Buying A Property in Portugal

Silver Holidays can help you find the ideal property and also help and guide you through the buying process.

When you start looking and making the initial contact be upfront and give as much information as possible on the type of property you’re looking for. The more information we have, the better chance we have of finding you a good match. 

 

Mortgages

When requiring a mortgage to help support your property purchase, we can also help if required and we have developed good working relations with banks that can lend to non-residents. Most Portuguese banks offer loans of up to 60-70% of the value assessed by the valuation report to non-residents. Portugal residents can borrow up to 85–90% of the value assessed by the valuation report. You will need the following documents when applying for a mortgage:

• Passport
• Portuguese Fiscal numbers
• Last Tax Return (P60/Self-Assessment)
• Work Contract
• Last 3 months pay slips
• Current Account Statements of the last 3 months
• Proof of savings (at least the capital that will be used for the purchase)

If you would like to receive more information on mortgages or have any questions on this please contact us at 

info@silverholidays.com

 

Lawyers

We strongly recommend using a local lawyer when buying your property who will check all the relevant paperwork of the property and make the actual buying contracts and guide you through the buying process. We can recommend various lawyers that we have worked with over the past years.

 

Portuguese Fiscal number:

The first thing that you need to do is obtain a Portuguese Fiscal number, given by the finance department of Portugal and a Portuguese bank account. This gives you an identity in the country and Silver Holidays can obtain this for you or we can recommend if required a lawyer to take care of these procedures.

To obtain a Portuguese fiscal number is quite easy and when the paperwork is in order (residency/ID card or passport) this normally can be done within 48 hours after the application.

 

Promissory Contract (Contrato Promessa de Compra e Venda):

The Promissory Contract is a legally binding preliminary contract between purchaser and vendor (usually prepared by the purchaser´s lawyer according to Portuguese law) explaining the full purchase details such as the price, agreed completion dates, vendor-approved inventory list and any other items that have been agreed between the 2 parties. Portuguese law penalises vendors who withdraw after the Promissory Contract has been signed and they must return double the amount deposited by the buyer. If the purchaser withdraws after the Promissory Contract has been signed, they lose their deposit. When signing this contract the purchaser will need to pay a deposit of a minimum of 10% of the total agreed purchase price and a date will be set for the deal to close and the purchase to be completed.

 

The Final Deed (Escitura)

Almost time to celebrate!

The Final Deed will always be signed in front of a Notary by both parties (or representatives) where the final balance of the purchase is paid along with associated taxes, after which the property will be considered sold. Your lawyer will do the registration of the property in the Finances and Land registry and utility bills are transferred into the purchasers name.

 

Buying and Selling Costs

 

Buying Costs: Privatley Owned

• Legal Expenses: this is normally between 1% and 2% of the purchase price, but all depends on the complexity of the transaction.
• IMT: depending on purchase price and property qualification:
  a) Rustice land - 5% of purchase price.
  b) Plots of land for construction, industrial, commercial or services properteis - 6.5% of the purchase price
  c) Habitational properties depending on purchase price - from €633.453 up to €1,102,920 this is 6%
                                                                                  - above €1,102,920 it ill be 7.5%.
• Stamp Duty: 08.% of the purchase price.
• Notary & Registration Fees around €2,000 -€2,500.

Buying Costs: Corporate Owned

• Legal Expenses: same as above
• IMT: not applicable for non-resident companies and for Portuguese resident companies this depends on the structure of the shareholders.
• Stamp Duty: not applicable for non-resident companies.
• Notary & Registration Fees - not applicabale.
• Costs with the transfer of shares: depending on the admin structure of the company.

 

KNOW YOUR CUSTOMER (KYC)

This pracitce has become standard procedure and is therefore essential to understand and comply with it accordingly. It safeguards financial institutions against various risks, including fraud, corruption, money laundering and terrorist financing usually required to be completed when engaging with either property agents, lawyers or banks during a property transaction to ascertain how the funds for property purchase were acquired and whether you, close relatives or other beneficial owners ahve any political exposure. This procedure involves several steps:

• Verifying customer identity
• Understanding the nature of their activities
• Confirming the legitimacy of the funds´source