Buying property in Cape Verde as a foreigner: Complete guide

Cape Verde as a destination for property investment often lies in its stable political climate, growing economy, and inviting weather conditions. However, purchasing property in a foreign country can be challenging due to distinct legal systems and cultural practices. It is important to have a comprehensive understanding when buying property in Cape Verde and the nuances of the property acquisition process, whether your goal is to obtain a holiday home, a permanent residence, or an investment property. In this article, we will discuss how to buy property in Cape Verde as a foreigner.

Current real estate market in Cape Verde

The economy of Cape Verde, which suffered a slowdown in growth to 4.8% in 2023, is a major factor in the country’s real estate market. Notable contributors include the travel and tourism industry, lodging, transportation, and commerce. This is significant since tourism affects the demand for real estate and accounts for 25% of GDP.

Although the country’s current account deficit increased from 3.4% to 5.3% and its budget deficit shrank from 4.3% to 0.5%, it is still moving toward energy sustainability to have 100% renewable electricity by 2025. This change may draw environmentally conscious investments when buying property in Cape Verde, promoting sustainable real estate development. However, the market confronts difficulties due to shifting commodity prices and climate change, which will affect Cape Verde’s real estate patterns in the future.

To secure foreign capital, Cape Verde has instituted a Green Card program, associating property investment with the benefit of gaining permanent residency. Foreigners purchasing property in Cape Verde islands who pay at least €80,000 ($85,920) or €120,000 ($128,880) (depending on the GDP of the area in which the property is located) are eligible for a permanent residence card, which grants their immediate family permanent rights. This is to distinguish the nation as a prime location for investors and tourists alike, providing attractive benefits to those desiring to own a property in the Cape Verde islands.

Can foreigners buy property in Cape Verde?

Cape Verde allows foreign investors to own property within its islands to boost its economy by attracting overseas investments. This policy when buying property in Cape Verde is central to their economic development plan, which seeks to stimulate the local economy by generating employment opportunities and encouraging the inflow of foreign funds. The initiative is designed to yield economic activities through real estate development and transactions, and it also lays the groundwork for sustainable economic health through increased tax revenues. Through this, Cape Verde is enhancing its appeal in the global real estate market and positioning itself for a future of economic prosperity, making it an attractive locale for global investors.

Popular regions and areas

Cape Verde, an archipelago off the northwest coast of Africa, is home to a collection of islands, each boasting unique features, cultures, and landscapes. Below are the five popular regions and areas in Cape Verde:

• Sao Nicolau: Sao Nicolau charms with its beautiful landscapes and unique black beaches, offering a warm welcome from locals and a wealth of hiking opportunities, notably around Monte Gordo Natural Park. Property for sale in Cape Verde islands range from €60,000 ($64,440) to €250,000 ($268,500).
• Brava: Known as the “island of flowers,” Brava offers an escape with stunning panoramic views and natural pools, nestled within a community renowned for its warmth and friendliness. Buying property in Cape Verde spans from €100,000 ($107,400) to €300,000 ($322,200).
• Sao Vicente: Sao Vicente is celebrated for its lively cultural atmosphere in Mindelo, varied outdoor activities, and surf-ready beaches. It is a haven for those seeking a mix of leisure and adventure when purchasing property in Cape Verde. Apartments on Sao Vicente are priced between €100,000 ($107,400) and €200,000 ($214,800).
• Sal: A hotspot for luxury beach resorts, Sal caters to both thrill seekers and those in search of tranquility, with highlights including the Buracona pools and Santa Maria’s captivating environment. Property for sale in Cape Verde islands ranges from €40,000 ($42,960) to €350,000 ($375,900).
• Boa Vista: Famous for its breathtaking beaches, like Santa Monica, and the adventurous Viana desert, Boa Vista offers compelling investment opportunities in its real estate market. Prices when buying property in Cape Verde begin at €55,000 ($59,070) and reach up to €250,000 ($268,500).

How to buy property in Cape Verde: Step-by-step process

Understanding the complexities involved in the Cape Verde real estate market is crucial, from navigating the right locality to complying with the legal requirements. Here are five steps on how to buy property in Cape Verde.

