Fiscal Number
Firstly, to purchase property in Portugal, you will need a fiscal. Applying for a fiscal number is a simple procedure and you will be issued with your number immediately. The cost of applying for a fiscal number is about 5 euros.
Go in person to your local tax office , as well as proof of identity ( passport), you will need an address in Portugal to which the tax office can send your fiscal card . If you do not yet have a Portuguese address you will normally be able to use that of a solicitor, estate agent, or a friend.
Promessory Contract
Once you see a property you like, and have your offer accepted, you will normally sign a promessory contract with the owner in which you promise to buy the property, and the owner promises to sell it to you, at an agreed price and within an agreed timescale. At this point you will pay a deposit (normally 10% of the purchase price) and agree on a date by which to complete the purchase. Other conditions may also be specified in the promessory contract, such as completion of any building work, connection of electricity, etc. If you fail to complete the purchase you will lose your deposit, and if the owner fails to complete the sale they must repay you twice the amount of your deposit. It is not necessary to have the Promessory drawn up by a solicitor, but we would recommend that you do.
If you want to speed up the purchase of the property, and pay the total purchase price at once.
Purchase Tax
You must pay any purchase tax (IMT) at least 3 days before you complete the sale and proof of payment must be shown to the notary.
January 2007: There are now 2 different scales for IMT, one applies to permanent residences and one for second homes.
IMT on other properties is on a sliding scale based on the value of the property:
PERMANENT RESIDENCES:
Purchase price (euros) |
Percent of |
Tax Band |
up to 85,500 |
0 |
0 |
85,500 - 117,200 |
2 |
1,710 |
117,200 - 159,800 |
5 |
5,226 |
159,800 - 266,400 |
7 |
8,422 |
266,400 - 532,700 |
8 |
11,086 |
over 532,700 |
single rate of |
6% |
SECOND HOMES / HOLIDAY HOMES:
Purchase price (euros) |
Percent of |
Tax Band |
up to 85,500 |
1 |
0 |
85,500 - 117,200 |
2 |
855 |
117,200 - 159,800 |
5 |
4,371 |
159,800 - 266,400 |
7 |
7,567 |
266,400 - 511,000 |
8 |
10,231 |
over 511,000 |
single rate of |
6% |
Completion of Sale
To complete, you (or the owner, or your/their solicitor) must make an appointment with the Notary. All parties involved in the purchase/sale must attend at the Notarys office, unless you have granted someone power of attorney to act on your behalf (see below). If you dont speak portuguese you must have a translator present, and you must take with you all the relevant documents (your solicitor will normally organise this). You and the sellers will be read the Deed of Purchase and Sale which you will then all sign. You must now pay the balance of the purchase price.
The property is now yours, but you must still take an official copy of the escritura (which you get from the notary) to the land registry to have the property registered in your name. If the property is to be your main residence you will normally be able to claim the first 6 years free of rates (IMI), as long as you take up residence within the first six months after registering the property in your name.
Necessary Documents
Certidão de Teor showing if there are any outstanding mortgages on the property and if the property is registered in the owner's name.
Caderneta Predial, from the Fiscal Department (Finanças), detailing the size of the property, its location and boundaries, and a brief description. In the case of land there may also be a drawing of the plot.
Confirmation from the Tax Department (Finanças) confirming that all the rates bills (IMI) are paid. This is important as any outstanding IMI tax will stay with the property and be the responsibility of the new owners.
Proof of payment of IMT.
Houses built or altered after 31 December 2003 should have a "Ficha tecnica de habitação", containing information about the property such as builder's details, type of materials used and suppliers, etc.
Identification documents and tax numbers of the owners and buyers.
Power of attorney and the representative's identification document and tax number (if applicable).
If the seller is a company, you will also need to provide:
Certidão Comercial, issued by the Conservatória do Registo Predial which identifies the partners as well as what powers they have in the company.
Identification documents and tax numbers of the company partners/owner.
Paying for your property
You may find it beneficial to open a Portuguese bank account to pay for the purchase of property, taxes, solicitors, etc. and utility bills, rates, etc. that you will need to pay when owing a property in Portugal.
There are a number of companies specialising in foreign currency exchange, especially for the purchase of property abroad, who often offer a much more favourable rate than banks. We work with one such company, Foreign Currency Exchange:
Exemption from IMI (Council Tax)
First-time buyers may apply for exemption from paying IMI. The request should be made, within 60 days from the signing of the escritura, at the Finanças for the area where the property is located. Exemption is only granted on main residences (not on second homes or holiday homes). The period of acquisition is counted either from the date of acquisition (for a property which is not new) or emission of the municipal license of use (for a newly-built property).
Patrimonial Value |
Exemption in years |
Up to 150,000 euros |
6 |
Up to 225,000 euros |
3 |
| 