Mortgage in Portugal

Are you interested in apply a Mortgage for buy properties in Portugal?

Please send me the documents below and I will let you know how much the bank borrow you…

Mortgage Documents Required:

IF EMPLOYED:

-Copies of passports and Portuguese fiscal numbers
-Last 2 years P.60s
-Last 3 months payslips
-Employment reference letter telling us how long employed for and contract status
-Last 6 months bank statements
-Balance Sheet of Savings account
-Balance Sheet of shares or bonds

IF SELF EMPLOYED:

-Copies of passports and Portuguese fiscal numbers
-Last 2 years Tax Returns
-Last 2 years P.60s (if applies)
-Last 3 months payslips (if applies)
-Accountants letter telling us how long in business for
-Last 6 months bank statements from all personal accounts
-Last 6 months bank statements from the company
-Balance Sheet of Savings account
-Balance Sheet of shares or bonds

info@lusopropertyservice.com
0044 2033672096

A Post-Brexit Guide To Buying Properties In Portugal

BrexitThe UK have decided to depart from the EU, which is likely to be one of the most complicated divorces in history. What impact will this have on my ability to buy in Europe you may ask? The answer may surprise you.

There has been an enormous amount of scaremongering before and after the Referendum, facts have either been heavily distorted and ‘what if’s’ have been regarded as truths. A good example of this is the rights of expats overseas, what if France want to slam their doors shut on British expats or impose further taxation on British buyers as a non-EU citizen? Whilst these are genuine questions, one must ask why any remaining EU member would want to discourage foreign investment, tourism and more importantly, make immigration more difficult for British citizens which are a vital part of their own property market.

We will answer some of these questions in the following article, designed to help you navigate through this Brexit limbo and give you a better understanding should you with to follow your dream of buying a property in Portugal.

  • The UK voted to leave the EU – What happens now?

The UK’s vote to leave the EU is not legally binding, whilst we do not doubt that the UK will leave the single market, it is up to British Parliament to trigger Article 50 – the official framework for leaving the EU. The newly appointed Prime Minister Theresa May has purposely stalled this process, as once Article 50 is invoked, the UK-EU relationship as it stands is subject to a 2-year period of negotiations before an official departure.

At this stage it looks as though Autumn 2017 could be when this process begins, and would therefore continue until at least Autumn 2019. In reality, it is highly unlikely that a 2-year window will be sufficient given the complexities and heavily integrated policies surrounding the UK-EU relationship.

Never the less, the UK remains a member of the EU and will remain a member of the EU until at least 2019, therefore any concerns regarding changes to taxation, citizenship or employment is not an immediate concern.

  • What changes could happen once the UK withdraw from the EU?

If we assume the worst case scenario, that is, the UK loses its status as an EU member entirely, the number of changes will likely be so minimal that anyone with a genuine interest for buying in Europe will be the least bit tainted by them.

The likes of Portugal or other EU contry could impose restrictions on how often British citizens travel and stay at one time, but why would they? Given how important British tourism and their financial contributions are, discouraging this would be detrimentally harmful to a nations GDP. The new government have made clear their plans to protect the rights of EU citizens and British expats on both sides, any deviation from current arrangements would be in no interest to either party.

  • Will I have to pay more as a Non-EU member?

This will vary from nation to nation but Portugal for example, offer a flat capital gains rate of 25% irrespective of nationality. Your European Health Insurance Card (EHIC) would also give you state healthcare at a reduced rate, and depending on your circumstances will remain free for certain individuals.

There could be further red-tape as a non-EU citizen, but European countries will be conscious that in the past a long, drawn out purchasing process will discourage prospective buyers.

In regards to mortgages, property purchases and taxation, no changes will likely be made regardless of the outcome of UK-EU negotiations.

  • What about currency exchange rate changes?

As a currency exchange brokerage, we understand the importance of exchange rates and the implications of a weaker Pound. Whilst it is likely that Sterling could remain on the weaker side for some time, there are measures that could be taken to limit the exposure to currency fluctuations.