Step 1: Find the perfect property

Finding the ideal Cape Verde property for sale starts with extensive research, either online or by visiting in person, to survey the real estate ecosystem. The islands vary significantly in lifestyle and living costs; Sal and Boa Vista often attract international buyers but don’t overlook the potential and value available on other islands. Once you’ve pinpointed a property and its cost, engage with a broker and express your interest while also keeping an eye out for any less obvious fees tied to the property purchase.

Step 2: Engage with a lawyer

Securing a trustworthy local lawyer is a must to ensure all documentation is accurate and to guide you through purchasing property in Cape Verde. Expect legal fees to range from €600 ($644) to €1,000 ($1,074). Additionally, setting up a power of attorney is essential for your lawyer to represent you during the closing procedures, which can be done either in Cape Verde or via your country’s nearest Cape Verde embassy, costing around €60 ($64.44) to €100 ($107).

Step 3: Negotiate and reserve the property

When you find your dream property, engage in negotiations through your appointed broker. This process generally involves paying a reservation fee, approximately €3,000 ($3,222) or 5% of the Cape Verde property for sale, securing your claim on the property, and contributing towards your eventual deposit. During negotiation, when buying property in Cape Verde, keep a close eye on brokerage fees and contemplate signing a promissory contract for an additional layer of protection.

Step 4: Arrange the closing statement

Your lawyer’s next task involves drafting a statement of closing costs, including all consequential fees and taxes when purchasing property in Cape Verde. This document, once finalized, will be presented by your lawyer at the notary office in Cape Verde, where the actual purchase agreements are executed on your behalf.

Step 5: Complete the purchase with the final deposit

The final stage when buying property in Cape Verde is to pay the final deposit to the seller. This can either be done directly, avoiding unnecessary internal transfer fees, or via your lawyer, which might offer additional security but could incur extra taxes and potential hold-ups.

Property prices in Cape Verde

Given the archipelago’s rising appeal as a real estate destination, property values in Cape Verde offer an intriguing spectrum for potential buyers and investors. The property in Cape Verde islands provides a range of choices to suit a range of tastes and price ranges, from comfortable apartments to expensive villas. An apartment may be purchased for approximately €80,000 ($85,920) on average, making it a more affordable way of purchasing property in Cape Verde.

Villas up to €250,000 ($268,500) are available for those looking for more roomy and luxurious lodging. The wide range of prices found on the islands highlights the market’s adaptability. It makes Cape Verde a desirable destination for purchasers seeking to take advantage of the stunning scenery, vibrant culture, and lucrative investment opportunities.

Risks and pitfalls of buying property in Cape Verde

Investors should use caution before making any real estate investments in Cape Verde. Here are the risks and pitfalls of buying property in Cape Verde:

• Legal intricacies: The legal framework when buying property in Cape Verde can be a maze for foreign investors, necessitating the insights of local legal professionals experienced in navigating these specificities.
• Guarding against scams: The property landscape is not without pitfalls, including misrepresented properties and fraudulent listings, making in-depth property verification essential.
• Infrastructure evaluation: Prospective investors should thoroughly research the local infrastructure and planned developments, as some locales may lack crucial services and amenities.
• Anticipating environmental impacts: Given the islands’ vulnerability, the potential impact of natural disasters and climate change on property values and insurance should not be overlooked.
• Accessibility concerns: The challenge of limited direct flights when purchasing property in Cape Verde can impact the desirability of properties for rental purposes, affecting potential income.
• Language barriers: The Portuguese predominance necessitates consideration of potential language barriers during transactions and within the local community, highlighting the need for linguistic preparation or support.

Buy property in Cape Verde with Own Property Abroad

Are you considering buying property in Cape Verde? Own Property Abroad can guide you through a seamless and efficient property acquisition process. Leveraging our extensive knowledge and local expertise in the Cape Verdean real estate market, we offer support with legal requirements, finding suitable properties, securing favorable deals, and conducting comprehensive due diligence.

With our experienced team at your side, you won’t have to navigate the complexities of the Cape Verde property market alone. For more information on how we can assist you, please provide your details below or contact us at [email protected].

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