In the Algarve, our favorite area is around Carvoeiro, a bench of high land between the towns of Albufeira and Portomao, which offers rolling hills on a an elevated coastline, and an amazing oceanfront with spectacular cliffs, grottos, caves and picturesque beaches. In between the town of Carvoeiro and the beach of Marinha, there is a coastal path one could never tire from walking. We did it in stages, so that we could walk back to our car each time. The walk is posted as medium-difficult, stretches just under 12 km and to walk it all at once would take about six hours.
The first stage of our walk was from Marinha to the small town of Benagil. Just before Benagil is one of the larger caves along this coastline, with an opening on the coast, something like a cenote, where you can look down into and see people on the beach and boats coming and going. The walk takes about 40 minutes each way.
After a couple of visits to the Algarve this past fall, we began looking at real estate opportunities as we are considering a full-time move to Europe and the Algarve really has a lot to offer, at least for our lifestyle. It did not take us long to find a few properties we liked, two that were in the same development near Carvoeiro.
We soon discovered that many of the titles for the homes (not so much the condominiums) in this region are not held by individuals but by an off-shore company. Looking into further it seems this is the way things have been done here for quite a long time, and for some good reasons.
- Inheritance Taxes. Up until recently, inheritance taxes were horrible in Portugal. There was, so I’m told, potential inheritance taxes if the property was just passing from husband to wife, let alone to the children. So having the title held in the name of a company, which wouldn’t change when someone within the company died, solved that problem.
- Available Financing. Financing, in the past, was difficult to obtain for foreigners looking to buy real estate in Portugal. A solution to this was to have the title held offshore at a bank, which then would lend to the company using the property as collateral. This allowed many Brits to buy in the Algarve with financing from a British bank, something they would not have been able to obtain otherwise. It really helped the Algarve real estate market boom.
- Easy and Quick Closing. Because it is just a transfer of shares, closing then and today is easier and less expensive.
- Anonymity. When it is held offshore, no one knows that you are the owner of the property. There are reasons, some legal and some not, why people look for this type of ownership anonymity (although today the amount of anonymity available, especially with FATFA and other global regulations, is becoming increasingly more difficult to obtain).
- Saving on the Property Transfer Tax (IMT) at closing. As Portugal doesn’t know the property has actually been sold, they can’t charge the Property Transfer Tax. It was a savings back then and it’s a savings today. But does that make it right? Why should one owner get a benefit that another owner doesn’t? And I’m sure the Portuguese government would love to be receiving these funds.
- Capital Gains Taxes. Something else it did, which is a little more sinister, is that it allowed people to avoid paying capital gains taxes. When they wanted to sell the property, they would just sell the shares of the company. Portugal would never know this, that there were new owners, as the name on the title (the offshore held company), would remain the same.
In the early fall of this year we made two one-week trips down to southern Portugal, the “Algarve” as it is most commonly known, to become familiar with the region. We have close friends from Canada that are serious about buying down there and moving over for a few years, and so they wanted to find the area that was best suited for them, and then start house hunting. As those are two of our favorite past times, we joined in on the search. They did find a home, and we may just might have found one for ourselves as well, as we really enjoyed our time in the Algarve.
Our first impression of the Algarve, from people we had previously talked to and what we had read, was that we wouldn’t like it. And is why we left it last to visit, over central and northern Portugal. We thought it would be like the over-built, crowded, high-rise ridden coastline of southern Spain. And to be truthful, there are areas like that, but they are few. Most of it is made up of small beach and hillside towns, nothing too large, joined together by small country roads and one main freeway.
What I quickly realized is that it could give us what I was primarily looking for: good surfing, boarding, biking, golf, hiking, and fine weather nearly all year round. Basically an alternative to what we’ve had in Mexico for many years, but are now looking for the same in Europe. The Algarve seems to be it.
The Algarve is commonly broken up into three primary regions: East, West and Central. In the west you have an amazing cliffs shoreline that is often seen in marketing material for the Algarve, whereas the Central and Eastern parts are more flat, with sand dunes and estuaries, meaning the beach is a long way from the mainland. We want easy access to the beach, hence we prefer the west. The weather tends to better as well.