Firstly, if you need to make a transfer in the near future and have concerns that GBP / EUR exchange rates could move further against you, the option of a forward contract will protect you from further fluctuations in the market. It is likely that the Pound will lose further value in this field of uncertainty, a forward contract works by locking current exchange rates providing you with absolute peace of mind.

With the fall in value of Sterling, European property sellers repatriating to the UK may be open to negotiations in pricing given the Euro strength against Sterling. A €200,000 provides £20,000 more compared to the rate before the referendum. A deal therefore could be struck to ensure the needs of both parties are met.

That being said, there is an argument that properties in Europe could fall off the back of Brexit, lower demand for properties from British clients could drive property prices down balancing price demand with currency movements.

Under any circumstance, your decision to buy abroad should not be hampered solely by exchange rate fluctuations.

  • There is no better time to buy your dream home

There is no evidence to suggest that British citizens will be penalized for buying in Europe and whilst the UK remains a member of the EU, no such changes will even take place for at least 2 years. Thousands of British expats have made the decision to move to the likes of Australia, Canada and America, undergoing stringent visa tests and red tape. British citizens have been emigrating for decades well before the EU establishment, the UK’s decision should not in any way impact your decision to buy overseas.

With this in mind, particularly with the cooling off period before the UK officially withdraws its membership, there could not be a better time to buy your dream home in Portugal.

For more information please contact us!!!

W: www.lusopropertyservice.com

@: info@lusopropertyservice.com

F: +44 (0)2033 672 096

Purchasing Process in Portugal

The purchase of your property in Portugal can be as easy as in the UK if you seek the help of professionals that have experience in Portuguese Real Estate Business.

We recommend responsible English speaking lawyers who have been working for many years in this area and they will check all the necessary documentation.

Once you have found the property that you would like to buy. When a price has been agreed you will need to sign, with your Real Estate Agent, a letter of intent for the purchase of the property, where, in addition to the purchase price, the dates of the Promissory Contract (exchange) and the Deeds or completion, it will also list any extras to be included in the price of the property such as furniture or a golf title etc.

Your lawyer will carry out the necessary legal searches and ensure that there are no outstanding charges against the property before drawing up the Promissory contract. In Portugal a deposit of between 10 and 20% of the purchase price is generally paid upon signing of the Promissory contract. Under Portuguese legislation, if the buyer should then withdraw from the contract his deposit is non-refundable. Alternately, if the vendor should withdraw, the deposit will be refunded in double.

The Promissory contract will confirm, the details of the property, the identity of the buyers and vendors; an inventory will be attached and it will also state the date for the Deed of transfer or ‘Escritura’. This contract would normally be signed before a notary, but, since January 2009 most property transactions can be carried out by lawyers without the aid of a notary, making the process simpler and more efficient.

The purchasing process of property in Portugal, because it is subject to the payment of taxes, requires that you register with the Tax Authorities to obtain the corresponding taxpayer identification number.

Residents abroad, as well as those who, although resident in Portuguese territory, leave for more than six months, should appoint a representative residing in Portuguese territory for tax purposes. If you are a resident or if you are leaving for a member state of the European Union or the European Economic Area, the designation of this representative is merely optional. The place of residence for tax purposes is the place of habitual residence or, in the case of citizen’s resident abroad, the place of residence for tax purposes corresponds to that of the tax representative.

In order to finalise the purchase of your property, you must submit several documents that identify the property and that confirm the legitimacy of the owner and the buyer:

  1. Land Registry Certificate (Certidão do Registo Predial) The information made available by the land registry tells you about the composition of a certain building, the legitimacy of the person intending to sell the property and the types of inconveniency that may affect it (like mortgages, etc).The land registry certificate may be requested in the following ways, in hard copy or in digital format: In person, at any land registry office (Conservatória do Registo Predial). This entity holds full descriptions of properties; It is possible to request a permanent land record certificate and simplified land information through the Predial Online website

You can request all land registry documents on the Internet, at www.predialonline.mj.pt, with the exception of commencing processes to justify, rectify or oppose a registrar’s decision, regardless of the location of the building(s).

