Pros and cons of buying and renting property during the latest coronavirus wave in Portugal in 2021.
Whether you live in Portugal and want to move house, or whether you're planning on moving to Portugal, many people will be asking the same question. Is it better to buy or rent property in Portugal in 2021? Is borrowing money from the bank to buy a house the best option during a pandemic? Or does the possibility of being a tenant instead of a property owner bring more advantages in 2021? With the help of DECO, the Portuguese Association for Consumer Protection, we're here to help you answer all of these questions and guide you through this difficult decision making process.
Whether to buy or rent property in Portugal in 2021 is a doubt that is increasingly common due to the uncertainty of the current climate, both amongst national and international buyers in Portugal. People are hesitant about getting into mortgage debt and many people are opting to rent in spite of worries that in the long term, this may mean losing money, while others are taking advantage of low interest rates and think that now is the right time to take out a mortgage.
Historically, and according to official statistics quoted by DECO, the great majority of residents in Portugal generally prefer to buy a house instead of renting. However, various factors have contributed to some cooling off when it comes to taking out a mortgage in Portugal during the years of economic and financial crisis that have been experienced since 2008, a situation which has worsened since 2020 with the pandemic that has led to new cuts in Portuguese income.
The experts at DECO advise those currently looking to buy or rent property in Portugal to consider a number of factors as decisions made now could have repercussions for many years. Contracting a mortgage loan today, for example, usually represents a relationship of often at least 30 or 40 years.
This is one of the reasons that has led consumers in Portugal to favour the option of renting. In this case, for example, tenants would not have to pay the taxes associated with the property, nor are they responsable for maintenance or condominium expenses. On the the other hand, renters will have to manage the end of the lease term and be subject to annual changes in rent in accordance with the updating coefficients and inflation.
By choosing to buy a property in Portugal, you will be accumulating valuable assets for your retirement and to leave to your children, for example, but you will have to pay more taxes, such as IMI property tax, or bear maintenance or condominium expenses. Remember that if you do choose to buy, you will still have to be able to afford a down payment or deposit and you will be tied to a mortgage for a long period of time. Whatever you choose, make sure to do your sums carefully and find the best solution for your situation.