How to Buy in Cape Verde

Information

The Process of Acquiring Real Estate in Cape Verde

Acquiring real estate in Cape Verde is an excellent opportunity for investors looking for diversification and security in emerging markets. The country offers a clear and secure legal environment with no restrictions for foreigners, which makes property acquisition an affordable and efficient option.

The national currency, the Cape Verdean Escudo, is pegged to the euro at a rate of 110.265, which facilitates the negotiation of real estate, with all properties being quoted in euros. For UK investors, it is possible to lock in prices in British pounds, avoiding currency fluctuations and unforeseen costs.

Legal Security and Purchasing Process

The notary system in Cape Verde guarantees a high level of legal certainty for the purchase of real estate. The process is transparent, with the use of specialized local lawyers who ensure the veracity of the documentation and compliance with the country's laws.

The use of the CIP (Real Estate and Property Registry) digital system has made the purchase process more agile, offering more security and efficiency in the registration of properties.

How Buying Real Estate Works in Cape Verde

Property Reservation:
When the buyer finds a property and reaches an agreement with the seller, it is necessary to pay a booking fee that can vary between 3,000 euros or 5% of the value of the property, depending on the case. This payment ensures the agreed price and removes the property from the market. The booking fee is non-refundable, except in cases of irregularities in the documentation.
Legal Verification:
After booking, a local lawyer will be responsible for verifying the authenticity of the property's documentation, as well as the existence of any debts or legal issues. The average cost of legal fees is between 600 and 1,000 euros.
Proxy:
In order for the lawyer to act on behalf of the buyer, a Power of Attorney will be required, which can be carried out in accordance with the rules of the Hague Convention or directly in Cape Verde. The cost for the power of attorney is 60 to 100 euros.
Acquisition Fees:
When purchasing a property, the buyer will have to pay a fee of 1.5% on the registered value of the property, in addition to administrative costs such as notary fees and property registration, which add up to around 700 euros. Other costs may include translations and bank fees, as appropriate.
Final Transactions and Deed:
The final payment for the property is usually made directly to the seller, with the process formalized through a promissory contract. In some cases, payment may be brokered by local lawyers, which may incur additional costs.

Real Estate Financing

Obtaining bank financing for foreigners in Cape Verde can be challenging, with average interest rates of 9%. Although local banks are gradually improving conditions, it is recommended that investors seek financing alternatives outside the country, due to the often more favorable conditions.

Ongoing Costs of Ownership

After purchasing the property, the owner should be aware of the following annual costs:

Condominium Fees: If the property is located in a resort or condominium, maintenance fees may vary depending on the amenities of the property. For example, a 2-bedroom apartment at a resort like the Melia Tortuga may have an annual condominium fee of around €2,000, while in a smaller condo, fees can range between €600 and €1,000.
Municipal Tax (IUP): The Single Property Tax (IUP) is charged annually, with amounts varying according to the registered value of the property. For properties worth 100,000 euros, the annual tax is around 300 euros, paid in two semiannual installments.
Utilities: Water, electricity, and gas costs are based on consumption, with values that vary according to use.

Conclusion

Cape Verde represents a unique real estate investment opportunity. With a growing market, expanding infrastructure, and a strategic location, the country offers a safe and profitable environment for investors from different parts of the world. The purchase process is clear and accessible, with the guarantee of a reliable and transparent legal system.

Investing in Cape Verde is not only an opportunity for financial diversification, but also to enter a market with great potential for appreciation and profitability in the medium and long term. If you are looking for an effective way to expand your investment portfolio, Cape Verde certainly deserves your attention.