Properties
The properties on this web site are advertised for registered Portuguese Estate Agents, individual owners or business buying and selling property.
Buying a Property
The Portuguese property purchasing process can be fairly straightforward and offers good protection for both buyer and seller.
Problems arise when the seller has not properly prepared the paperwork.
They might well believe that the paperwork is in order, only to find that the requirements have changed recently without their knowledge.
New E.U. and government regulations are coming into effect and the original papers may need to be re-certified to bring them up to date and the bureaucratic system itself slows the process down.
Multiply ownership can also be a problem as it may be difficult to track down the part owners.
In the past property was passed down and divided amongst the children when the parents died. The last 60 years has seen many Portuguese emigrating all over the world, so contacting them, persuading them to sell, and to sign, can prove difficult.
An estate agent should have researched the deeds and registration documents before putting the property on the market. They are accountable, you can complain and be compensated if there is a problem. Apart from having a greater legal footing, generally it is advisable to buy though an estate agent rather than an individual owner.
They will normally take care of all the below formalities for you saving you time, money and frustrations.
Fiscal Number (Numero Fiscal de Contribuinte)
Firstly, to purchase property in Portugal, you will need a fiscal (tax) number (Numero Fiscal de Contribuinte). Applying for a fiscal number is a simple procedure and you will be issued with your number immediately. The cost of applying for a fiscal number is about 5 euros. You will also need this number to open a portuguese bank account.
Go in person to your local tax office (Repartição de Finanças), as well as proof of identity (your residency card, identity card o r passport), you will need an address in Portugal to which the tax office can send your fiscal card (Cartão de Contribuinte). If you do not yet have a Portuguese address you will normally be able to use that of a solicitor, estate agent, or a friend. If/when you change address you must report to your new tax office or Taxpayers Advice Office (Serviço de Apoio ao Contribuinte). Most towns have a tax office.
Contract To Buy (Promessa de Compra e Venda)
Once you see a property you like, and have your offer accepted, you will normally sign a promessory contract (Promessa de Compra e Venda) with the owner (in which you promise to buy the property, and the owner promises to sell it to you, at an agreed price and within an agreed timescale). At this point you will pay a deposit (normally 10% of the purchase price) and agree on a date (normally anything up to 6 months) by which to complete the purchase.
Other conditions may also be specified in the promessory contract, such as completion of any building work, connection of electricity, etc. If you fail to complete the purchase you will lose your deposit, and if the owner fails to complete the sale they must repay you twice the amount of your deposit. It is not necessary to have the Promessa de Compra e Venda drawn up by a solicitor, but we would recommend that you do.
If you want to speed up the purchase of the property, and pay the total purchase price at once, it is not always necessary to complete a promessory contract. If you choose this option, we would highly recommend that you consult a solicitor.
Purchase Tax (IMT)
You must pay any purchase tax (IMT) at least 3 days before you complete the sale and proof of payment must be shown to the notary. IMT for land only (prédio rustico) is 5%. IMT on other properties is on a sliding scale based on the value of the property.
Completion of Sale
To complete the sale, you (or the owner, or your/their solicitor) must make an appointment with the Notary. All parties involved in the purchase/sale must attend at the Notary's office, unless you have granted someone power of attorney to act on your behalf (see below). If you don't speak portuguese you must have a translator present, and you must take with you all the relevant documents (your solicitor will normally organise this).
You and the sellers will be read the Deed of Purchase and Sale (Escritura Publica de Compra e Venda) which you will then all sign. You must now pay the balance of the purchase price. The property is now yours, but you must still take an official copy of the escritura (which you get from the notary) to the land registry (Conservatória do Registo Predial) to have the property registered in your name. If the property is to be your main residence you will normally be able to claim the first 6 years free of rates (IMI), as long as you take up residence within the first six months after registering the property in your name.
Necessary Documents for Purchase/Sale of Property
- Certidão de Teor showing if there are any outstanding mortgages on the property and if the property is registered in the owner's name.
- Caderneta Predial, from the Fiscal Department (Finanças), detailing the size of the property, its location and boundaries, and a brief description. In the case of land there may also be a drawing of the plot.
- Confirmation from the Tax Department (Finanças) confirming that all the rates bills (IMI) are paid. This is important as any outstanding IMI tax will stay with the property and be the responsibility of the new owners.
- Proof of payment of IMT.
- Houses built or altered after 31 December 2003 should have a "Ficha tecnica de habitação", containing information about the property such as builder's details, type of materials used and suppliers, etc.
- Identification documents and tax numbers of the owners and buyers.
- Power of attorney and the representative's identification document and tax number (if applicable).
If the seller is a company, they will also need to provide:
- Certidão Comercial, issued by the Conservatória do Registo Predial which identifies the partners as well as what powers they have in the company.
- Identification documents and tax numbers of the company partners/owner.
- Power of attorney from the other partner(s) of the company to those signing the Deeds (if applicable).
Paying for your property / transferring funds
You may find it beneficial to open a Portuguese bank account to pay for the purchase of property, taxes, solicitors, etc. and utility bills, rates, etc. that you will need to pay when owing a property in Portugal.
There are a number of companies specialising in foreign currency exchange, especially for the purchase of property abroad, who often offer a much more favorable rate than banks. One such organisation is Foreign Currency Exchange
Power of Attorney (Procuração)
If it is not possible for you to be present to sign the escritura, you may grant someone power of attorney (Procuração) to act on your behalf. The easiest way to grant a power of attorney is whilst you are in Portugal, at the Notary's Office. Otherwise, the power of attorney can be prepared by the Portuguese Consulate in your country of residence, or by a local notary - but in this case it must be accompanied by a Notary Certificate of Apostille of the Hague Convention and translated into Portuguese.
Portuguese Mortgages and how they work
All mortgages are full status and proof of income and outgoings will be required. Portuguese mortgages can be arranged for acquisition, renovation & construction and the mortgage is secured on the property in Portugal.
A deposit of 20% of the purchase price is required and you will also be liable for solicitor's fees. Either Euro mortgages are available for a minimum loan amount of €75,000. They are Repayment loans and can be taken over a 5-20 year term. All mortgages should be fully repaid by the age of 65 and life cover is required.
Portuguese lenders assess eligibility for a loan on the applicant's ability to service the loan and not potential rental income from the property. The general guideline is as follows: of an applicant's net income 35% should cover existing outgoings and the monthly repayment on the Portuguese loan. If you are self-employed income is assessed as the average of the last three years' net income. Rental & investment income will also be considered. If employed a lender will base your income on your pay slips and the amount that is credited to your account monthly. Outgoings considered are liabilities such as mortgage/rent in the UK, personal loans & maintenance commitment.
For example - If you have a net monthly income of £2000 with a UK mortgage of £500 and no other outgoings. Taking into account 35% of the income, that is £700, a borrowing with a monthly repayment of £200 could be considered.