Selling property in Cape Verde as a foreigner can be a rewarding endeavor, offering the chance to realize capital gains from an investment in this beautiful archipelago. However, like any international real estate transaction, it requires a thorough understanding of the local laws, taxes, and procedures. This comprehensive guide aims to illuminate the process for foreign sellers in Cape Verde in 2025, providing insights into the market, step-by-step procedures, and the financial implications you can expect.
The Cape Verde Property Market for Sellers in 2025
Cape Verde’s property market continues to be heavily influenced by its thriving tourism industry, which remains the backbone of the archipelago’s economy. In 2025, the market is characterized by sustained international investor interest, particularly from Europe, driven by the islands’ consistent warm climate, stunning beaches, and rich cultural heritage. Economic growth projections for Cape Verde indicate a positive trajectory, with forecasts of 5.2% in 2024 and 5.4% in 2025, bolstering confidence in the real estate sector.
Islands like Sal and Boa Vista remain the most popular choices for foreign property investment and sales, known for their world-class resorts, beautiful beaches, and growing infrastructure. The demand for holiday homes, in particular, continues to be strong, leading to expectations of steadily rising property prices. The Cape Verdean government actively supports foreign investment through simplified property ownership procedures and various tax incentives, aiming to foster a transparent and investor-friendly environment. While the market’s reliance on tourism means it can be sensitive to global economic conditions, the country’s stable political environment and ongoing development efforts present a compelling case for those looking to divest their assets. For sellers, understanding these dynamics is crucial for setting competitive prices and attracting buyers.
The Selling Process: A Step-by-Step Guide for Foreigners
Navigating a property sale in Cape Verde requires adherence to local legal frameworks, which are largely based on the Portuguese model. The process, while structured, can involve complexities, making professional guidance indispensable.
Step 1: Appoint a Local Lawyer The absolute first and most critical step for any foreign seller is to engage a qualified, independent local lawyer in Cape Verde. Their expertise is paramount in navigating the legal intricacies, ensuring due diligence, preparing documentation, and representing your interests throughout the transaction. Given the language barrier (Portuguese is the official language) and unfamiliarity with local customs, a lawyer will act as your essential guide.
- Power of Attorney (POA): If you cannot be physically present in Cape Verde for all stages of the sale (which is common for foreign sellers), you will need to grant your lawyer a Power of Attorney. This can be arranged either in Cape Verde (typically costing around €60-€100 for drafting and notarization, plus translation services) or in your home country. If executed abroad, the POA must be signed before a notary public, authenticated (e.g., apostilled under the Hague Convention), and then sent to Cape Verde for official recognition and translation. This empowers your lawyer to sign documents, manage funds, and represent you at the notary and land registry.
Step 2: Obtain Necessary Documentation Your lawyer will assist you in gathering all the required documents for the sale. This comprehensive dossier is essential for transparency and legal compliance. Key documents typically include:
- Title Deed (Escritura Pública de Compra e Venda): The official document proving your legal ownership of the property.
- Land Registry Certificate (Certidão do Registo Predial): A certificate from the Land Registry confirming property ownership, any existing charges, mortgages, or liens on the title.
- Tax Information Certificate (Certidão Matricial): This document from the tax authorities provides the property’s tax registration details and value.
- Habitation License (Licença de Utilização): For residential properties, confirming that the property has been built in accordance with planning permissions and is fit for habitation.
- Identity Documents: Your valid passport and tax identification number (NIF – Número de Identificação Fiscal) for Cape Verde.
- Utility Bills: Recent bills for water and electricity to demonstrate clear payment history.
- Condominium Documents (if applicable): If the property is part of a condominium or resort, minutes of general meetings, proof of up-to-date service charge payments, and details of any planned works are required.
Step 3: Property Valuation and Marketing Work with your lawyer and potentially a local real estate agent to establish a realistic market value for your property. An accurate valuation is crucial for attracting buyers and ensuring a timely sale.
