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As with many other European destinations, though, there are costs associated with buying property in the Algarve which should be factored into your plans if you are thinking of that perfect holiday or retirement home.  Travelling from the UK to Faro is relatively inexpensive and generally quite swift – 2½ hours from most UK airports.  The cost of living and buying property in the Algarve is, for the most part, around 70%-80% the level you would expect in the UK.

However, for those looking to move permanently to The Algarve you will undoubtedly need to install a satellite system to receive the news and your favourite programmes in a language you can understand.  And getting house repairs done locally from someone who can understand you and communicate effectively with you may not be as easy or cheap as getting them done from a local – not surprisingly, English-speaking tradesmen can sometimes charge a premium simply because they are in shorter supply and hence have less competition.

The language issue always needs to be considered when buying property in a non-English speaking territory as legal documents, tax forms and similar papers may need to be translated for you.  Whatever you do, never sign something you do not understand – the costs of translating rarely outweigh the risks of signing a foreign document you cannot read.  

As well as all the legal and transaction costs associated with buying a property on the Algarve do not forget the tax issues.  You will not be able to own property in Portugal unless you have a personal tax number and are registered with the tax authorities – irrespective whether you intend to live there permanently or never visit the country again.  Once you own assets in Portugal you will need to be tax registered.  Furthermore, as the legal system does not automatically recognise UK laws you will need to make a local will to avoid costly problems transferring ownership of the property if you die.  Even if you are married the property may not simply transfer into the ownership of your spouse, especially if you have children.

Finally, and most importantly, don’t forget to plan how and when to transfer your money across.  Leaving this to the last minute and assuming your bank will always give you the best prevailing rate can cost you another 2%-3% of the price compared to planning it in advance and using a specialist money transfer company.  Similarly, if you are moving to the Algarve and planning to have money (e.g. a pension) transferred over regularly these companies can save you a bundle in the course of a year.