HOW TO BUY A PROPERTY IN PORTUGAL
If you are planning to buy a property in Portugal, make sure you have a good understanding of the legal system and its procedures. We suggest strongly, before you sign any contract, to consult the services of a local lawyer/solicitor/mortgage advisor. They will be able to advice you properly and analyse all the documentation you might need (mortgage, charges, licences, taxes etc) and can act on your behalf. At Marcela Properties, we always make sure all the documents of the property are in place, before we put it for sale.
The following documents should be checked by your lawyer/solicitor:
- Certificate of the Land Registration (Certidão de Teor da Descrição Perdial): This document is used by the local Land registry office and proves the property ownership.
- Booklet (Caderneta Perdial): This is issued by the tax Department and will confirm that the property has been registered for tax purposes.
- Habitation licence: (Alvara de Licença de Habitabilidade/Utilização): This is issued by the local Town Hall (Camera Municipal) and proves that the building complies with the relevant building regulations.
Fiscal Number: Everyone who wants to purchase a property, even when you are a non -resident, will need to obtain a fiscal number. Take certified copies of your passport, a small fee and attend a fiscal department (Finanças).
Sale Process: Once you have found the property of your choice, the estate agent will most likely ask you to sign a:
Promissory contract of purchase and sale / Reservation contract (Contrato de promessa de compra e venda): This preliminary contract is signed up by both parties. It will reserve the property until for example the mortgage comes through. It should include all details of the property, the terms and conditions agreed, price, completion date, inventory etc. A deposit of minimum 10%of the purchase price is usually required.
Property Transfer tax (IMT): This tax is payable by the purchase before the granting of the final deed (Escritura de compra e venda). Proof of its payment is required by the notary. The amount due is variable, depending of the property's price and is based on a sliding scale. The maximum rate being 6,5% of the property price.
Final Deed (Escritura de compra e venda): The final deed is done before a notary and this is prepared and drawn up based on the property's documents. The presence of either parties (seller and purchaser) or their legal representatives are required to sign the deed. At this stage, payment of the balance of the price must be made. Previous to the deed, all expenses and taxes relating to the property have to be in order; otherwise you might be responsible for those payments (E.g. rates, electricity and water bills).
Land Registration (Registo Perdial): After obtaining a certified copy of the deed, the registration of your property must be applied for, so that the property will be registered in your name.
Notary and registration fees: These payments are the responsibility of the purchaser and the amount due is approximately 1% of the property price.
UtilityBills: Following the deed, make sure all utility bills (rates, gas, water, electricity, telephone) are transferred into your name. Your lawyer/solicitor can assist you with this.
Property Rates Tax (Imposto Municipal sobe Imóveis): This tax each house owner will have to pay annually, which is approximately between 0,4 and 0,8% of the tax value.
If you need any professional advice from a lawyer/solicitor/mortgage advisor/bank - please look under Services on our website.
Note: please be aware that this information is not a substitute for professional advice and we cannot accept responsibility for any kind of loss or damage.