Procedures and costs of a property purchase in Portugal

(2024)

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Purchasing process

The process of acquiring a property in Portugal contains similarities with that of France:

1. Before purchasing and concluding a deal, when the offer is accepted, the Sales Agreement (Contrato-Promessa Compra e Venda) must be signed. It is a document that establishes the commercial conditions for the purchase and sale of an agreed real estate property. It benefits both established parties, seller and buyer and guarantees the validity of the contract until the day it is drawn up, guaranteeing that the transaction will be concluded within the allotted time.

On the one hand, it now establishes legal parameters regarding cases of non-compliance, thus avoiding possible judicial shortcomings. This way you will have additional security if you need to defend yourself in front of the law.

It should also be noted that, legally, with the signing of a promise of purchase and sale, the buyer acquires the real right to acquire the property in question, regardless of its owner at that time.

In the case of the purchase of real estate, the following information must normally appear in a draft CPCV:

  • Identification of the parties concerned (buyer and seller): full name, address, marital status, citizen card number/identity card, taxpayer number (TIN);
  • Identification of the property (typology, location, existence of parts linked to the property, such as garage and storage room, for example, matrix registration and description of the building);
  • The purchase price of the house as well as the respective payment method;
  • The value given as a signal and its reinforcements, if stipulated;
  • Estimated date for carrying out the act;
  • Indication of the sanctions to be applied if the act is not carried out within the time limit;
  • Building permit issued by the Town Hall or proof that it has been requested from the municipality;
  • Clause of sale free of all charges or encumbrances (which protects the buyer by relieving him of the responsibility to respond to any charges weighing on the property, such as mortgages or foreclosures).

2. Once the CPCV is signed, the buyer pays the seller at least 10% of the value of the house.

3. The final act is the transfer of ownership of the property to the buyer and is signed on a date specified in the letter of intent at the notary.

4. The balance of the purchase is then paid with the appropriate taxes and the notary officially records the transaction. The buyer’s lawyer registers the new owner in the land register and usually also ensures that utility bills are put in the new owner’s name.

Costs incurred by purchasing a property in Portugal

Portugal continues to attract people looking for a life in the sun, however before you start looking for the house of your dreams, it is important to be well informed about Portuguese taxation in the event of the acquisition of property. .

There are several taxes to pay to become an owner:

1. The IMI (Municipal Property Tax)

The rates are set annually by the Municipalities of the area where the buildings are located, which currently fall within the following range, in accordance with article 112 of the IMI Code:

  • Between 0.3% and 0.5% for urban buildings.

2. The IMT (Municipal Tax on Expensive Real Estate Transfers)

Payment of tax is obligatory whenever there is a transaction that involves the right to ownership of a good (new or used) located in the national territory.

This tax, always the responsibility of the purchaser, must be paid before the process is completed, that is to say before signing the deed. The amount to pay varies depending on the purchase price.

To calculate your IMT, click here

When purchasing real estate, it is necessary to pay IMT if:

  • The property, if it is personal and permanent housing, has a sales value of more than 97,064 euros, on the continent, and 121,330 euros in the autonomous regions;
  • A contract of promise of purchase and sale is concluded and the future purchaser has the possibility of transferring his contractual position to another person.