Buy a house in Portugal | Expats Portugal | What You Need to Know

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What do you need when buying a house in Portugal?

Fiscal Number (NIF)

Before you can purchase a property, you will need your unique Fiscal Number (Número de Identificação Fiscal). You can apply for a NIF number through your local Finanças (tax office) in Portugal or at a local Citizen Shop. If you want to apply from outside Portugal, you can obtain a temporary number through a Portuguese lawyer.

The Estate Agent

Government licensed estate agents can be recognised by their AMI number. The average fee for estate agents is 5% of the sale value (plus IVA). This is payable by the seller and included in the sale price. Whilst this fee is quite high, a good agent will work hard to secure and complete a sale and should assist you through the entire buying process.

The Lawyer

Portuguese lawyers are registered with the Portuguese Law Society and will have a registration number that you can check. If you don’t speak Portuguese, ensure you appoint an English speaking lawyer. Your estate agent can probably recommend a local lawyer and you can browse our Business Directory for Expats Portugal parnters.

The lawyer’s fee is on average 1% to 1.5% (plus IVA) of the purchase price, payable by the buyer. The lawyer will handle all documentation and cross-reference the information with the tax office and land registry. He or she will determine if a Power of Attorney is required, draw up the contracts, oversee signing, pay all fees and register the sale with a public notary.

Promissory Contract

Once a purchase and price are agreed, it is usual for both parties to sign a promissory contract. In this document, the buyer promises to buy the property and the owner promises to sell at an agreed price and timescale. It is usual to agree on a completion date within 6 months of signing the contract, although this can be negotiated.

The promissory contract will be drawn up by the lawyer. On signing, the buyer will then pay a deposit (usually 10% of the purchase price) through the lawyer. The promissory contract protects both parties. Under Portuguese law, if the buyer does not proceed the deposit is payable to the seller. If the seller does not proceed, double the deposit is payable to the buyer or they can be forced to complete.

Once the terms of the promissory contract have been met, the buyer and seller (or their legal representatives) will meet again usually with the lawyer and estate agent in attendance. The buyer will pay the balance to the seller, the property will be registered to the new owner and the keys will be handed over.

 

Documents

  1. Property Tax (Caderneta Predlal) – this certifies the description of the property for fiscal tax purposes.
  2. Property Registration (Certidão de Teor) – this is issued by the land registry and proves that the seller has ownership of the property, that it is free of charges and mortgages and no one else has rights to the property. This is required for the deeds.
  3. Habitation Licence (Licença de Utilização) – this is issued by the local town hall (Câmara) and it proves the original building permission. This is required for the deeds.
  4. Ficha Técnica – this is required for all properties built after March 2004 and explains the construction of the property and the materials used.
  5. Energy Certificate – this shows the energy efficiency rating of the property and is a legal requirement for all properties that are advertised commercially for sale or rent. Buildings with a construction license issued prior to 2006 must have an energy certificate but are not required to meet any particular grade. Buildings with a construction license issued after 4th July 2006 must meet the standards of grade B or above.
  6. Confirmation from the tax department (Finanças) – this confirms that all annual council tax (IMI) has been paid.
  7. Proof of IMT payment – the property transfer tax (IMT) must be paid before a sale can be completed.
  8. ID and Fiscal Numbers – for the buyer and seller.
  9. Certidão Comercial  – this is issued by the Conservatória do Registo Comercial if a company is involved in the transaction.

Other costs to consider

  1. IMI (Imposto Municipal sobre Imóveis) – this is an annual (or monthly) tax for local services and is similar to the council tax in UK and the housing tax in France. It is based on the tax value of the property and is payable from the date of purchase. Rates vary from 0.3% to 0.8% and there are some exemptions. The estate agent will be able to advise the exact amount on the chosen property.
  2. Stamp Duty (Imposto de Selo) – this is payable by the buyer and charged at a flat rate of 0.8% of the value of the property.
  3. IMT (Imposto Municipal sobre as Transmissões Onerosas de Imóveis) – this is payable by the buyer at the time of sale. The rates vary depending on the value and location of the property and there are certain deductions depending on permanent habitation or use as a second home. Currently, the fee for a property valued at €150,000 for permanent habitation will be approximately €1,860. The estate agent will be able to advise the exact amount on the chosen property.
  4. Notary and land registration. In general, this is approximately €600. The estate agent or the lawyer will confirm the exact amount.

Note

It is not normal practice to conduct any kind of search regarding future development plans that may impact on your chosen property. For example, major road or new building development close by. It is also not a normal practice to conduct any kind of structural survey on your chosen property. These can be obtained at an additional cost.

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