quality projects in many countries.
In the very unlikely possibility that is event happens, one of several solutions under Cape Verdean law is that every investor is entitled to receive DOUBLE (200%) of all monies invested.
- Are there builder’s warranties? If so for how long?
5 years on structural and hidden defects.
- What is the construction of the building?
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The Santa Maria Gallery, the Santa Maria Apartments, the Vila Ao Mar and the Gassa da Mante Developments are built in the traditional method based on a structure of reinforced concrete, breeze block walls, concrete floors, timber mezzanine floors and timber roof structure.
The Green Valley Village in Sao Nicolao will be built using a steel frame structure cladded with high-quality insulated panelling. Although more expensive to construct than with conventional reinforced concrete structure and breeze block, the steel frame method will enable us to complete construction of buildings at a far higher standard than currently built in Cape Verde and also much much faster.
- How much should I allow on top of the purchase price for additional costs or fees?
We recommend that you budget for an additional 6-8% of the property purchase price for payment of fees and taxes.
- Can I rent out my property?
Yes. Geo will offer a Property Rental programme through a sister company named “Servizi Imobiliari Lda”.
- Also do you have a rental management system in place or a guaranteed rent.
Yes. Geo will offer a Property Rental programme through a sister company named “Servizi Imobiliari Lda” At the moment we do not offer a guaranteed rent but out clients are achieving an average 10% property return.
- Who will take care of my property when I am not there?
There will be a Property Administrator in place to ensure that your property is well cared for in your absence.
- Can I open a bank account in Cape Verde?
Yes and we can introduce you to the local banks. It usually takes less than one hour to open a bank account.
- When does the construction of the “Vila Ao Mar” and the “Green Valley Village” developments start?
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- Vila Ao Mar will start in March 2008.
- Probably the delivery date for the Green Valley Village is Summer/Autumn 2010.
- When will you deliver the “Vila Ao Mar” and “Green Valley Village”?
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- The anticipated date of delivery for Vila Ao Mar is 18 months.
- Probably the delivery date for the Green Valley Village is Summer/Autumn 2010.
- Is the Vila Ao Mar development beachfront?
Yes. It is a front-line development about 25 meters from the sea-shore.
- Who is responsible for the connection of utilities?
Geo Cabo Verde Lda is responsible for the delivery of utilities to every property. For connection, you will sign an individual contract with each provider for the supply and payment of their services, just as in your own country.
- How can we furnish our property?
You can do this yourself if you wish or we can provide full furniture packages to satisfy your requirements, whether you want to live in or rent out.
- Are there lifts in the apartment blocks?
No.
- What are the main risks when I buy property in Cape Verde?
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To minimise the below are the document you should always request when you buy off-plan from developers in Cape Verde:
- Land title is available (title i.e. does the developer own the land and is this transferable?)
- Localisation.
- Planning permission.
- Building Approval.
- Geo Cabo Verde Building Licence.
- No outstanding debts or liens on the property.
- How do I legally buy real estate property in Cape Verde?
The common way to buy property in Cape Verde is through the completion of a "Contract of Purchase and Sale" between the seller and buyer, before a public Notary. This contract must be in the form of a public deed which guarantees transparency, certainty and security to the transaction.
- Is it advisable to have a lawyer?
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Always use a lawyer. Choose an independent lawyer to prevent any conflicts of interest and to represent you in your absence. There are many good lawyers in Cape Verde who speak English and can guide you through the process (see "Legal" section).
The official language of Cape Verde is Portuguese and you should choose a lawyer who is bi-lingual. Contact the Bar Association of Cape Verde for a list of bi-lingual lawyers:
Ordem dos Advogados de Cabo Verde
Tel Nos: + 238 261 9755/6
Fax: + 238 261 9754
- Should I grant a Power of Attorney?
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Yes, unless you intend to be present in Cape Verde to sign the Promissory Contract, the Deed ("Escritura") on completion and to obtain a Cape Verde Tax Card.
If you choose to appoint a lawyer outside Cape Verde e.g. in the United Kingdom, the Power of Attorney must be completed in Portuguese (get a local translation) and must be:
- Signed in front of a Notary Public
- Endorsed (an "Apostille") by the relevant authorities in your own country
- Submitted for legalization by the Cape Verde Honorary Consul
The procedure must be followed in this order or the Power of Attorney may be invalidated.
- What should I expect a lawyer to do on my behalf?
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Under your instructions, your lawyer should:
- Complete the relevant searches at the Land Registry and local Municipal Authority offices for charges against the property or restrictions on title.
- Check that the property has a valid permit of habitation and obtain for you*:
- "Certidao do Registo Predial" -certificate from the land registry.
- "Planta de Localizacao" - official land registry map showing the property's exact location.
- "Certidao Matricial" - Tax Certificate.
(*If the property is not registered, your lawyer needs to obtain: "Certidao Pela Negativa" - a certificate confirming that the property is not registered to any person. "Certidao Matricial para o Efeito" - a certificate from the tax authorities confirming the tax certificate can be issued. In all cases, it is essential to make sure that the property can be both legally occupied and transferred to new ownership.)
- Check that there are no outstanding taxes, debts or bills on the property.
- Apply for a Cape Verde Tax Card and NIF ("O Numero de Identificaçao Fiscal") on your behalf.
- Ensure that the contract specifies all the terms and details of the property purchased. If these are not included, the lawyer may arrange for these to be added.
- With your approval, sign the Promissory Contract of Purchase and Sale ("Contrato Promessa de Compra e Venda") in the presence of a Notary Public in Cape Verde.
- On completion:
- Pay the property Transfer Tax.
- Pay the Notary's fees
- Pay the Registration fees
- Pay the Stamp Duty
- Sign the Deed of Conveyance ("Escritura") in the presence of a Notary Public after the thirty day notice period, which confirms formal transfer of ownership of the property.
(FYI: The Notary will then report the transfer of ownership to the local Municipal Authority, who will update their records by registering the new owner.
It is also advisable for you to draw up a Will in Cape Verde even if you include your property in your Will in your own country.
- What safeguards are there to protect invested monies?
The common way to buy property in Cape Verde is through the completion of a "Contract of Purchase and Sale" between the seller and buyer, before a public Notary. This contract must be in the form of a public deed which guarantees transparency, certainty and security to the transaction.
- What is the language of the contract and what should it contain?
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The official language of Cape Verde is Portuguese. A good developer will always offer a translation in English to ensure that you understand the content.The contract should specify all salient terms and details and as a minimum should include:
- Standard Terms and Conditions
- Start and completion dates
- Warranties or guarantees
- Payment method
- Handling of any retentions
- Procedures for correcting defects(snagging)
- Procedures for Breach of Contract
- Copies of all Certificates
- NIF of both seller and buyer
- Copies of ID/passports or commercial registration documents
- Copy of Power of Attorney
- What are the taxes relating to property in Cape Verde?
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Transfer Tax (IUP): 3% of the attributed value (To be paid at completion).
Annual Property Tax:3% on 25% of the attributed value, which can be paid in one or two instalments.
Inheritance Tax:3% of the attributed value.
Gifts of Property:3% of the attributed value.
Capital Gains Tax: Considering that in Cape Verde 1) land sold for construction is taxable if the sale price is 200% greater than the original purchase price and 2) any other property is taxable if the sale price exceeds 30% of the original purchase price then Capital Gains Tax ("Mais Valia") on property is 3%, based on 70% of the increase in value, excluding the allowances detailed in (1) & (2) above.
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Taxes should be paid within 30 days of signing the Deed. At the same time, a Statement of Capital Gains ("Declaracao de Mais Valais") must be submitted to the tax authorities.
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