  1. Title Certificate (Caderneta Predial) This document may be requested from any tax office. It contains information about the property’s tax situation and can be used to find out which entity is responsible for meeting fiscal obligations related to the property. Property owners can get the title certificates for their properties from the tax authority website; A title search of an article in the land registry may be requested instead of a title certificate (this is only valid for one year);
  2. Usage Licence (Licença de Utilização) The purpose of the Usage Licence is to certify the intended use of the property, and that it is suitable for its licensed purpose. This licence must be requested from the City Council of the district where the property is located. However, proof of the licence request may be submitted along with the purchase agreement if the licence is yet to be issued.
  3. Housing Technical Datasheet (Ficha Técnica de Habitação) The Housing Technical Datasheet is a document that describes the main technical and functional characteristics of a property. It must be requested directly from the City Council of the district where the property is located.
  4. Energy Certificate (Certificado Energético) This must be submitted by the property owner along with the purchase agreement.
  5. Proof of prior payment of the Municipal Tax on Property Transactions involving valuable consideration (Guia comprovativo do pagamento prévio do Imposto Municipal de Transações Onerosas de Imóveis)
  6. Photocopies of the ID cards (passports) and of the taxpayer cards of the contracting parties.
  7. Exhibition of a power of attorney if any party is represented by a proxy Keep in mind that situations may arise in which the so-called legal pre-emption right may apply to the property in question, which may be exercised by the City Council or by the Directorate General of Cultural Heritage, in the case of the sale of classified property or property pending classification or located in protected zones. In these situations, you must obtain proof from the City Council or the Directorate General of Cultural Heritage that they have waived their respective legal pre-emption right (comprovativo da renúncia).

Property purchases are concluded with a registration entry in the Land Registry Office. A certificate to prove ownership of the property is issued along with this registration entry.

Luso Porperty Service will provide you with advice and support; recommending and introducing you to reliable professionals such as lawyers, surveyors, architects, designers and construction companies

Legal Expenses:

  • IMI is a variable calculation of between 0.3% and 0.8% of the property value, taking into consideration factors including age, location, construction and plot size. Before completion the purchaser must pay the IMT (Property Acquisition tax), which in 2014 for an amount up to €550.836 could vary between 1 – 8% on a sliding scale. All properties above that value are taxed at 6%. For a plot the IMT amount would be 6.5%.
  • Legal fees will include lawyer’s fees which vary between 0.8% and 1.5% of the purchase price, Stamp duty which is 0.8% and also the Land registry fee.
  • Once the Deed (Escritura) has been signed and exchanged you have ownership of the property and as soon as possible it must then be registered at the Land Registry under your name.
  • Upon the sale of a property in Portugal by a non-resident any profit will be subject to a Capital Gains Tax (CGT) of 25%. However, there are many expenses which are deductible including legal fees, acquisition taxes and official invoices for structural works done within five years of the sale

Golden Visa

New legal provisions provide the possibility for those who pursue investment activities in Portugal to apply for a Residence Permit, for example, those who transfer capital, create jobs or acquire Real Estate. The holders of a Golden Residence Permit for the purposes of investment activity have the right to family regrouping, and may gain access to a permanent residence permit, as well as to Portuguese citizenship in accordance with the current legal provisions.

WHO MAY APPLY?

Citizens involved in an investment activity, either individually or through a company conducting, at least, one of the following operations in the Portuguese territory, for a minimum period of 5 (five) years:

1) Acquisition of Real Estate with a value equal to or above 500 thousand euros;

2) Capital transfer with a value equal to or above 1 million euros;

3) Creation of, at least, 10 job positions.

It covers shareholders of companies already set up in Portugal, or in another EU State, with a stable residence in Portugal and with tax obligations fulfilled.

