Buying a property in Portugal
General considerations

 

Is there any special attention needed?
Buying property in Portugal is quite an easy process that you can do through any property representative or even directly from current owner, even so it is adviseable to use a specialized and fully licensed estate agency company who can advise you and assist you throughout the process whilst guaranteeing that the legal process is correctly followed. To make sure that your estate agency is fully licensed you should ask to see a copy of its IMOPPI registration certificate.

Do I pay a deposit to the vendor?
A deposit is not normally paid immediately to the vendor, but the selling agent will accept a reservation deposit on behalf of the vendor. There is no fixed amount for the deposit, but 1,000 euros is normally sufficient. This deposit is paid by cheque or bank transfer, and will ensure the property is taken off the market until contracts can be exchanged. At the exchange of contracts a deposit of 20% of the purchase price is normally paid to the vendor.

When are the contracts exchanged?
After acceptance of the offer by the vendor and payment of the reservation deposit, the next step is to exchange promissory purchase and sale contracts. This normally takes place up to about 3 to 4 weeks after the reservation is made.

Is a Portuguese lawyer/solicitor necessary?
Strictly speaking, it is not essential, but we at Portugal House strongly recommend using a lawyer. The legal process is very straightforward, but your lawyer is able to perform many tasks to protect your interests, for example

1. The title of the property is checked.
2. The person selling the property actually owns it.
3. Whether there are any charges or mortgages on the property.
4. Building licenses and habitation permissions are in order, where applicable.
5. Any other terms specified by the seller are legal, fair, and reasonable.

Under Portuguese law, all the conveyancinge can be done by your lawyer, if you are unable or prefer not to make another trip to Portugal to complete your purchase. Anyway, having instructed a solicitor or a lawyer to handle the purchase, you have the reassurance that all the important aspects will be covered before the title deed being signed in the Notary’s Office and the completion reached with the last payment made.

After completion he will then arrange:

1. The transfer of the title into your name.
2. for any fees and taxes to be paid.
3. for the title in your name, to be registered in the Local Land Registry office.

We can help arrange for all the utility contracts to be changed to your name, such as:

1. Gas
2. Electricity
3. Water

What is a notary?
A notary is the office where the formalization of the sale will take place. He checks that the title deed and purchase are in order before the completion and final payment is made, and the Title Deed (Escritura) being finally signed.

What do we need to open a bank account?
To open a bank account you must bring with you:
Passport; Proof of affiliation e.g. birth certificate; Proof of residence e.g. any utility bill; proof of employment e.g. pay slip; a Portuguese contributor’s number (which can quickly be obtained in any medium sized town upon production of a passport).

What if we need a mortgage?
We can recommend Portuguese banks that specialize in offering mortgage facilities to foreign purchasers. We also help you with the paper work. In order to start the process you need to have a proof of income, and a bank
statement.

Are there any additional fees to pay like stamp duty in the UK?
Yes there are.

The chart below will give you an idea about the extra costs, on top of the purchase price, to cover fees including conveyance, stamp duty, the notary and property registration and transfer tax. The approximate costs, depending on the property purchased, are as follow:

Amount of the purchase	Lawyer	Taxes, notary and registrations	Total
100.000	684,00 €	1.500,00 €	2.184,00 €
150.000	684,00 €	4.200,00 €	4.884,00 €
200.000	684,00 €	7.960,00 €	8.644,00 €
250.000	684,00 €	11.980,00 €	12.664,00 €
300.000	684,00 €	16.250,00 €	16.934,00 €
400.000	684,00 €	24.950,00 €	25.634,00 €
500.000	684,00 €	33.850,00 €	34.534,00 €
750.000	684,00 €	51.700,00 €	52.384,00 €

What are my ongoing commitments and obligations?
Once all the buying process is over and you get the ownership of the property you have to pay Council tax
of between 0.2% and 0,5%, depending on the council, of the Financial Fiscal service valuation.

Are properties freehold?
Yes always.

Who pays commission?
The vendor pays our commission; you the buyer pay no fees or commission.

Any more questions?
If you require any further information, or have any questions please do not hesitate to contact us!

The Next Step
This is just a guide to buying a property in Portugal. Though the matters themselves are sometimes more
involved than indicated here, the whole process is usually smooth and trouble free. So take the next step to owning a property in Portugal, simply contacting us to discuss your needs and requirements, and/or to arrange an inspection visit.