Appoint a local Solicitor
The solicitor will work on your behalf to check the legal status of the property and represent you for the purchase if you cannot attend yourself. To do this, the solicitor will need a power of attorney to be able to act on your behalf. You are free in your choice but we can also introduce you to our own solicitor.
The solicitor will analyze the following documents, which are required for all property transactions in Portugal: official tax documents – ensuring there are no outstanding taxes due on the property habitation license – ensuring the property meets all legal requirements for habitation, land registry document – ensuring the owner has the rightful power to sell, and that there are no charges registered against the property.
Your solicitor requests a fiscal number on your behalf from the Tax Office.
Promissory contract (Contrato de Promessa de Compra e Venda)
This is a binding agreement between the purchaser and the vendor, which will be drawn up by your solicitor. The document will outlining the negociated terms of sale, including price, payment schedules, completion date and any special terms agreed by both parties. The agreed deposit amount is paid to the vendor or even better; deposited at the solicitor, with the signing of this contract. If the ‘sellers’ for some reason draw back during or at the time of signing the final contract; the seller ows the buyer the double amount of the deposit. If the ‘buyer’ draws back or cannot get the money together at the final signing date, he or she looses the whole deposit.
Deed & Registration – (Escritura Pública de Compra e Venda)
Your solicitor will also arrange for the final deeds to be signed at the notary’s office The balance of the purchase price is paid and the notary enters the transaction in the official records. All keys and property documents are handed over from the vendor at this time – and the property is officially yours. Your solicitor will then present a copy of the deeds to the tax office and land registry department, to register you as the new owner.
The period of time between the promissory contract and the signature of the final deeds can vary, but in general it is between 30 and 60 days.
Purchase costs will run approximately 8-8.5% of the purchase price, and include: Notary, stamp duty & land registry fees are the responsibility of the buyer and will cost around 2% of the purchase price.
Property Transfer Tax – called IMT (Imposto Municipal sobre Transmissões Onerosas de Imóveis) must be paid prior to the deed and will run up to a maximum of 6.5% of the purchase price.
Note: Portugal is one of the most inheritance tax friendly environments in Europe. Along with reductions in Capital Gains Tax and Corporation Tax, the abolition of Inheritance and Donation Tax ensures that immediate family members will not be liable to pay any death duties on inheritance of a property owned in Portugal
Mediation fees. Last but not least; we from PortugalPropertyScout, charge you
More info on the buying of property you can read here