Cape Verde Most people only know Cape Verde through the haunting mornos (mournful songs) of Cesária Évora. To visit her homeland which is a series of unlikely volcanic islands some 500km off the coast of Senegal, is to understand the strange, bittersweet amalgam of West African rhythms and mournful Portuguese melodies that shape her music.

It’s not just open ocean that separates Cape Verde from the rest of West Africa. Cool currents, for example, keep temperatures moderate, and a stable political and economic system help support West Africa’s highest standard of living. The population, who represent varying degrees of African and Portuguese heritage, will seem exuberantly warm if you fly in straight from, say, Britain, but refreshingly low-key if you arrive from Lagos or Dakar.

Yet life has never been easy here. For centuries, isolation and cyclical drought have resulted in famine. Generations of Cape Verdeans have been forced to emigrate, leaving those at home wracked by sodade – the deep longing that fills Cesária Évora’s music. While hunger is no longer a threat, you need only glance at the terraced hillsides baking in the sun to understand that every bean, every grain of corn, is precious.

Though tiny in area, the islands contain a remarkable profusion of landscapes, from Maio’s barren flats to the verdant valleys of Santo Antão. And Fogo, a single volcanic peak whose slopes are streaked with rivers of frozen lava. The beaches of Sal and Boa Vista increasingly attract package-tour crowds, but Cape Verde remains a destination for the connoisseur – the intrepid hiker, the die-hard windsurfer, the deep-sea angler, the morno devotee.

Understanding the Buying Process: It is very important that you are familiar with the potential hazards that property purchase in an unfamiliar country may have in store. This information is designed to help you find your way through the purchasing process on the Cape Verde Islands. As an investor, it is most important to make sure that professional people who know their way around the country in which you are buying your property help you.

Buying in a foreign country with a different language, laws, rules, and currency can be quite daunting and is not for the faint hearted.

Choosing Your Lawyer: We always recommend using a local lawyer who speaks your language whenever purchasing any overseas property.

You will need to appoint a lawyer and we may be able to put you in touch with a suitably qualified company to assist you if you haven't already appointed someone. The key thing is to be able to understand everything that you are given to sign and your lawyer must be able to help you with this. 9

Whoever you appoint must be qualified and experienced in the local law and able to speak both fluent Portuguese and English. Your existing UK lawyer is obviously not the person for the job!

Searches: Your lawyer will carry out land searches at the local Municipal Authority and Land Registry Offices. These will reveal if there are charges registered against the property or any existing restrictions on the title. The existence of a valid habitation permit is a precondition for a valid conveyance of off plan property in Cape Verde.

Documentation: The lawyer will obtain the following documents for you:

  • the Certidao do Registo Predial (the land registry certificate)
  • Planta de Localizacao (the official map showing the property's exact location)
  • "Certidao Matricial" (the 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). A Certidao matricial para o efeito (which is a tax certificate confirming this). With these two documents, it will be possible to register the property.

The solicitor will also ask the vendor to produce evidence of payment for any bills such as electricity and other services and check that they have been paid.

Power of Attorney: You will most likely need to give your lawyer Power of Attorney so he/she can represent you when the promissory contract and deed are signed and also to request the necessary tax cards on your behalf. This will have to be done in Portuguese but you should request a copy in your own language. This will have to be signed before a Notary and legalised by the Cape Verde Honorary Consul in Liverpool.

Your lawyer will also obtain a tax card on the purchaser’s behalf.

The Promissory Contract of Purchase and Sale: Signing the Promissory Contract of Purchase and Sale - Contrato Promessa de Compra e Venda is the next step.

At this stage the purchaser is normally expected to pay the deposit, which is negotiable (10% or lately 30% is common practice).
In Cape Verde, the parties are contractually bound once this Promissory Contract of Purchase and Sale is signed. This 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 this contract is exchanged, the vendor is not committed and can change his mind. Transfer tax or IUP tax is due at this point.

Deed of Conveyance – “Escritura”: The final Deed of Conveyance called the "Escritura" has to be signed before a notary public in Cape Verde. This is the document that gives the purchaser complete title to the Property in Cape Verde law. The signing of this deed must be scheduled with a minimum of 30 days' notice.

Registering the Property: The purchase will have to be registered at the local Land Registry and also at the local municipal authority. In Cape Verde, subsequent to the signing of the deed, the notary will prepare and send a report to the local municipal authority regarding the transaction.

But if it is found that the property is not already registered, the following documentation will be required:

·         A Certidao Pela Negativa (a certificate confirming the fact that the property is not registered)

·         A Certidao Matricial Para o Efeito – the corresponding tax certificate

The municipal authority will then update their records and register the new ownership of the property. Notary, registration fees and stamp duty are usually around 2.5% of the property’s value. These are payable on signing the Deed of Conveyance.

Contracts for Utility Services: A contract will need to be signed with each of the providers of services e.g. water, gas and electric. Your lawyer can arrange this if necessary. It is also advisable to arrange for final meter readings to take place prior to completion.

The taxes relating to the property transactions can be found on the Cape Verde tax information section below.

Cape Verde Taxes: This is a general guide to the taxes that you are liable to pay with regard to property or land transactions in Cape Verde. When you sell property in Cape Verde there are no property taxes to pay. However property purchase is subject to the following taxes:

Transfer Tax: This is charged at a flat rate of 3% of the property value and is paid prior to the signing of the deed of purchase and sale.

Holding Property / Annual Rates:

This tax is charged at a flat rate of 3% on 25% of the value of the property and is paid annually every April (or in two instalments in April and September).

Capital Gains Tax:

  • Capital gains on plots for construction are taxable if their sale value exceeds a 100% increase of the value at which they were initially purchased.
  • Capital gains on any other property sale are taxable if their sale value exceeds a 30% increase on the value at which they were initially purchased. The capital gain is taxed at a flat rate of 3% and is payable within 30 days of the deeds, together with the submission of a "Declaracao de Mais Valias" (Capital Gains Statement)

Inheritance/Gift Tax: Any inherited or gift property is taxed at a flat rate of 3% on the attributed value of the property.

On completion: On completion, it is your responsibility to have the funds available. Either from cash or via a mortgage lender and perhaps even via a combination of the two!

You will also have to arrange for the transfer of funds to Cape Verde.

Money and Banking: The unit of currency is the Cape Verde escudo (CVE), divided into 100 centavos. It’s not a hard currency, but it’s stable; in January 2002, it was pegged to the euro. Most businesses also accept US dollars and euros.

Banks are found in all the main towns and even some of the smaller ones, and most have ATMs that accept bankcards and Visa. Many also change travellers cheques and cash in all the main currencies (except the West African CFA). Many also give cash advances with a Visa card.

Changing money on the black market is illegal and carries risks (US dollars and Portuguese escudos are often fakes), so avoid it unless you’re desperate. Be careful not to get stuck with Cape Verdean escudos (not legal tender outside the islands). The bank at Sal’s airport and Banco Interatlântico in Praia should change escudos back into other currencies, but bring money changing receipts, your passport and air ticket, which may be requested.

Credit cards are accepted only in very upmarket establishments.

 

 

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Disclaimer: This guide is for information only and should not be relied upon as definitive. Details have been obtained from various sources and although we have done everything possible to ensure that it is correct, we cannot accept responsibility for it or guarantee its accuracy. This is because processes and laws change frequently, and may also vary dependant upon personal circumstances. You are welcome to use the information provided, but should always obtain confirmation of specific details and get independent specialist and legal advice in the country that the information refers to.

02-08-2010