The procedure for buying a property in Portugal

STEP 1 Property selection

During the first stage the company monitors the market and a selection of property units is made according to the investor’s preferences, regarding terms and conditions and characteristics of property being sought;

STEP 2 Arranging a visit

The next step involves arranging a visit to Portugal in order to view the properties. This will include an arrival meeting and a property viewing itinerary;  

STEP 3 Drawing of a Power of Attorney 

When the investor has decided which property to by it is necessary to draw a power of attorney. Usually it is done in the presence of an accredited translator. This procedure gives the lawyer, whose name is stated in the document to act on the foreigner’s (investor’s) behalf, so the buyer doesn’t have to deal with long and complicated legal formalities and procedures.

STEP 4 Obtaining a tax number 

A tax number or (NIF –  número de identificação fiscal or) allows to open a bank account to buy the property in Portugal. 

STEP 5 Opening a personal account in a Portuguese bank

The buyer has to pay deposit of 10% of the total property price. This will secure a reservation. 

This procedure secures the buyers interests and ensues that the owner of the property will not sell it to other purchaser. If the buyer breaks the agreement, the money does not return.  

STEP 7 Preliminary sales agreement 

The preliminary contract is prepare by a notary. After signing the contract the buyer has to pay 10-30% of the item price. 

STEP 8 Municipal real estate purchase tax payment 

During this period, a lawyer gathers various documents, extracts and certificates for the Real estate item. This is required to enter into the transaction. 

• Excerpt from land register or Centidã de Teor. This document contains information about the property (location, type, modifications, etc); 
• Tax registration of the property or Caderneta Urbana/Rustica Predial or Caderneta Predial;

• Habitation license or Licença de Habitação; 
• Technical certificate of the property or Ficha Técnica de Habitaçã;
• Energy performance certificate or Certificado Energetico. 

The agreement should be signed in the presence of notary. 

After that is done, the buyer has to pay the remaining amount of the property price. 

After that the buyer should apply for a transfer of the Title of the property. Acquiring the title deed for a property in Portugal is a simple procedure of transfer of ownership from seller to buyer. 

Taxes and maintenance check list 

• Additional costs and expenses upon a purchase of a house or flat in Portugal will amount, in average, to 5% to 9%. Such costs and expenses include:
• Registration of a tax number €7.5
• Stamp duty 0.8% of the property price

• Tax on transfer of title to Real estate item (IMT) - 0% to 6% of the price, depending on the location and expensiveness of the item
• Lawyer’s service fee - 1% to 1.5%
• Document notarization ≈ €250
• A duty for property rights registration €250
• Renewal of contracts for utility services - from €100 to €200