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:
- 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).
- 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);
- 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.
- 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.
- Energy Certificate (Certificado Energético) This must be submitted by the property owner along with the purchase agreement.
- 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)
- Photocopies of the ID cards (passports) and of the taxpayer cards of the contracting parties.
- 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
- 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