Purchase of property procedure in Portugal
Once the buyer has found a property they wish to purchase the lawyer acting on there behalf normally requires a 10% deposit, once this has occurred the vendor removes the property from the market. The buyer’s lawyer will then undertake any relevant searches needed and establish the rightful ownership of the property.
A contract will then be drawn up and the buyers deposit passed over to then vendor’s lawyer. As with all property purchases if the purchaser wishes to withdraw from the purchase the deposit will be forfeited.
If the vendor withdraws from the sale they will have to return to the purchaser double the amount of the original deposit.
Once all the relevant monies are in place a date will then be arranged for the signing of the deed, this normally takes place 4 weeks after the initial contract.
There are necessary legal documents required when purchasing a property in Portugal these are as follows…
Property registration certificate ( Certidao de Teor).
This document ensures that the seller is the owner of the property at that no-one else has any rights. It also ensures that it is both free of any charges and mortgage arrears.
Property tax document ( Caserneta Perdial)
This is document that certifies the tax rate on the property and also the size, i.e. number of rooms, area or plot. In this document it will state how much the owner will pay in tax on the property. This does not apply to new builds. If the property is new build then the owner will receive a form to fill in.
Licence of use (Licenca de Utilizacao)
The document is obtained from there local town hall. With this document you can check if approved for the uses the buyer’s wishes to use it for. For a residential property it is necessary to have a habitation licence. This document is necessary to be present for both the buying and the selling contracts in the presence of the Notary.
Personal Fiscal Number (Numero fiscal de contriduinte)
The buyer needs a personal Fiscal number which can be obtained from the local tax office.
Final deed (Escritura)
The title deed of the property, all the mentioned documents are necessary to obtain this.
Registration (Registo)
The buyer must register the property in the land and tax office.
Purchasing costs.
• Surveyor costs are approx between ¼% and ½% of the value of the property.
• Lawyer to act on your behalf will cost between 1.5% up to 2% of the value of the property.
• IMT (similar to stamp duty) can be anywhere between 0% for a property under 80,000 euros up to a max of 6%.