Advice on buying Property in Portugal

You have found a property you wish to purchase in Portugal what next?

Buying Property in Portugal - Costs of Purchasing Property

Buyer's Guide explains the legal fees, legal procedures, purchase taxes and mortgage procedure.

Successfully Buying a Property in Portugal

Generally, no special permission is required to buy a property in Portugal, a member of the European Union (unless it is in a sensitive military area).

Below are some brief points in purchasing property in Portugal.

The Importance of a Portuguese Lawyer
As the Portuguese legal systems are different to Britain's and Ireland's, your lawyer in Portugal will make checks and enquiries on your behalf, the whole process is little more troublesome than the buying and conveyancing of a property in the UK or Ireland.
Amongst other things, the lawyer will check that the vendor owns the true title to the property in Portugal, that the property is free of any liens or mortgage and that the contractual documentation is fair and reasonable and that the vending company is of good standing.
Problems can arise when prospective buyers decline to use a lawyer in Portugal and later find legal complications, which affect their ownership rights.
Having instructed a lawyer in Portugal to handle the property purchase, you have the reassurance that all the important aspects will be covered.
1. The title of the Portugal property is checked.
2. The person selling the property actually owns it.
3. Whether there any charges on the property.
4. Building licenses and permissions are in order, where applicable.
5. The terms and conditions stipulated by the seller are checked for fairness.
6. A report of the findings in then compiled for you to consider, before proceeding with the Portugal property purchase and signing of Promissory Contracts

After the signing of the contracts your lawyer will then arrange:
1. The transfer of the property title deed into your name.
2. For any fees and taxes to be paid.
3. For the property title deed in your name, to be registered in the Local Land Registry.

Unfamiliar Terms
Escritura
The Title Deed, proving who is the owner as well as describing the Portugese property in detail. In the case of a plot of land, the Escritura is only signed once you are satisfied with the preliminary investigations and arrangements for the final payment have been made. In the case of an apartment, townhouse or completed villa the Escritura is only signed after you have inspected the property and the Local Portugal Authority has issued the Habitation Licence. You will either attend the signing in person or grant your lawyer a Power of Attorney to attend and sign on your behalf. The Escritura is signed in the presence of a Notario.
Portugal Notario
The public official who is present to officially certify that the title deeds have been exchanged and understood by the parties concerned. After the signing, the notario witnesses' payment, or an acknowledgment that the payment was been made, this fact is incorporated in the title deed. The notary is completely impartial and offers no advice.

Registering Your Portugal Property
After the signing of the Escritura, your lawyer takes it to the Local Land Registry for registration and payment of registration fees. The registration process can take several weeks; your lawyer will handle this.
The Name On The Deeds
You should decide whose names are going to be registered as the final owners of the property before contracts are signed as there could be tax implications if you decide to change this between the signing of contracts and the Escritura. Inheritance tax and change of ownership taxes and fees may be levied when your Portugal property changes hands in the future. It is therefore advisable to take this into account during the purchase process purchase. Your lawyer and Fiscal Representative can help you with these decisions.

A Guide To The Costs
Lawyer's fees will vary from practice to practice, usually between 1% and 2% of the value of the Portugese property. Their services include, advice about contracts - investigation of the title - planning permission status - reporting about enquiry results - exchange of contracts and completion, and notary attendance.
Other Costs
Notary and land registry fees around 1,5%
IMT Tax (Stamp Duty) 6,5% on any land purchase
IMT Tax (Stamp Duty) between 6% and 0% based on a sliding scale depending on the sale price of apartment, townhouse or completed villa purchase.
Annual Council Tax. Charged at up to 0.8% of the Local Authority valuation of the property

Living And Working In Portugal
Should you decide to live or work in Portugal you will require a Residency Permit and various business licences. You may have to consider importing a car, furniture, or pet, as well as payment of pension, National Insurance and other related matters.

In The Event Of Death
Jointly owned property does not automatically pass in full to the surviving spouse or partner, but is dealt with according to the wishes expressed in a will, or under the rules relating to intestacy. Whilst it is not compulsory it is much cheaper, quicker and more straightforward to make a will in Portugal.

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These guidelines are meant for guidance only and describe a straightforward purchase scenarios. However this information is not meant to replace proper legal advice, which we always insist you take.

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