Buying a property in Portugal

Buying property in Portugal is a straightforward process. When you have decided on the property you wish to purchase you should obtain a Fiscal Number from Financas (the local Tax Office) and open an account with a local bank. It is also a good idea to contract a local lawyer to handle your interests, and to engage a Fiscal Representative, and you should also be clear on how you are to finance the purchase. The seller or their legal representative should obtain an Escritura (certificate) from the Conservatória do Registo Predial (the local Land Registry) confirming that the property is available to sell without encumbrances and is legal in all respects. In addition, sellers of a rural property need to provide a Caderneta Rustica, which is an accurate description of the property. These documents will need to be produced to a notary at the time of signing the contracts.

A purchase contract will be drawn up by the seller's legal representative, covering the details of the contract, purchase price and date of completion. At the time of signing the contract, you will need to pay a deposit of around 10% of the agreed price. If you subsequently withdraw from the contract the deposit will be forfeited, whilst if the seller should withdraw they will be obliged to forfeit an amount equal to twice the deposit. The transfer of title will then be prepared and will be signed by both parties or by their solicitors/lawyers, in the presence of a notary. The balance of the purchase money can then be handed over; all fees and taxes must be paid at this stage. The contract will be retained by the notary and a copy registered with Public Records. You will then have to arrange for registration of proof of ownership with the Land Registry, and the Inland Revenue should be notified for tax purposes.

Taxes and charges on Portuguese property will be up to 5% of its purchase price, and will include solicitor/notary fees, stamp duty and transfer tax (SISA). Taxes are charged on a sliding scale, dependant on the agreed price. IVA (Value Added Tax) is added to new properties at a rate of 19%, but this is typically included in the purchase price. The usual local and national annually recurring taxes and rates are applicable from the date of ownership.