How to turn the Algarve home you dream of into reality

It is easy to see the appeal of renovating a property in the Algarve. There are lots of abandoned homes littered around the countryside and in the region’s many charming towns. Many of the rural ruins come with hectares of land, fabulous views, and, of course, space for a pool!

Buy in the historic centre of a town, meanwhile, and you can take advantage of significant tax breaks and financial incentives. Moreover, if rebuilding a ruin is too much of a challenge, there are also older properties that may simply require updating with new bathrooms and kitchens etc.

Ask an expert!
However, if taking on a renovation project in your own country is fraught with pitfalls, attempting one in a foreign country where you may not speak the language or understand the local regulations can be even more risky.

Unless that is, you follow the simple ground rule of “always seeking professional support and only dealing with reputable companies before you commit yourself to buying any property”, says Kenneth Laidlaw, Senior Real Estate Advisor at Engel & Völkers in Portimão.

Relying on a well-established, reputable estate agency to find and buy the property, as well as a good lawyer to handle the buying process, is vital. Having a survey of the property can also be an advantage as the surveyor can identify problems and suggest solutions. This can save a lot of time, money and aggravation, according to Robert Edwards, Director and Partner at Cerro Novo, one of the longest-established estate agencies in the Algarve.

Use an architect and plan for success
He adds that before signing any promissory contract, it is wise to ask an architect to check exactly what can be built in the area and if everything already there is legal or can be legalised with a new project. Get the architect to book a meeting in the planning department of the town hall “so you can join the meeting with a list of any queries that you might have”, adds Robert.

Employing an architect, surveyor or project manager to deal with builders and public authorities is a particularly good idea if you don’t speak good Portuguese, adds Robert. Otherwise, he explains, “the project will probably take much longer and, if not done correctly in the beginning, will lead to increasing costs”.

Kenneth adds that there are architects specialising in the design, approval processes and management of projects involving historical buildings or ruins. “We here at Engel & Völkers are ideally placed to advise you as to who would be the best fit for the type of work you wish to be carried out,” he adds, explaining: “different strokes for different folks”.

Robert says that the architectural process involved in a renovation project will often take a minimum of six months but can also take a year or more, sometimes years. If only the inside is being renovated and the façade isn’t being altered at all, then a simple building licence might be possible and this is cheap and quick, he adds.

He adds that “the actual building timeframe once the licence is granted is usually 4-12 months for a three-bedroom house, depending on what sort of refurbishment is done. If it’s starting from scratch, then it could take up to 18 months due to licences from the town halls”.

Town versus country
Paulo and Joana Martins, owners/associates at ProjSul, an architecture and engineering firm based in Lagoa, say renovating a property in the countryside or near the coast or inside a town entail differing requirements.

Renovating a property in the countryside, say the Martins, is similar but a bit more complicated than building a new house: “Not only must the final design be considered, but also how the old structure has been changed, whilst complying with all current planning laws and regulations.”

Turning a profit on urban projects
There are many ruins for sale in urban areas such as Portimão, Faro, and Silves, say the Martins. Moreover, to solve the problem of urban decline, the authorities (both local and central) have launched various programmes of incentives to attract people back to the old town centres. So, buyers of properties in historic centres can, if certain conditions are met, claim various grants and benefits to help pay for the restoration. It is also possible to benefit from reduced taxes on rental income and on capital gains tax if you decide to sell the property, according to ProjSul.

However, these buildings are subject to strict planning controls. The planning procedures are just the same and as time consuming as for a new building, while you will also have to meet various requirements and go through a number of hoops to obtain any grants and other benefits such as the IVA (VAT) reduction and the tax incentives, according to the Martins.

Kenneth Laidlaw says Engel & Völkers currently has a number of renovation projects in the area of Portimão and a number of plots with ruins suitable for renovation.

