Real Estate in Portugal
Real Estate in Portugal
Purchasing property, especially internationally, involves several steps and additional complexities, so it’s essential to be well-prepared.
Step 1: Initial Preparations
- Obtain a Portuguese Tax Identification Number (NIF): This is compulsory for anyone investing in real estate in Portugal.
- Open a Portuguese Bank Account: Payments, especially for the deed, are typically made through a Portuguese bank account.z
- Hire Legal Assistance: Navigating the legal aspects of buying property in Portugal can be complex. Legal documents and contracts are legally valid only in Portuguese. A lawyer will help protect your interests.
- Select a Reliable Real Estate Agent: Portugal lacks a Multiple Listing Service (MLS) like in the US. A knowledgeable agent can navigate the unique aspects of each property and ensure you find a good deal.
Step 2: Choosing a Location
- Set a Budget: Determine how much you are willing to spend and whether you will use personal funds or financing. Your budget will significantly influence your choice of location. Your agent can help align your preferences, location, and budget.
Research Locations: Each region and neighbourhood in Portugal has its own characteristics. Discuss your lifestyle, preferences, and investment goals with your agent. Visit different areas, explore during both day and night, and ensure you are fully informed before deciding on a specific location
Step 3: The Acquisition Process
Once you’ve chosen a property and negotiated a price with the owner, you need to handle the contract formalities. A lawyer is crucial at this stage.
- Reservation: Generally not applicable for resale properties, this refundable step helps agree on the terms of the deal and takes the property off the market for 10 to 30 days.
- Promissory Contract: This contract signifies a full agreement to purchase the property. Your lawyer will verify all documents before signing. A deposit of 20-30% is typically required. Withdrawing from the deal after this stage incurs significant penalties.
- Deed Signing: Usually occurs within 60 days of the promissory contract, provided the property is not under construction. Buyer and seller, or their legal representatives, meet with a notary to finalize the sale, where the buyer pays the remaining balance, and the seller hands over the keys.
Step 4: Covering Additional Costs
While the seller typically covers agency fees in Portugal, the buyer is responsible for several other costs:
- IMT (Property Transfer Tax): This varies based on the purchase price and the buyer’s residency status, potentially reaching up to 10% for non-residents buying additional properties.
- Stamp Duty: A fixed rate of 0.8% of the purchase price.
- Notary and Land Registration Fees: Typically range between 0.2% and 1.2% of the property value.
Note: Acquiring commercial or non-residential property may involve different procedures.
