Innovative property investments
Investment property in Portugal
Buying Guide
Buying Process
Legal checks
Once you have found a property, your first port of call should be to find a reputable advogado, a lawyer.
On acceptance of an offer, it is recommended that you conduct an independent survey, especially on older properties.
Meanwhile, your lawyer will be making sure with the Conservatoria do Registro Predial (Land Registry) that the property comes with its very own title deeds and generally information about ownership, boundaries and encumbrances.
The property should also have official tax documents available from the Repartição de Finanças (Inland Revenue), as well as a caderneta urbana (description of the property) and make sure the vendor has paid his annual property taxes and the contribuição predial (biannual rates).
Finally, the Câmara Municipal (Local Council) will ensure that the property has a habitation licence and can give you information on planning, building licences and project approval etc.
Promissory contract and deposit
If all is looking correct, then a contrato promessa de compra e venda (promissory contract) is drawn up by your lawyer, including the details of the property, stage payments, completion date, and any special terms agreed upon, and signed in front of a notary.
At this point, a deposit is paid of usually 10% although it may be advisable to increase this.
In Portugal, a vendor can accept another offer right up until completion.
If this occurs then the vendor must refund double the amount deposited to the previous buyer and a larger deposit may be a good way of avoiding this situation.
If the buyer forfeits the purchase then they will automatically lose their deposit.
Off-plan purchasing
If buying off-plan direct from the developers then stage payments can be made from your home country (tip, use a foreign exchange specialist, not your high street bank, to conduct those payments and save yourself thousands of euros).
Resales
For a resale property, time from promissory contract to completion is normally 30 days.
Title deeds and completion
The Escrituria de Compra e Venda (title deeds) will then be signed in front of a notary.
The purchaser does not have to be present for completion as long as the lawyer has Power of Attorney, which can be arranged either in Portugal previous to completion or via the Portuguese Consulate in your country of residence.
Key facts
- Have an independent survey conducted, especially on older properties
- Through the Conservatoria do Registro Predial, check any boundaries, encumbrances and that the property comes with its own title deeds
- Through Repartição de Finanças check that all annual taxes and biannual rates on the property are paid, and the description of that property
- Check with the Câmara Municipal that the property has a habitation licence and any information on planning, building licences and project approval etc.
- A ‘promissory contract’ is signed in front of a notary and a 10% deposit paid
- The period between promissory contract and completion for resales is 30 days
- Consider offering a higher deposit with the promissory contract to discourage the vendor from accepting another offer during the purchasing process, as they are entitled to do
- The Escrituria de Compra e Venda are signed before a notary completing the sale
- A Power of Attorney - your lawyer - can be present in your stead to sign the title deeds if organised in advance
Downloadable Reports and Documents
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