The towns we have not liked are the busy, touristy, over-built ones, which are primarily Portimao, Armco de Pera and Albufeira to some degree.
Portimao is the most over-built with tall high-rises that line the beach and back, something like Miami. We drove through and just kept driving. Seems to have a great beach in front, but this isn’t what we are looking for. If you are on vacation and looking for action, this is the place. Armco de Pero is a smaller version of Portimao, situated close to Albufeira.
Albufeira doesn’t have the high-rises, although the real estate is really huddled close together on the hillside looking over the small town. But it is very much a party town. The streets are similar to those found in Lagos, but instead of being lined with dining tables for restaurants, it is one bar after the other. This place must be insane during the summer months and spring breakers must love it. But not for us.
We spent some time in Faro, but didn’t enjoy it very much. The old section of the town called “Villa Adentro” was interesting and where we stayed, and there are some pedestrian only streets outside its walls, but they just don’t have the style, character and feel of Lagos or Tavira.
To get to the beach you can take a water taxi for a few euros to a very nice beach with a restaurant on it. You can rent a sumbrella and two lounge chairs for about 20 euros for the day. A great place for long beach walks. Another great beach is a Barril, near Santa Luzia and Tavira. You walk over a small bridge and then take a train across a sand dune to the beach. The train was once used to transport fish across the dunes to the mainland, now it just hauls tourists. There are a number of restaurants and it is also a great walking beach, but tends to get quite crowded.
Our favorite towns were Lagos and Tavira; Lagos on the west side, right on the ocean and Tavira on the east side along a river and some ways from the beach. But both are cute, well-kept, clean towns with interesting shops and restaurants that can keep you busy for some time exploring. Tavira resides on the banks of a river with short bridges connecting its shores. It isn’t far from the mouth of the river, but the beach is still a ways away. Not as big as Lagos but fun to explore. A day may be enough.
Lagos is at the top of our list and we look forward to spending more time there. If we were going to stay in one place to explore the region, it would be Lagos, or the small town of Luz near by but further to the west. Both are unpretentious, have great beaches, and lots of restaurants and shops. And Lagos as well has a marina and is a popular place to catch boats that then visit the coastline cliffs of Carvoeiro.
We also made a side trip over to Sagres, the westernmost point of Portugal, where the surfing looks good, and the up the coast highway to Aljezur. From there we headed east, up into the mountains to the town of Monchique, which has some amazing viewpoints and is a fun town to walk around.
The area we enjoyed the most (as far as long-term living) is a bench situated around the beachside town of Carvoeiro, that includes about 10 km of an incredible coastline with steep, golden cliffs, and the small regional towns of Lagoa, Porches and Vale de El Rei behind. Although most of the coast is made up of steep cliffs, there are some very picturesque beaches such as Carvoeiro, Benagil, Marinha and Carvalho, which are accessible by road and a hike down, while others are only accessible by boat.
What is really quite nice is the pathway they have created that follows the coastline from Carvoeiro to Marinha, similar to the “sentiers” of France. Much of it it hugs the cliff side, with railings put up for protection. It can be a difficult hike and you have to be careful of where you step. Most of the real estate is set back, protecting the coast, and making this walkway possible and definitely more pleasant.
Restaurants we have liked (so far):
- La Fortaleza – Lagos: http://www.fortalezadaluz.com. Close to the beach, this was once a fortress but now functions, in a very unique way, as a great restaurant. Worth seeing just as much as dining there. Fish dishes were amazing.
- Faz Gostos – Faro: https://www.tripadvisor.com/Restaurant_Review-g189116-d2281835-Reviews-Faz_Gostos-Faro_Faro_District_Algarve.html. Probably our favorite of all the restaurants we went to during our time in the Algarve. Make sure to make a reservation!
- Yolo – Luz: https://www.tripadvisor.com/Restaurant_Review-g776012-d6726791-Reviews-Restaurant_Yolo-Luz_Faro_District_Algarve.html. Really enjoyed this restaurant with friends. Can get busy later on, so go early.
- Tres Coroas – Albufeira: https://www.tripadvisor.com/Restaurant_Review-g189112-d1720806-Reviews-Restaurante_Tres_Coroas-Albufeira_Faro_District_Algarve.html. Good traditional Portuguese food at a very reasonable price.