Buying a Property in Portugal

Tax Number / Fiscal Number (Numero Fiscal de Contribuinte)

In order to purchase property in Portugal you will need a fiscal number which is obtainable from the nearest tax office (Ministerio de Finanças)
You will need a proof of identity (your residency card, identity card or passport) and an address in Portugal so that the tax office can send your fiscal card (Cartão de Contribuinte). If you do not have a Portuguese address you can use that of a solicitor or a friend. When you move into your property, remember to change your details to the new address!

Bank Account

It is advisable to open a Portuguese bank account, so that any bills that arise during the buying process can be paid locally. You will need your passport, birth certificate,and some proof of address in the U.K. (such as utility bills). Transfer of large amounts of money can then be sent from your U.K account to your Portuguese one.

Promissory Contract (Promessa de Compra e Venda)

When you have chosen a property and have agreed a price, you will sign a Promissory contract (Promessa de Compra e Venda) with the owner. This states that you promise to buy the property, and the owner promises to sell it to you, at an agreed price and within an agreed timescale.

You then pay a deposit (normally 10% of the purchase price) and agree on a date to complete the purchase. If you withdraw from the purchase you will lose your deposit, and if the owner fails to keep their side of the bargain, they must repay you twice the amount of your deposit. It is highly recommended that you employ a Portuguese solicitor to handle the contract.

Property Purchase Tax

Imposto Municipal Sobre Transmissão Onerosa de Imóveis (IMT)

You must pay any purchase tax (IMT) before you complete the sale and proof of payment must be shown to the notary.

There are 2 different scales for IMT, one applies to permanent residences and one for second homes, see below:

IMT for land only (prédio rustico) is 5%.
IMT for construction & urban properties not for habitation (eg Armazens) is 6.5%.
For mixed land (predios mistos) the rustic part attracts the flat rate of 5%, with the urban part rated either as the chart below or 6.5%.

IMT on other properties is on a sliding scale based on the value of the property:

For example, a 100,000 euro house, permanent residence is 100,000 by 2%= 2,000 minus 1,848.13 = 151.87 euros

Permanent Residence
Purchase Price (euros)	% of Purchase Price	Adjustment (reduce by euros)
Up to €92,407	0	0
€92,407 – €126,403	2%	€1, 848.14
€126,403 – €172,348	5%	€5, 640.23
€172,348 – €287,213	7%	€9, 087.19
€287,213 – €574,323	8%	€11, 959.32
over €574,323	single flat rate of 6%	-

Non Permanent Occupation
Purchase Price (euros)	% of Purchase Price	Adjustment (reduce by euros)
Up to €92,407	1%	0
€92,407 – €126,403	2%	€924.07
€126,403 – €172,348	5%	€4, 716.16
€172,348 – €287,213	7%	€8, 163.12
€287,213 – €550, 836	8%	€11, 035.25
over €550, 836	single flat rate of 6%	-

Correct as of Jan 2012.

Completion of Sale (Escritura Publica de Compra e Venda)

All of the parties must agree a date to complete, and make an appointment with the Notary. Everyone involved in the purchase/sale must attend at the Notary's office, (unless you have granted your solicitor power of attorney to act on your behalf). You must have a translator present so that you understand what the notary reads to you. Your solicitor must ensure that all the relevant documents are present. You and the sellers will be read the Deed of Purchase and Sale which everyone will sign. At this point you must pay the balance of the purchase price.
The property is now yours, but you must still take an official copy of the escritura to the land registry (Conservatária do Registo Predial) to have the property registered in your name.

If your property is worth less than €125, 000 you are be able to apply to claim exemption of the local council tax (IMI) for up to the first 3 years. Exemption applies to individuals with a taxable income, in the year prior to the purchase, lower than €153,300. The deadline for submitting applications for IMI exemptions is 60 days after the purchase date.

As part of the buying process you will fill out a form (the 'Modelo 1 IMI') which is a statement about the conditions of the property. The council also make an evaluation of the property, by doing a survey or looking up the books. 'Urbano' property is always assessed by a survey, or so they say.

The calculation of IMI is rather complicated. As a guide you can use this table:

Type of Property
Rate
'Urbano' assessed under the former legislation 'Contribuição Autárquica'
0.5% to 0.8%
'Urbano' assessed under the IMI code
0.3% to 0.5%
'Rustico'
0.8%
Property owned by residents of tax havens
7.5%

(correct as of January 2012)

Note - All of the above information is for use as a guide only. Check all details with your solicitor.

A Guide to Buying a Property in Portugal

Buying a place in Portugal should be easy yet far too many people have fallen foul of the hidden dangers that can bring your property dreams crashing down around you.

In this straightforward guide Gabrielle Collison shares her tips on how to minimise the risks and enjoy a trouble free purchase.

Written in plain English, with none of the hype, this guide contains:

* how to find reputable Portuguese real estate agents
* case studies from home buyers in Portugal like you
* how to get good legal advice for your Portuguese property purchase
* off-plan vs new-build vs resale vs self-build
* how to carry out your own checks on properties in Portugal
* step-by-step Portugal house buying flow charts
* tips for renting a property in Portugal
* advice on selling your Portuguese property
* how to decide where in Portugal to buy your home
* advice on relocating to Portugal and becoming a Portuguese resident
* and much, much more....

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