Buying a property in Portugal

Step by step:

When buying a property in Portugal you have to get yourself an portugues bank account as well as a fiscal number (número de contribuinte) from the local taxoffice. Next step is to get a taxation identification of the property (caderneta predial), that sets out the rateable valuation, amongst other things. Thereafter you have to get a user license (licenca de utilizacao) from the municipality office (Camara Municipal).

For a residential property (constructed after 1951) you also need to get a habitation licence (licenza de habitacao) confirming that the property complies with planning permission and building regulations. If the property existed prior to 1951 you will need a certificate to state this. Both documents from the municipality office.

Deposit:

A promissory contract (contracto promessa de compra e venda) will be signed at the notarys office, and the purchaser and the vendor are now legally bound by this contract. A deposit (normally 10-20% of the purchase price) will be paid to the vendor. By law, in case of that the vendor redraw from complying with the contract, he/she must refund the double amount you have paid. In case of that you redraw, you loose the deposit.

Property transfer tax:

The final deeds will be signed at the notarys office and you are to pay the tax - IMT (Imposto Municipal Sobre as Tranmissões). The property transfer tax is as follows (for year 2009):

Rustic property has a flat rate of 5%. Commercial properties in Portugal, and land for construction: 6,5%. Off shore companies pay a flat rate of 8%.

Other costs:

Notarial and registration fees will be paid by you on completion. These will be appr. 1% - 2% of the purchase price. If an offshore company owns the property there will be no fees to pay.

Property tax:

The property tax is normally 0,2% to 0,5% of the assessed value of the property.

Buying a property in Portugal

When buying a property in Portugal or any other country where you are not familiar with the law etc - it's good to take advise from a lawyer (see our list of Lawyers under the heading Property services) that will help you handle the process and guide you through. Also get familiar with the office opening hours (read more About Portugal here) and dates of Public Holidays in Portugal, to be sure you don't get to closed doors. All cities in Portugal also have their own holydays to celebrate - have a look under our city-information. You can also seek more information with contacting the Embassies - both in your own home country and in Portugal.

Note that the information above is just a guideline! Be sure to have updated information about laws, taxes and fees before making an property investment.