Buying a new Portugal property is quite a challenging task. The language, purchase laws, procedures for the purchase and the legal processes involved are different. A professional help from a local property agency and solicitor can be helpful to smoothen the actual purchase.
Before engaging a lawyer, selection of the property should be made. Following tips should be kept in mind while selecting a property:
Requirement from property: If the property is purchased to spend life post-retirement, it is advisable to be in close proximity to shopping centers, hospitals and a bank. If the property is planned as a holiday home then the requirement changes accordingly.
Location: While selecting a property due care must be taken about the selection of location. Properties close to rivers, lakes may be visited in spring or summer, seasons when Portugal experience heavy rainfall. The water levels tend to rise alarmingly, giving you a clear approximation of safety levels of the location of the property you intend to buy. Similarly, a property should be visited at different times of day before final selection.
After a buyer selects a Portugal property, the process of purchase begins. Following tips should be kept in mind during process of purchasing a property in Portugal:
Tax or Fiscal Number: This may be obtained from the nearest tax office by producing a proof of identity and an address in Portugal. The identity proof may be a residency card; a valid passport and the address may be of a friend or a solicitor where the fiscal card would be sent.
Portuguese Bank Account: This is required to pay the bills locally, arising during the purchase process and transfer of large sums of money from an existing home account. A valid passport, birth certificate, fiscal number and present address proof are required to open a bank account in Portugal.
Contract of Purchase: This is known as Promissory Contract in Portugal. By this mutually agreed contract, the seller of a property agrees to sell a certain property at an agreed price within a fixed time limit. The buyer agrees to it and deposits a certain sum of money (generally 10% of the agreed price) to the seller. If the purchaser fails to honor the contract within the stipulated time the deposit is lost. If the seller fails he pays twice the deposit money.
Purchase Tax: Before completion of the sale, purchase taxes must be paid. This is called Imposto Municipal Tax (IMT) in Portugal. There are different rates for rural and urban property, agricultural land and shops. The Maximum cap is 6.5% of the agreed price.
Completion of Sale: At an agreed date the buyer and seller meet at the office of the Notary to sign the ‘Deed of Purchase and Sell’. The balance of purchase price is paid at this time. An official copy of the completion of sale (Escritura Publica de Compa de Venda) is taken to the land registry office (Conservatoria do Registo Predial) to register the property in the name of the buying party.
While the buyer may select the Portugal property and its location, the process of purchase should be left to an expert solicitor. Solicitors in Portugal usually charge a fee of about 1.25-1.75% of the price. Service charge of a Portugal property is payable on a monthly basis and so are most utility bills like electric, telephone and house insurance.
Herve Maury shares expert tips on buying property in Portugal. Check out
Portugal property.
