Buying a property is one of the biggest investments you will ever make. Before proceeding with the process, make sure you have done all the necessary research.
Make sure you use the services of a qualified Real Estate Agent (make sure he is licensed and has an AMI number).
The Pink Real Estate Lda team, License No. 7285 has been in the real estate business for 15 years and will keep you informed of all matters related to the purchase process, including all necessary fees, taxes, bank mortgages and legal issues.
Once you choose the property you want to buy, compare prices and your proposal has been verbally accepted, insist on having the documents updated to ensure that the seller is the registered owner and has all the licenses, be SURE your lawyer checks all relevant documents.
A preliminary contract (Promissory Purchase and Sale Agreement) sets out the terms of the sale, including the completion date. At this time, a 10% deposit is normally paid. If you give up the purchase you lose the 10% deposit. If the owner withdraws, he must pay twice the deposit amount. Make sure that any verbal agreement made with the seller during negotiations is written when you sign the Promissory Purchase and Sale contract.
In Portugal, properties are usually sold with a title deed. In an apartment or property, there are two other aspects to mention, namely the Horizontal Property and the condominium system.
The Portuguese law applicable in these areas is quite complete. It is a means of creating a freehold identity for a property that is part of a larger building, with common ownership of land, stairs, gardens, etc.
Certidão de Teor
This certificate has a complete description of the registered legal history of the property and will reflect any mortgage. The certificate is obtained from the Land Registry Office and is usually issued with an expiration date.
This license is proof that the property has been approved for the purpose being used, for example residential or commercial use.
When all the conditions established in the Purchase and Sale Agreement have been fulfilled, the Deed is made and signed by both parties at the offices of a public notary. This is fetively the last contract. It is usually at this point that the last payment is made. This occurs after the notary witnesses the act and has verified and verified all legal aspects of the entire transaction, including determining the payment of the purchase tax (IMT) and that all parties are in agreement with all the terms and conditions of the transaction. . The original Deed is held by the notary and a registered copy is kept at the Public Registry offices. The buyer obtains a certified copy of the deed when applying for the connection of all respective services at the local municipal offices.
Make sure you get, in advance, an estimate of all fees and costs involved in buying the property, including lawyers, notary, property transfer tax, etc.
Registration is the last procedure for registering the purchase of the property, it is done at the Land Registry Office in the area where the property is located as well as at the offices of the local Finance Department. There will be acquisition costs paid at registration including registration costs, stamp duty, notary costs and other miscellaneous costs.
Acquisition cost, Transfer tax (IMT)
Since January 2004, the transfer tax has been known as IMT ("Municipal tax on onerous transfers") and is calculated on the higher of the two taxable values (predetermined value or purchase price):
- Residential (houses and apartments) 0-6%
- Agricultural land and rustic property 5%
- Urban, land for construction or trade 6.5%
- Only when the buyer is domiciled in a tax haven, known as offshore 15%
It is advisable to have a lawyer check the property's documentation. Most lawyers speak English. In Portugal, lawyers must belong to the bar. You can check your registration number online: www.oa.pt.
Stamp duty: 0.8% on the purchase price.
Open a bank account
All Portuguese banks are part of a national group of banks called Multibanco. This makes accounts easily accessible and account holders can use an ATM debit card at ATMs across the country and to purchase most goods.
Non-EU citizens need the following to open a bank account in Portugal:
Proof of address in the country of origin
Taxpayer card and proof of employment
Companies typically charge an initial fee of approximately € 250, and an annual fee of approximately € 250 for the services described above.
Solicitors charge between 1-2% of the purchase price plus VAT.
Property registration fee
You will have to register the purchase at the Land Registry Office of the area in which the property is located and at the Tax Office. The costs are as follows:
- Acquisition record 250€
- Mortgage registration 250€
- Extras 100€
When the notary's imprisonment was made official, the notary's fees changed substantially and now depend on the office where the Deed is signed. The Public Deed of Purchase and Sale must be drawn up, signed by both parties in front of a public notary and presented to the Conservatoria do Registo Predial, with copies for the parties involved.
IMI - Annual Property Fees
IMI is an annual property tax.
0.8% for rural properties;
0.2 to 0.5% for urban buildings (houses, apartments, offices and commercial spaces), when the taxable equity value was updated according to the new rules;
0.4 to 0.8% for urban buildings that have not yet been revalued according to the new rules;
1% for any property owned by residents of the territories listed as "tax havens" or tax-reduced households by the Ministry of Finance.
This rate increases to 2% if the property is empty for periods longer than a year.
Where there is a spread, the actual rate is determined annually by the City Council of the area in which the property is located, and may exceed the limits in special circumstances.
The calculation of the IMI is based on the values recorded in the Property Matrix on December 31 of each year, and is due at the end of April of the following year. If the amount exceeds € 250 it can be paid in two installments, the first at the end of April, and the second at the end of September, the year following the year in which the tax applies.
When an urban property is used as a permanent and personal residence, some exemptions apply. The number of years of exemption depends on the taxable equity value (TAV) as follows:
Years of taxable assets Exemption Amount
Up to € 150,000 6 years
€ 150,000 to € 225,000 3 years
Greater than € 225,000 without exemption