Guide to Buying a Property in Portugal
Remember that you can download a document explaining all of this information. This document can be printed out and has spaces for you to fill in your cost calculations.
Here is our step-by-step guide to buying a property in Portugal. Don’t be surprised if it is much, much easier than buying in the UK!
1) Via your agent, verbally agree a price for the property with the seller.
2) Complete a “contracto promessa de compra e venda” agreement. This identifies you as the buyer, identifies the vendor and identifies the property. For this we need copies of all parties’ passports as well as the property’s registration papers. With this agreement you need to include a deposit of 10% of the agreed sale price. Upon receipt of the agreement and deposit, the vendor signs the contract.
3) The above agreement states that you have 3 months (usually) in which to buy the property. You can buy at any point, but cannot let 6 months pass. If you do not buy the property, you lose your deposit. If the owner does not sell you the property, he reimburses your deposit in double.
4) Next comes completion, or “escritura”. Before escritura your lawyer will help you get a Portuguese tax number and pay your purchases taxes. These can be calculated using the chart to the right and are correct as of 2010.
5) At escritura, you and the vendor sit around a table at a notary’s office. The agreement is read out in English and Portuguese, you give the vendor the remaining monies and he gives you the keys to the house. You then all sign the agreement and the property is yours.
6) Throughout the entire process Coimbra Property Shop is there to help and guide you. Our clients are always wonderfully pleased with the purchase process and how simple it can be when organised correctly.
How to Work Out Your Taxes
There are some costs which don’t change no matter what property you buy. These are:
Completion (Escritura) – €450 at most.
Building Registration – €250
Land Registration – €50
Stamp Duty – 0.8%
The taxes which do change are the “IMT” purchase taxes.
The IMT is easy to understand. It works like this:
*The purchase taxes are calculated on a sliding scale depending on the value of the property.
*There are two sliding scales – one for permanent homes (more than 180 days per year) and one for holidays homes (less than 180 days per year).
*The only properties which do not have a sliding scale nor discount are Land and Construction Land, which are always: Land – 5% and Construction Land – 6.5%
Often in Portugal a property will be divided into various invisible tax articles. The house may be one urban article, the land a rustic article and the field another rustic artcile, for example. When buying a property where there is more than one article, you must decide how much value to give to each article when paying taxes.
| Occupied 180 Days Or More Per Year | ||
|---|---|---|
| Property Price | % Taxed | Discount |
| Up to €92,407 | 0% | 0 |
| €92,407 – €126,403 | 2% | €537.90 |
| €126,403 – €172,348 | 5% | €1,727.40 |
| €172,348 – €287,213 | 7% | €3,836.10 |
| €287,213 – €574,323 | 8% | €11,608.95 |
| over €574,323 | 6% | - |
| Occupied 179 Days or Less Per Year | ||
|---|---|---|
| Property Price | % Taxed | Discount |
| Up to €92,407 | 1% | 0 |
| €92,407 – €126,403 | 2% | €1,268.90 |
| €126,403 – €172,348 | 5% | €2,263.60 |
| €172,348 – €287,213 | 7% | €4,157.80 |
| €287,213 – €574,323 | 8% | |
| over €574,323 | 6% | - |
Download a document explaining all of this information for you to print and fill-in with your costs.
