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28 June, 2016
Cape Verde is a collection of ten islands and five smaller islets, located around 400 miles off the coast of Senegal. Blessed with a warm climate and soft white sand on many of the beaches, it has been rising to prominence in recent years as a destination for holidays and second homes. It has also been gaining popularity as a property investment hotspot, particularly since a surge in prices around 2006.
If you are considering investing in property for sale in Cape Verde, there are a few things you should know and understand.
About Cape Verde's Property Market
A lot of foreign buyers purchase properties in Cape Verde for personal use and capital growth, though buy-to-let is also a popular option. While the fact that Cape Verde's rental market is still a rather young one makes it difficult to predict yields accurately, local agents say that some areas and property types can deliver up to 9%. Property prices can be quite variable, depending on the location in which you are buying (for example properties for sale in Boa Vista can be more expensive then in Sal) , but generally Cape Verde is cheaper than similar destinations at present, while infrastructure plays catch-up with the rapid rate of development and holds prices back. Due to the amount of new development taking place on the islands in combination with high demand, the majority of available opportunities, particularly for investors, are off-plan.
The Buying Process
Cape Verde is a former Portuguese colony, and much of the property purchasing process has been inherited from Portugal. All Cape Verde properties are sold on a freehold basis. The first step is a verbal agreement, followed by relevant checks and searches to be carried out by the buyer's legal advisor. A provisional contract will then be signed and a non-refundable deposit will be handed over by the buyer, generally representing at least 10% and no more than 30% of the property's value. Once the conditions of this contract are fulfilled, a final contract will be signed, witnessed by a Notary Public, and the rest of the price will be paid. Registration with the tax office and Land Registry can take place 30 days later.
Various fees and levies will be incurred by this process, usually reaching about 6% of the property's value. Notably, these include a 3% flat-rate transfer tax, along with stamp duty and registration fees.
Using Your Property
If you are buying a property for personal use, you will need to have the right to enter Cape Verde on an appropriate basis. If your property is serving as a holiday home, you will need a valid passport and a visa for your stay. Visas are issued for stays of up to 90 days at most. If you want to make use of your property for longer periods, then you may be able to seek residency. There are several grounds under which foreigners can obtain the right to reside in Cape Verde, including:
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