REQUIREMENTS ON THE INVESTMENT ACTIVITY

Performing an investment activity for a minimum period of 5 (five) years, attested by a bona fide declaration signed by the applicant.

1) Acquisition of Real Estate with a value equal or above 500 thousand euros

Provide evidence of giving the ownership of Real Estate Property.

  • Public deed or promissory share-purchase agreement of the property, with a declaration of an authorized financial institution to exercise its activity in Portugal stating the effective transfer of capital to stating the effective transfer of capital to its acquisition or to execute as a down payment of the promise to purchase in equal or superior value of 500 thousand euros and;
  • An up-to-date certificate issued by the Real Estate Registry, which must always be, in the case of contract-promise and where legally feasible, the respective register.

2) Capital transfer with a value equal to or above 1 million Euros

Provide evidence of having invested the minimum amount required, including stocks or shares of companies.

  • Declaration of a financial institution authorized to exercise its activity in Portugal certifying: the effective transfer of capital in amount of not less than €1 million euros, to an account demonstrating the investor is the sole or first holder of capital; or de acquisition of stocks or shares of companies, and;
  • An up-to-date certificate issued by the Commercial Register, certifying that the applicant holds a share in the capital of a company.

3) Creation of, at least, 10 job positions

Provide evidence of having created 10 job positions and registered the employers in the Social Security.

  • An up-to-date certificate issued by the Social Security.

MINIMUM PERMANENT RESIDENCY PERIODS

For residence permit renewal purposes, applicants under paragraph 2 may be asked to deliver evidence that they complied with the following minimum periods of permanence in National Territory:

  1. a) 7 days, consecutive or otherwise, in the 1st year;
  2. b) 14 days, consecutive or otherwise, in the subsequent two year periods.

FAMILY REUNIFICATION

The holders of Golden Residence Permits for Investment Activity have the right to family regrouping, and may gain access to a permanent residence permit, as well as to Portuguese citizenship in accordance to the current legal provisions.

DOCUMENTS

  • Passport or another valid travelling document;
  • Proof of legal entry and permanence in national territory;
  • Proof of health insurance;
  • Signed application enabling consultation of the Portuguese Criminal Record by SEF;
  • Criminal Record Certificate from the relevant authority of the applicant’s home country or from any other country where he/she resided for over a year;
  • As means of evidence of compliance with tax obligations, the applicant shall deliver a declaration proving the absence of debts issued by the Inland Revenue and Customs Authority and by the Social Security

OTHER REQUIREMENTS UNDER GENERAL LAW

  • Applicants must not have been convicted of a crime punishable with deprivation of liberty exceeding one year;
  • Applicants must not be subject of an entry ban in national territory following a removal order from the country;
  • Applicants must not be subject of alerts in the Schengen Information System;
  • Applicants must not be subject of alerts in SEF’s Information Integrated System issued for purposes of non-admission.

Retired Foreigners Tax Regime

Retired foreigners who wants to establish his permanent residence in Portugal (for tax purposes), and has not had tax residence in Portugal in the last five years, enjoys a total tax exemption for a period of 10 years. This term may be extended.

Those who benefit from a pension paid in a country with which Portugal has established double taxation agreement, will no longer pay taxes in their country of origin because is now a Portugal habitual resident and also will not pay taxes in Portugal under the special legal exemption.

There shall be considered as resident in the Portuguese territory any person who, in the year to which the income relates:

(i) Stays there more than 183 days, with or without interruption;

(ii) Having stayed there for less than 183 days, has at his own disposal on 31 December of that year a dwelling place in such conditions that it may be inferred that there is the intention to keep and occupy it as an habitual abode;

(iii) Be a member of a family unit,  since whom,  the 31 December of the year that the income relates, one  of the elements of this family unit is considered a resident for tax purposes in Portugal.

Furthermore, tax wise, Portugal offers extraordinarily comparative advantages, namely: No gift tax; No inheritance tax (between parents, sons, grandsons and husband and wife)