- Real Estate Agent: While not legally obligatory, most foreign sellers opt to work with a local real estate agent. Agents possess invaluable market knowledge, can effectively market your property on local and international platforms, handle inquiries, conduct viewings, and manage initial negotiations. Their fees are discussed in detail below.
- Private Sale: Selling privately is an option if you have a direct buyer, but you will still need your lawyer to handle all legal and administrative aspects.
- Marketing: Ensure your property is showcased with high-quality photos and detailed descriptions on relevant online portals (both local and international), and through the agent’s network.
Step 4: The Promissory Contract of Purchase and Sale (Contrato Promessa de Compra e Venda) Once a buyer makes an offer and terms are agreed upon, this preliminary contract is drafted by your lawyer (or the buyer’s lawyer) and signed by both parties. This is a legally binding agreement in Cape Verde, outlining:
- Full details of the property and parties involved.
- The agreed purchase price and payment schedule.
- The completion date for the final deed.
- Any specific conditions or warranties.
- Penalties for breach of contract. At this stage, the buyer typically pays a non-refundable deposit, which is negotiable but commonly ranges from 10% to 30% of the purchase price. The contract should be signed in the presence of a notary public.
Step 5: Buyer’s Due Diligence After the promissory contract is signed, the buyer’s lawyer will conduct extensive due diligence to verify all aspects of the property. This includes checking the title at the Land Registry, verifying planning permissions, inspecting for any encumbrances or debts against the property, and ensuring all legal requirements are met. As the seller, you must cooperate fully and provide any additional information requested.
Step 6: The Final Deed of Conveyance (Escritura Pública de Compra e Venda) This is the definitive document that transfers legal title of the property from the seller to the buyer. The Escritura must be signed before a notary public in Cape Verde. All parties (or their legal representatives with POA) must be present. At this stage, the outstanding balance of the purchase price is paid by the buyer, and the keys to the property are handed over. Your lawyer will ensure that the funds are cleared before the deed is signed.
Step 7: Property Registration Immediately following the signing of the Escritura, your lawyer will arrange for the new ownership to be registered with the local Land Registry (Registo Predial) and the municipal tax authority. This crucial step legally formalizes the transfer of title and updates all official records.
Step 8: Utility Transfers Finally, arrangements must be made to transfer utility contracts (water, electricity, etc.) into the new owner’s name. Your lawyer can assist with this process to ensure a smooth transition of services.
Taxes and Costs Involved in Selling Property in Cape Verde (2025)
Understanding the financial implications is critical for any seller. The costs associated with selling property in Cape Verde can be broadly categorized into taxes payable by the seller and other fees.
Taxes Payable by the Seller:
- Capital Gains Tax (Imposto sobre Mais-Valias): This is the primary tax liability for a seller in Cape Verde if a profit is made on the sale.
- Rate: For the sale of immovable property (real estate), capital gains are generally subject to a flat tax rate of 15%. This is a significant change from older regulations which sometimes mentioned lower rates for certain gain thresholds; current information from reliable sources (PwC’s Tax Summaries, updated February 2025) indicates 15% for immovable property.
- Calculation: The capital gain is calculated as the difference between the sale price and the acquisition price. It’s important to note that the acquisition price can include the original purchase price plus certain allowable expenses, such as the initial purchase taxes, notary and registration fees paid when you bought the property, and certified costs of major renovation works that add value to the property. While agent and legal fees for the sale itself might be considered, specific confirmation on their deductibility for capital gains calculation in Cape Verde should be sought from your lawyer.
- Payment Timeline: The capital gains tax is generally payable within 30 days of the final deed (Escritura) being signed. A capital gains statement (Declaração de Mais-Valias) must also be submitted.
- Non-Resident Considerations: As a non-resident in Cape Verde, you may also be subject to capital gains tax in your country of tax residency. However, if a Double Taxation Treaty exists between Cape Verde and your home country (e.g., with the UK), you may be able to claim a tax credit for the tax already paid in Cape Verde, preventing double taxation. It is essential to consult with a tax advisor in both Cape Verde and your country of residence to understand your specific obligations and optimize your tax position.
