Use only a government-licensed real estate agent/agency. This is a license granted by the portuguese State after required qualifications are gained. In addition to qualification, civil liability insurance is also mandatory.
When purchasing a property in Portugal, we also recommend that you use a Lawyer. Most speak English and will provide a list of the costs involved.
It is up to the real estate agent to collect the necessary legal documentation from the seller before putting the property up for sale. It is up to the Lawyer to verify that the documents are up to date and that the information contained therein corresponds to that presented at the City Council and at Tax Department.
All residential properties must have the following documents:
If buying a rural property it is necessary that the property have a Caderneta Rustica. This is a detailed and an up-to-date description of the property. This document is issued by the local Tax Department.
The Vendor and Purchaser will agree a Promissory Contract detailing the conditions of Sale - "Contrato de Promessa de Compra e Venda". The Contract is then legalized by registering it in the local Notary Office. It is legally binding on both sides and the law states that the vendor must repay twice the deposit should he/she withdraw from the sale. If the buyer fails to complete he/she forfeits the total deposit. The Lawyer will explain this.
A document named Procuração Pública | power of attorney is prepared with the necessary details and this document is signed and registered by the Notary. This official document can also be created in the Portuguese language outside Portugal in a Portuguese Consul in a foreign country, or, in a Notary in the language of the country concerned. In the case of the latter the document must have the Seal of the Notary and an Apostil attached. An official translation into the Portuguese language will later be necessary.
Every buyer must obtain a Fiscal Number from the local Tax Office (Finanças). (Your Lawyer can assist you with this).
Prior to the completion of the sale, the purchase will usually be subject to IMT tax. 'Imposto Munipal Sobre Transmissões' This Tax is paid in the local Tax Office nearest to the location of the property being purchased. The amount charged is dependent upon the type of property and the sale price. In certain cases the buyer may be exempt from paying the Tax if the sale price is below € 85,500.00; however, this is a very rare occurrence these days.
Below is a table of the IMT tax payable on all urban purchases. All Rural properties are subject to a flat 5% Tax based on the sale price. Any Offshore Company purchase is subject to a Tax of 15% applied to the sale price.
THE BUYING PROCESSWhen all the above requirements have been completed the act of sale can proceed in any Notary Office. This act is known as the "Escritura de Compra e Venda" which takes place in front of the selected Notary and is recorded in the official books. The Notary will check prior to the completion of the sale that all the necessary documents are correct to ensure that the sale can complete according to the facts provided. It is then that payment is normally given to the seller, and when applicable, the balance of purchase has to be made according to the signed Contract in Point 2 above. After the act is recorded the Notary Office will issue a photocopy of the entry which is the proof to the buyer that the act has officially taken place. The photocopy will carry the seal of the Notary but as further official copies can be requested at any time this document should not be mistaken for a "Title Deed"- as known in the UK.
After completion the property is registered in the new owners name in the Land Registry Office. (Conservatória do Registo Predial). This registration is not obligatory until the owner wishes to sell the property. However, it is strongly recommend that the registration be done immediately after the Notary act to prevent and protect against possible financial abuse by the previous owner.
Buying a property in Portugal can be a smooth and easy transaction but equally it can be a nightmare experience, so choosing the right professionals to work with and guide you through the purchasing process is another important decision that you have to make. We at Fernando Vaz Estate Agent aim to help our clients make informed buying decisions based on sound advice. This document is aimed at informing the purchasers of the different stages involved in purchasing a property in Portugal, step by step.
From an offer being accepted to Promissory Contract can take anything from 7 days to 60 days depending on whether the purchaser needs a mortgage or not and if all of the vendor documents are in order. Promissory contract to Escritura can take as little as 7 days but normally takes between 30 and 60 days. The average mortgage assisted sale time is approximately 3 months. These are the same average time scales as in the UK.
What the purchaser should do;
If the offer is accepted
The Banks Role;
In order to purchase a property in Portugal, you will be required to open a bank account first
The bank will require from you:
If you require a mortgage the bank will need from you:
The Mortgage Process:
The Taxes IMT tax due (UK equivalent of Stamp Duty) (Paid at any Finanças) (Tax office)
The Lawyers FeeThe Lawyers Role
- This normally works out to be approximately 1.5% - 2% of the agreed sale price.
On-going commitments and obligations
If you spend less than 6 months per year in Portugal then you are classed as non-resident. However you are obliged to: