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Property purchase

Buying steps: property checks

Once the buyer has chosen a property and has had an offer accepted, their lawyer will check with the Land Registry that the property comes with its own title deeds and that all is as it should be regarding ownership, boundaries and encumbrances. The property should also have official tax documents, as well as a “caderneta urbana” (description of the property). Finally, the local council will ensure that the property has a habitation licence and can give you information on planning, building licences, project approval, and so on.

Buying steps: agreeing terms

If all is in order, a promissory contract will be drawn up by the buyer’s lawyer and signed in front of a notary. At this point a deposit is paid, usually of around 10% although it may be advisable to increase this. In Portugal, a vendor can accept another offer right up until completion, in which case the vendor must refund double the amount deposited to the previous buyer. If the buyer forfeits the purchase then they will automatically lose their deposit.

If buying off plan direct from the developers then stage payments can be made from your home country. For a resale property, the time from promissory contract to completion is normally 30 days.

Buying steps: title deeds

The 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.

Costs of purchase

The buyer is responsible for most of the costs associated with purchasing a property, although these will differ between properties. The following is a guide to these costs:

• Notary fees and land registry fees - approximately 1.5% of the purchase price.
• Stamp duty - approximately 0.8% - 1% of the purchase price.
• IMT tax - formerly known as SISA tax, IMT is a tax on the transfer of property and the rate is dependant on the declared purchase price and the type of property. For properties up to €83,500 there is no IMT tax to pay; otherwise the rate ranges from 2 – 8% on a sliding scale. Exceptions apply for rural and commercial properties, and purchases made by an offshore company.
  

Related items

Documents and Reports

	Portugal property investment report (420Kb)
	Portugal country guide (1Mb)
	Portugal property buying guide (1Mb)
Documents and Reports

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