Advice on purchasing and selling property in Portugal
| First of all choose a local Lawyer, as Portugal has its own specific laws that are legally inscribed at the Lawyers Bar Association (www.oa.pt). Fees charged are generally between 1 and 2% of the property value, depending on the complexity of the property’s history and respective price. |
It is obligatory by law for non-residents to appoint Fiscal Representation when purchasing property. This entity is responsible for submitting tax declarations and tax payments arising from property ownership.
The fiscal card is also needed in order to open a Portuguese bank account and for setting up utility accounts. |
| Buying property in Portugal is relatively straightforward and similar to buying property in any other foreign country. |
Buying property in Portugal is relatively straightforward and similar to buying property in any other foreign country.
Complete a Reservation Form and pay a deposit of around €5,000. There will be conditions attached to the Reservation Deposit which should be carefully read and understood.
If you decide not to go ahead then the deposit is refundable less the costs indicated on the Reservation form which are usually the inspection visit costs. |
a) Certificate of Land registry - Describes the property and it is a full prove of the ownership. It also shows all the charges and encumbrances that are attached the property.
b) Certificate of the tax department - this document describes the property in accordance with the one above. Besides it also shows the ownership and exhibit the rateable value of your property.
c) Habitation Licence - Licence conferred by the Town Hall confirming that the construction, if any, is licensed.
d) “Ficha Técnica de Habitação” - it works as an identification of the structure of the building and it is only required if the habitation License was requested after the 30th of March 2004.
e) Plans of the Property - as per approval of the project of construction by the Town Hall. |
After confirming that the documentation is in order it is time to prepare the Promissory Contract of Purchase and Sale.
The purchaser’s Lawyer usually prepares the Promissory Contract.
At the moment of the signature of the Promissory Contract of Purchase and Sale the promissory purchaser delivers to the Promissory Vendor a part of the purchase price, usually between 10% and 30% of the total purchase price (deposit).
The promissory contract is a binding document signed by both parties, which states all of the terms & conditions agreed, such as price and completion date. |
The Purchase and Sale will only be complete after the competent deed is done at a notary that will confirm that all the documentation is in order and that the purchase price was already paid in full.
The conveyance of property is held at the Notary office where the balance of the price is paid & the deeds are transferred to the buyer’s name. The Notary reads a statement which both parties sign, stating that monies have been received accordingly. This is read out in Portuguese; you do not need to be present, incase your lawyer has a power of attorney, but if you are, the wording will be carefully translated for you.
After the Public Deed is done the property is legally yours. The lawyer will then register the change of ownership at the treasure department and at the Land Registry. |
Portuguese Taxes - Once you have acquired a property in Portugal you will be liable to certain taxes.
| It is a one off payment made before the final deed is carried out, up to 8% for habitation properties (depending on the respective price). |
| Municipal Property Tax - An annual municipal tax (similar to UK rates) called “Imposto Municipal sobre Imóveis (IMI)”, is payable by the owner of the property as at 31st December each year, calculated by reference to the rateable value of your home and the percentage rate set by the council. |
| Besides the Transmission Tax, there are also the costs with the notary and registry that represent all together approximately 1% of the purchase price. |
|
Legal Info