Search
- Home
- Less Than 50,000
- Less Than 100,000
- Less Than 150,000
- Less Than 200,000
- Less Than 250,000
- Less Than 300,000
- More Than 300,000
- Reduced Properties
- Classified Ads
Featured Listings RSS Feed
Last Modified Listings RSS Feed
- Search Listings
- Homes
- Ruin
- Renovation
- Land
- Farms
- Commercial
- Water Mills & River Properties
- Rental
- Apartments
- Registar
- Login
Main Menu
Other Information
- Buying a property
- Extra costs to expect
- Under declaring the purchase price
- Technical Record
- Lawyers, Architects, Engineers, Surveyors and Topographers
- Rebuilding yourself or employing a builder
- Energy Certificate
- Passports, residency & healthcare
- Planning & Development of Land
- An overview of Portugal
- Property mortgages
- Portugal's Tax system
- Useful Links
- Illegal Estate Agents
- News Headlines
- Info Page
- Link Exchange
Search by Location
- Oliveira do Hospital
- Tábua
- Arganil
- Seia
- Manteigas
- Castelo Branco
- Chaves
- Vila Nova Foz Côa
- Tondela
- Other locations in Central Portugal
Area Information
Under declaring the purchase price
Almost every time a buyer commits himself to buying a property, he is confronted with the request from the seller to declare the purchase price lower on the final deed than has actually been agreed.
Almost every time a buyer commits himself to buying a property, he is confronted with the request from the seller to declare the purchase price lower on the final deed than has actually been agreed.
In past years this was a normal request and nearly everyone did it as a method of avoiding paying taxes on the full profit made for the seller and on
purchase tax (IMT) for the buyer.
Many foreigners
in those years agreed to doing this, and are finding now, that when they
sell, they are having to pay the tax over the undeclared portion they
paid "under the table" when they purchased.
The sellers argument is always that the buyer will benefit by
paying less purchase tax as well as less future council taxes. This is
true, but the real motive is out of self-interest in saving on the much
higher capital gains tax, which ultimately the buyer will land up paying
should he ever resell!
If you were never
going to sell, both parties would indeed benefit, but it would remain
illegal and punishable by law, if ever discovered.
Another reason
to think twice about being tempted into doing this is that the
neighbours always have first preference to buy a property for the same
price as offered/agreed upon by an outside buyer.The seller or
his lawyer should in fact, send a registered letter to the neighbours
before completion, advising them of the deal and price and asking the
whether they wish to exert their right of preference and desire to buy.
They then have 8 days in which to reply, and if they default, it is
assumed they do not want it and one is safe.
Often however
this step is omitted, or forgotten, and the purchase completed. If this
has happened, a neighbour still has the right for up to 6 months to
stake his claim and buy it back for the declared price. It is thus
obvious, that if one has undeclared, one HAS to sell it to him for that
LOWER price. There is no come back as it was an illegal procedure, and
thus one has to accept losing the difference. It has been rumoured that on occasion this has been done as a planned and deliberate deception, so caution is advised!