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Buying property in Central Portugal

Buying property in Central Portugal should be a fairly painless experience once you have found the property that you would like to purchase. All that needs to be done is to follow some basic rules and guide lines.

1) You will need to apply for a Fiscal Number (Numero Fiscal de Identificação or NIF this card is also known as a numero de contribuinte) is quite and easy process and has a modest fee that needs to be paid. In order to get your fiscal card you will need to go to the local tax office (Ministério de Finanças) with your passport. Normally you will find an English speaking assistant who will help you. You will also need an address in Portugal, you can use a friend’s address or your solicitors / lawyers address. Your fiscal card is just like your National Insurance in the UK. Without a fiscal card you will not be able to purchase a property. After you have completed the purchase of your property you will need to change your fiscal card’s address into your new address in Portugal.

2) The next step to take is to open a bank account, this is a must! Virtually every bank will have an English speaking employee who will assist you in opening an account with them. Some Portuguese banks have branches in UK and can finance you with a mortgage if necessary. Some banks do require a minimum deposit of between 100 and 200 euros. You will also be asked to produce your passports, fiscal cards and possibly a utility bill as proof of the address you have provided. Some banks also have online banking which is a bonus if you want to transfer money into your account in Portugal.

3) Now that you have found your dream property you will need to find a lawyer preferably an English speaking lawyer to help you with the purchase and look after your interests. Having a lawyer insures that you are in safe hands and he / she will be able to check all the relevant paperwork on the property to make sure that everything is correct for the completion. The lawyer can check for unpaid property taxes, outstanding charges, that there are no rights on the property etc.
You can either :-
a) Sign a promissory note (Promessa de Compra e Venda) where you will need to pay a 10% deposit (sinal) to secure the sale. This is a legal binding contract that commits both you the buyer and the vendor to complete the transaction. In the promissory note the price and date of completion for the deed are agreed by both parties. This clause should be written in the contract under the correct act n.º of the decree law. You should ask your lawyer if this clause is in the contract that you will be signing. You will then need to make arrangements so that the rest of the money is in place for the final deed (escritura publica). If you should withdraw from the purchase then you will lose your deposit. However, if the vendor withdraws for any reason then vendor will have to pay you twice your deposit.

b) You can do the final deed (escritura publica) without having signed the promissory note. The signing of the deed (escritura publica) is quite a formal ritual. The notary’s clerk will ask for your and the vendors passports or identity cards to be sure the right people are present. He/she will then read out loud the contents of the deed. Some clerks will translate the deed to you in English, you can also take a translator or your lawyer to do the translation for you. Once the deed has been translated, you, the vendors, the translators and the clerk will sign the deed. You will then be asked by the clerk to hand the cheque to the vendor, the clerk here acts as a witness. You are now the new owners of the property!! You will then have to pay the notary it’s fee. Notary fees are set by the government and are based on a sliding scale according to the value of the property, so make sure that you have an extra cheque with you.
If you are not going to be in Portugal you can give your lawyer a power of attorney (procuração) to act on your behalf on the promissory note and at the deed.

4) A few days PRIOR to completing the final deed you will need to pay the IMT tax, this is a property transfer tax (Imposto Municipal sobre as Transmissões - IMT) this tax varies as it depends on the classification of the property being purchased. This applies to purchases that are being sold over € 89,700. If your property is to be your sole residence then you can apply for exemption from the tax.

5) With the deed your lawyer will now be able to register the property in your name at the local land registry (conservatória) and at the tax office (finanças). These fees are variable. A couple of months later the registration should be completed and your lawyer should provide you with these documents.

6) Now that you are a new owner of a property in Portugal you will be liable for local rates. This tax is called IMI (Imposto Municipal de Imóveis), an annual tax and is levied on the tax registration value of building, apartments, plots of land and rural land.

This is just a very brief guide to the process in purchasing property in Portugal. We cannot stress enough how important it is to seek legal advice throughout the whole purchasing process.


* Portugal Midlands does not accept liability for any changes or misrepresentation of the process for purchasing property in Portugal.