Corporate Ownership (page 2/3)
Owning a property through an English speaking venue, coupled with the benefits of corporate property ownership, offered a very attractive method for owning property here in the Algarve, and in fact, it still does. Over the years, the ownership of property here in the Algarve through a company became the accepted practice. As mentioned above, the property owners themselves owned the shares in the company, and when the property was sold, all that actually happened was that the shares were sold; the company remained the owner of the property and the buyers became the new shareholders, thus saving significantly on tax.
In 2003 there were some fundamental changes. All of those countries outside of Portugal (sometimes referred to as Offshore Centres) were classified by an international body known as OECD into Black List and White List jurisdictions. The Black List jurisdictions were for the most part those countries that offered beneficial tax regimes that were out of line with the White List countries. The intention being that those on the Black List would be thus encouraged to fall into line with White List jurisdictions.
It was decided that a special higher tax would be applied on those property owning companies that were based in Black Listed countries. Many owners of properties here in the Algarve, that had for years been based in Gibraltar and other (now) Black Listed jurisdictions, had to make fundamental decisions about the way that their properties would continue to be owned. At that time the overwhelming view of most clients and their professional advisers was that they wanted to continue to own their properties in a company, but not in places such as Gibraltar and those other Black Listed jurisdictions. Most clients continued to be of the opinion that the benefits of corporate ownership outweighed the disadvantages.
