Finance Made Easy
Finance Made Easy
Portugal Mortgage Brokers
Portugal Mortgage Brokers 

Buying Process

 

 Buying a property in Portugal is a simple business transaction. 

When you’ve settled on the property you want you’ll need to choose a qualified lawyer to represent you. We can provide a number of recommendations of renowned local lawyers from clients who have been satisfied with their work and enjoyed a trouble-free purchase.

Power of Attorney


Once you have found a lawyer that you are happy with we highly recommend that you assign them power of attorney. This allows your lawyer to apply for the necessary paper work on your behalf and will save you many costs in the long run. Many property deals have been lost on account of the buyer not being able to act quickly enough and this will stop that from happening.

Before contract


Prior to paying over any money or signing any promissory contract, the purchaser should instruct their lawyer to undertake thorough pre-contract enquiries. If money has changed hands it will be very difficult to retrieve it if the title is not subsequently in order.

A vendor should have a complete set of title deeds that show that the vendor is the person legally entitled to sell and that the property sold is the property the purchaser has agreed to buy.

The property should have a valid habitation license that is similar to planning permission and confirms that the local authority has approved the construction of the property. The purchaser’s legal representative will enquire and check the following:


• Land registration
• Ownership
• Title
• Description of property
• Mortgages / Encumbrances
• Related charges
• Third party interests

 


Caderneta Predial


Every property must have a “Caderneta Predial”. This is a taxation identification of the property that sets out, amongst other things, the rateable valuation. This valuation is important for the determination of IMI tax (rates).

Habitation Licence


All residential properties constructed after 1951 need a habitation license confirming that the local authority, the Camara Municipal, has inspected the property and that it complies with planning permission and building regulations. If the property was in existence prior to 1951 a certificate to state this must also be obtained from the Camara.

Fiscal Number (Número de contribuente)


If you are buying a property of any kind you will need a fiscal number. The process is not complicated and can be handled by your lawyer.

Survey Report


A survey report is not a legal requirement during the purchase of a property in Portugal. It is not always necessary but sometimes advisable with older properties. This will add to the general expenses but will reassure the purchaser that the property is in a good condition. A survey report is generally charged at €500.

Assuming that all of the above have been checked satisfactorily, a contract to purchase will be drawn up.

Promissory Contract


The purchaser’s legal representative will prepare a contract of purchase and sale (contracto promessa de compra e venda) to be signed by the purchaser and the vendor. This should include all relevant details of the property, the price, the payment schedules, the completion date and any special terms and conditions agreed by both parties.

At this stage the agreed deposit, normally 10% of the purchase price is paid to the vendor. The purchaser and vendor are then legally bound by the contract. There will be penalty clauses contained in this document in the event of either party withdrawing from the sale or purchase after this contract is signed.

The final deeds (Escritura)


The final deeds will be signed at the notary’s office. The balance of the purchase price is paid at this time, and the notary subsequently enters the transaction in the official records. Usually, the buyer can only take official possession after signing the final deeds of the property.

Your lawyer can sign both the promissory contract and the final deeds on your behalf, but only if they have first received your power of attorney, which is advisable to do very early on in the process to avoid you having to visit Portugal every time a signature is needed. Alternatively you can sign both documents personally.

The period of time between the promissory contract and signature of the final deeds can vary according to the wishes of the buyer and seller. This timescale is stated in the promissory contract, but usually it is 30-60 days.

Registration (Registo Predial)
After the transaction has been entered into the notaries’ records, the lawyer will take a copy of the deed and register the transaction at the land registry. This formally notes the purchaser’s legal ownership of the property.

IMT
(Imposto Municipal Sobre as Tranmissões) 
Formerly SISA Tax

Property tax


 

 

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Tel:

UK +44 203 286 0733

PT +351 289 315 574

 

E-mail:

info@portugalmortgagebrokers.com

 

 

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