The Property Banks Buyers Guide to Cape Verde
The
process of purchasing property in Cape Verde generally involves the
following steps:
1. Carry out Land Charges Searches at the local Municipal Authority
and Land Registry Offices.
These will reveal whether there are charges registered upon the
property or any restrictions on title. The existence of a valid
habitation permit is a precondition for a valid conveyance of built
property to take place in Cape Verde and the existence of such
permit presumes that a valid building licence was issued previously.
The documents, which should be obtained, are the "Certidao do
Registo Predial" (land registry certificate), "Planta de Localizacao"
(official map with the property's exact location) and the "Certidao
Matricial" (tax information certificate).
If the property is not registered, it is necessary to obtain a "Certidao
pela negativa" (a certificate confirming that the property in not
registered in anyone's name) and a "Certidao matricial para o efeito"
(a tax certificate confirming this). With these two documents, it
will be possible to register the property.
2. Check the payment of tax regarding the property, and bills for
electricity and other services by asking the vendor to produce
evidence of payment of such invoices.
3. We will also need to obtain a power of attorney from you to
represent you in the promissory contract and deed, and also to
request the necessary tax cards on your behalf. We will draft the
power of attorney in Portuguese and attach a translation to English
for your perusal
This document will have to be signed before a Notary and duly
legalised by the Cape Verde Honorary Consul in Liverpool before it
is returned to us. Please note that we may deal with the
legalisation of this document on request.
4. Obtain a tax card on the purchaser’s behalf.
5. Sign the Promissory Contract of Purchase and Sale ("Contrato
Promessa de Compra e Venda").
At this stage the purchaser will normally be expected to pay a
deposit, which is negotiable (10% or lately 30% is common practice).
In Cape Verde, the parties are contractually bound on signature of
this Promissory Contract of Purchase and Sale, which sets out the
terms of the transaction (property details, price, method of
payment, completion date, warranties, penalties, etc.).
This contract should be signed before a Notary Public in Cape Verde.
Until such contract is exchanged the vendor is not committed and can
change his mind.
Payment of the property tax called "IUP" tax, respecting the
transfer.
6. Sign the final Deed of Conveyance called the "Escritura" which
has to be done before a Notary Public in Cape Verde. This is the
document that gives the purchaser proper title to the Property. The
Deed must be scheduled with a minimum of 30 days' notice.
7. Register the purchase at the local Land Registry and local
Municipal Authority so that title is enforceable against third
parties. In Cape Verde, subsequently to the signature of the Deed,
the Notary will prepare and send a report to the local Municipal
Authority regarding the transaction. The Municipality will then
update its records accordingly and register the new ownership of the
property.
Notarial and registration fees and stamp duty can be expected to be
approximately 2.5% of the property's attributed value. They are
payable on signature of the Deed of Conveyance.
8. Services A contract needs to be signed with the providers of
services, such as water, gas and electricity. We do not normally
arrange this for clients, but can assist on request. Clients are
advised to arrange for final meter readings to take placed prior to
completion.
9. The Taxes regarding Property can be listed as the following:
Transfer Tax – flat rate of 3% on the attributed value to be paid
before the Deed of purchase and sale.
Holding property/ Annual Rates – flat rate of 3% on 25% of the
attributed value to be paid annually in April (or in two instalments
in April and September of each year)
Capital Gains Tax –
(i) Capital gains regarding plots for construction are taxable if
their sale value exceeds a 100% increase of the value at which they
were initially purchased.
(ii) Capital gains regarding any other property are taxable if their
sale value exceeds a 30% increase of the value at which they were
initially purchased.
In both (i) and (ii), the capital gain is taxed at a flat rate of 3%
and should be paid within 30 days of the Deed, together with the
submission of a "Declaracao de mais valias" (Capital Gains
statement).
Inheritance/Gift Tax – Any property transmitted by inheritance or by
gift is taxed at a flat rate of 3% on the attributed value.
Capeverdian Will
Once you have acquired the property, it is advisable that you
execute a Capeverdian will to deal with your property in Cape Verde.
Although an English will is valid, obtaining probate in Cape Verde
is easier if there is a Capeverdian will.