When you buy a property outside the eurozone, there is a question many people only ask themselves afterwards: what happens to the value of my investment if the local currency changes in value? In Cape Verde the answer is more reassuring than elsewhere, but it needs to be properly understood.
What the Cape Verdean escudo is
The Cape Verdean escudo (code CVE) is the official currency of Cape Verde. It is the one you use in shops, restaurants and for everyday services on the island.
Its main feature, for investors, is its fixed exchange rate with the euro: the ratio between the two currencies does not fluctuate every day as it does with many currencies. It is a link that has remained stable over time, underpinned by a 1998 exchange-rate cooperation agreement with Portugal: €1 = 110.265 escudos (source: Banco de Cabo Verde).
Why the fixed exchange rate matters to investors
Fewer fluctuations
Imagine buying a home in a country whose currency loses value against the euro. Even if the property holds its value in the local currency, converted into euros it is worth less. With a fixed exchange rate this risk is greatly reduced.
Clearer sums
If you think in euros, as almost all investors from the eurozone do, it is easier to compare prices, costs and expenses. You do not have to add another variable that is hard to predict to your calculations. If your savings are in another currency, such as pounds sterling, the movement between that currency and the euro still applies.
Predictable day-to-day spending
When you are on the island for your holidays, you know in advance what your spending is worth in euros. A detail, but a useful one for anyone planning to spend long periods on Boa Vista (we cover this in a second home by the sea abroad).
What the fixed exchange rate does not solve
Being honest also means saying what does not change:
- it does not eliminate every risk: a fixed exchange rate is a monetary policy choice, solid but not unchangeable by definition;
- it does not concern the value of the property: the price of a home depends on location, quality, tourist demand and management;
- it does not replace checks: money transfers, bank accounts and tax obligations follow precise rules.
For a complete picture of the risks, read the guide risks of investing in Cape Verde.
Which currency you buy in
The properties we offer have prices quoted in euros. A few examples:
- Estrela do Mar apartment, Sal Rei: €65,000;
- Por do Sol pool suite, Praia Cabral: €90,000;
- Sea-view apartment at Vila Cabral: €120,000;
- suites at The View: from €90,000.
The practical payment arrangements (accounts, transfers, timescales) should be set out in the contract. You will find more detail in the guide how to pay for a property abroad.
What to check before transferring money
- Who you are paying: always check the account holder and that it matches the contract.
- How you are paying: choose traceable methods.
- When you are paying: for an off-plan property, payments are usually linked to the progress of the works.
- Obligations in your home country and in Cape Verde: notifications, tax returns and taxes should be checked with a professional.
For practical guidance, read the guide costs and taxes for buying a home in Cape Verde on Boavista2000.com.
A practical example
Suppose you buy a suite for €90,000. With a local currency that fluctuates a great deal, after a few years the same property could be worth significantly less once converted into euros, even if nothing has changed on the island. With the fixed exchange rate this effect is very limited: the value in euros depends mainly on the property and the market, not on the currency.
The same applies to running costs: service charges, utilities, minor maintenance. Knowing what they are worth in euros allows you to plan with greater peace of mind.
One factor among many
The link with the euro is a point in its favour, but it is not enough to make a decision. The country context also matters, as explained in Is Cape Verde a stable country?, and above all the choice of property and of the people supporting you.
If you want to understand how a purchase from abroad is structured, contact us for a consultation or request the presentation of The View.
Frequently asked questions
Can I use euros on Boa Vista?
The official currency is the Cape Verdean escudo, and it is worth having some for everyday spending. Some tourist establishments may accept euros, but this is not a rule: it is best to check before you travel.
Does the fixed exchange rate mean the escudo is worth the same as the euro?
No. It means the ratio between the two currencies is fixed and does not fluctuate every day. One euro always corresponds to the same number of escudos.
Does the fixed exchange rate protect the value of my home?
It protects against the risk of the currency losing value against the euro. The value of the property, on the other hand, depends on location, quality, demand and management.
Do I need to open an account in Cape Verde to buy a home?
It depends on the type of purchase and the contractual arrangements. It is something to check with a professional before going ahead.
Would you like to talk it through with a person?
Book a video call or message us on WhatsApp: we will answer your questions about Boa Vista and The View.