Other Seller’s Costs:
- Real Estate Agent Fees: If you opt to use a real estate agent, their commission is typically a significant cost. While rates are negotiable, they generally range from 3% to 5% of the sale price. Some online platforms may offer lower rates, for example, 0.75%, but this often means more direct involvement from the seller. It’s crucial to clarify whether the commission includes VAT (IVA) and which party is responsible for paying it (though it is customarily the seller’s responsibility).
- Legal Fees: Your lawyer’s fees for overseeing the sale process are essential. These typically range from €800 to €1,500 for standard resale transactions, but can be higher for more complex cases involving defective titles, unregistered parts of the property, or expedited timelines. Always agree on the fees with your lawyer upfront.
- Power of Attorney (POA) Costs: As detailed in Step 1, if you choose to grant a POA, there will be associated costs for drafting, notarization, and potentially apostille and translation services if done outside Cape Verde.
- Energy Performance Certificate (EPC): While not explicitly detailed as a mandatory seller cost in all Cape Verde property information, many modern real estate markets now require an EPC. It is advisable to check with your lawyer if such a certificate is needed for your property type in 2025, as it assesses energy efficiency and may incur a small fee.
Taxes and Fees Typically Paid by the Buyer (Important for Negotiations): While these are not direct seller costs, understanding them is crucial for setting your asking price and engaging in negotiations, as they represent the total acquisition cost for the buyer.
- Property Transfer Tax (IUP – Imposto Único sobre o Património): This is paid by the buyer upon transfer of ownership. The rates vary based on the property’s value and whether it is rural, urban, or intended for permanent/non-permanent residence. For urban property (residential), it can range from 1% to 8% or more, depending on the value bracket. Some sources indicate a general rate of 3% for urban property or 1.5% of the selling price/property tax value (whichever is higher).
- Notary Fees: Paid by the buyer, these fees cover the services of the public notary who officiates the signing of the deeds. They are generally around 1.4% of the purchase price.
- Land Registry Fees: Also typically paid by the buyer, these fees cover the registration of the new ownership at the Land Registry. They are estimated around 2.5% of the purchase price.
- Stamp Duty: Often included within the notary and registration fees, sometimes cited as around 2.5% of the property’s value.
Important Considerations for Foreign Sellers
- Currency Exchange: The Cape Verdean Escudo (CVE) is pegged to the Euro (€), making currency conversion relatively stable against the Euro. However, if your home currency is not the Euro, fluctuations between your currency and the Euro will impact the final amount you repatriate. Consider using specialist foreign exchange services to secure favorable rates and manage large transfers.
- Language Barrier: Portuguese is the official language. All legal documents will be in Portuguese. Ensure your lawyer provides certified translations of all critical documents and explains them thoroughly to you.
- Timelines: A straightforward resale transaction in Cape Verde can take between 3 to 4 weeks from accepted offer to completion. However, complexities such as defective titles, missing documentation, or uncooperative parties can extend this process by an additional 4 to 6 weeks or more. Patience is key.
- Tax Residency and International Obligations: Be mindful of your tax residency status. Even after selling property in Cape Verde, you may have ongoing tax obligations in your home country related to the capital gain. Always consult with tax professionals in both jurisdictions.
- Market Volatility: While the Cape Verdean property market is currently stable and growing, its heavy reliance on tourism means it can be susceptible to global economic downturns or travel restrictions. Factor this into your risk assessment.
Selling property in Cape Verde as a foreigner in 2025 offers a viable opportunity, particularly given the ongoing growth in the tourism sector and government support for foreign investment. By thoroughly understanding the step-by-step process, meticulously preparing all necessary documentation, engaging a trusted local lawyer, and being fully aware of the associated taxes and costs, you can navigate the sale efficiently and effectively, ensuring a smooth and profitable transaction. Professional advice is not just recommended but essential to protect your interests and comply with all legal requirements in this beautiful island nation.