Kenneth’s manager Wilfrid Hoos adds that the agency has a number of fully-renovated projects for sale ranging from a former boatyard, an old school, and even a workshop to repair cars that has been transformed by the owner, an artist, into a stunning loft preserving some elements of its past in the interior design.
Kenneth adds that when buying a renovated property, it is vital to be aware of the old adage of “caveat emptor”. He explains that while on the surface all may look pristine, it is important to ascertain whether the plumbing and electrical wiring, for example, has been updated.

He adds that this is where “using a good real estate company like Engel & Völkers can make all the difference. With our local knowledge and vast network of contacts, we can help you to ensure that you are buying the dream and not the nightmare!”

Finding a reliable and competent builder is particularly challenging at the moment given the real estate boom underway in the Algarve. But again, this is an area where estate agents and architects can help. Kenneth says Engel & Völkers, for example, works with a number of companies that they can recommend, while “if you appoint a reputable architect, they will recommend builders that they have successfully used in the past, thus ensuring a quality finished renovation”.

Refurbish rather than rebuild
If you prefer a less challenging project, it is still possible to snap up villas in towns such Carvoeiro that are ripe for refurbishment, says Zoie Hawker, Managing Partner at Fine & Country Algarve, which has offices in Carvoeiro, Almancil and Tavira.

The work could simply involve new windows, shutters, plumbing, kitchen, doors, wardrobes and even floors with the installation of modern heating and cooling. The pool and terraces may also need refurbishing. Moreover, the gardens in old villas are already well established, while “there is no need to involve the town hall”, says Zoie.

That can be a boon given that town halls, due to Covid, are working “slower than a snail’s pace”. In Lagoa, for example, says Zoie, “we waited nearly a year to get a simple alteration project approved, compared to no more than a few months pre-covid”.

“So, my advice,” concludes Zoie, “would be that anyone in a hurry should avoid any properties that require planning permission. But if they are in no rush, then a redevelopment project takes no longer than getting a new-build project approved and they have the advantage of choosing from the best locations.”

Lisa Channing, Marketing Manager at QP Savills, says that many of our buyers “just want to drop their suitcases” and settle into the Algarve life, but many also want to put their own stamp on a property, and they look for properties which require an update with new bathrooms and kitchens.

The agency is frequently approached by developers who do not want to demolish a property completely but take it “back to the external walls” and transform a traditional villa into a modern, open-plan home. This is a much quicker and less expensive process than demolishing a building, which requires a special licence and then rebuilding from scratch.

Lisa adds that QP Savills are currently seeing plenty of buyers who have a budget that includes refurbishing to their individual requirements and tastes.

QP Savills can introduce buyers to builders and architects who can provide guidance on costs and timings. Lisa recommends looking at the builder’s previous work, but ultimately it is up to the buyer to decide which builder they trust and want to use.

Lisa adds that Savills are currently seeing plenty of buyers who have a budget that includes refurbishing a property “in their own style”.

Patience is a virtue
The singer/songwriter Cat Stevens might not be the first name that springs to mind when hunting for property in the Algarve. But the lyrics to the classic ‘Father and Son’ are certainly worth a listen before you take the plunge: ‘But take your time, think a lot; Think of everything you’ve got; For you will still be here tomorrow; But your dreams may not’.

There are plenty of people who will tell you that once you have bought a property, you can do what you like and save thousands, maybe tens of thousands of euros, by taking short cuts.

“It’s what the locals do” has proven a killer line with many wavering buyers. And it is easy to believe when the sun is shining, and life here seems so relaxed. But it simply isn’t true and if you don’t consult professionals, the old adage of “buy in haste repent at leisure” will almost certainly apply, says Kenneth Laidlaw.

Moreover, as Robert Edwards says, “while it’s certainly a challenge to renovate properties, when done correctly and with patience, it can be exceptionally rewarding”.

By Anthony Beachey
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Anthony Beachey is a former BBC World Service journalist now working on a freelance basis in Portugal, where he specialises in economics and finance.