Rules and procedures
It is essential that you as the client always ensure that the business you are dealing with is a Government licensed agent, to ensure you have legal protection. Every licensed agent is required to display their license in their office, and on all advertising.
In order to purchase a property in Portugal the following documents will be needed:
Land Registration (Certidao de Teor)
This document can be obtained from the Land Registry (Conservatoria), and it proves that the owner owns the property as well as whether or not the property has any loans or mortgages outstanding on it. There is a description of the registered details of the property, such as area of construction and land, type, location, boundaries which should match the actual property.
Financial Registration (Caderneta Predial)
This document is obtained from the Tax Department (Financas) and is the financial registration of the property. The document also provides information about the rate able value.
Caderneta Rustica
this is a similar document to the financial registration, as it provides the same information, however it is only required for rustic properties.
Habitation License (Licença da Habitação/Utilização)
The document ensures that the property is in accordance with the plans submitted to the council, whereas properties for other uses (eg storage) are required to have a utilization license, rather than a habitation licence. Properties constructed before 1951 are exempt from this requirement.
BI (Ficha Tecnica)
All house which were completed after the 30th March 2004 must have a ficha tecnica, which gives technical details of the construction type, materials etc. This document is provided by the constructor of a property.
Your lawyer is required to check that all the above documentation is in order before a sale is finalised, before drafting a promissory contract which is then signed in front of a notary by both the buyer and seller.
Taxes and financing
If you are in need of more information regarding property purchase in Portugal, do not hesitate to contact us. However, professional legal advice should be sought at all times – the following cost information is only to be used as guidelines.
Legal fees
These will vary but expect to pay around 1.5-2% of the purchase price.
Notary and registration fees
variable, (for example fees are higher when you have a mortgage on a property). However, you can be expected to be 1.5-3% of the purchase price.
IMT (transfer tax)
This is the tax you must pay before the final deed. The tax to pay depends of the price the property is declared. In the following table you have the tax due for the year 2005 on residential property. On rural land the tax is 5 %Value of the property transaction (in millions)
Under € 83.500 0 %
From € 83.500 to € 114.800 2 % € 1.670,00
From € 114.800 to € 156.500 5 % € 5.114,00
From € 156.500 to € 260.900 7 % € 8.244,00
From € 260.900 to € 521.700 8 % € 10.853,00
Over € 521.700 6 %
Example for a property price € 100.000,00
€ 100.000,00 X 2% = € 2.000,00
€ 2.000,00 - € 1.670,00 = € 330,00 Transfer tax to pay.
