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BUYING YOUR HOME |  |
 Property In Portugal |
Living Your Dream |
Contact Us |
Buying Your Home |
Top Tip! |
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(1) Let "Property In Portugal" and their local specialists guide you through the maze and do everything for you OR (2) Read up on the information following and then let "Property In Portugal" work with you, guide you through and do everything for you! INTRO - SEARCHES - FISCAL NUMBER - TAX DOCUMENT - USAGE LICENCE - CHECKS - CONTRACT - PURCHASE TAX NOTARIES - PROPERTY TAXES - FINAL DEED - REGISTRATION - COMPLETION INTRO : The process is relatively straightforward provided you are advised and represented only by competent and reputable specialists who are fluent in a language you understand. Deal with an Estate Agent who is Government Licensed (Mediador Autorizado), who has an AMI Number and whose conduct is subject to enforceable rules. Deal only with Lawyers and Solicitors (Advogados or Solicitadores) who are fully qualified and whose conduct the Portuguese Law Society controls. Never use a Lawyer who is acting for the seller or a Lawyer who shares the same office as the seller's Lawyer. You can give your Lawyer or anyone else specific powers of attorney to sign documents on your behalf, but closely follow that the proper steps are being taken and without any undue delay. Lawyer fees are generally between 1.5 and 2% of the purchase price of the property. Deal with a local Chartered Surveyor who can ensure the Purchaser can understand the nature of the property he/she is purchasing and can highlight any likely liability for future repairs. SEARCHES : Having chosen a property, have your representative search the local Land Registry (Conservatora do Registo Predial) to check that the seller (vendedor) has clear title of ownership, that no one else has rights, charges or mortgages over it. Also check that what is registered conforms to what is actually built as well the area of the land. FISCAL NUMBER : Your Lawyer will apply for a fiscal number (numero de contribuinte) at the local Tax (Financas) office as you must have one to purchase a property. It will come in the form of a card which you will need for payment of annual property taxes or to open a Portuguese Bank Account. TAX DOCUMENT : Obtain the official tax document (caderneta predial) relating to the property from the seller and check that the description of the property (number of rooms, area of house, area of land etc.) is the same as in the land registry. USAGE LICENCE : Obtain a copy of the usage licence (licenca de utilizacao) from the local Town Hall (Camara Municipal). For residential property you will need a Habitation Licence (Licenca de Habitacao) which confirms the Town Hall has inspected the property and that it complies with the planning permission and building regulations. Non-residential licences need to stipulate the appropriate commercial or industrial use. CHECKS : Other checks and enquiries which are strongly recommended and should be carried out are : Ask your Lawyer or Chartered Surveyor to examine the local development plan to ensure that there are no infra-structural developments planned for the area. Ask a Chartered Surveyor to fully survey the property. If buying in a development check the regulations governing the development as well as any obligatory condominium charges. This does all add to the expense but it cannot be stressed enough that in making these enquiries you will fully understand all the obligations you are taking on in making this investment. This is not your home country and things must be checked carefully; provided this is done you will have no future problems. CONTRACT : Have a Promissory Contract of purchase and sale drawn up (Contracto de Promessa de compra e venda) to be signed by you and the seller. It should include : *Identification of the parties. *Identification of the property. *Agreed terms and conditions of the contract. You will normally have to pay the seller a deposit of 10% of the full purchase price at this stage. The contract can be signed in front of a Notary. It is legally binding on both the buyer and the seller. If the buyer defaults he/she forfeits the deposit. If the seller defaults he must pay the buyer double the deposit (or if a clause of specific execution is included, the vendor cannot withdraw and the purchaser can legally enforce the vendor to sell to him/her). PURCHASE TAX : IMT, Portuguese Purchase Tax will need to be paid prior to completion. The amount payable varies with the value of the property and your lawyer will advise you of this figure before you incur any expenditure. At time of writing (January 2004) tax exemption applies to purchases below Euros 80,000 and a maximum of 6% applies to purchases above Euros 500,000. Between these amounts there is a sliding scale from 0 to 6%. These figures only apply to residential villas or apartments. Different percentages are applicable on land or non-residential property and in those cases it is a fixed percentage which does not vary with the price. Rustic land is 5% and other non-residential purposes and urban land is 6.5%. A very important exception has been introduced in that whenever the purchasing entity is an Offshore territory resident or company, the tax percentage will always be 15% regardless of purchase price or nature of the property. NOTARIES : Must be paid on completion and as a rule fee will be circa 2% of the value of the transaction. PROPERTY TAXES : Unpaid property taxes (IMI) attract fines but may be allowed to mount up for some time without action; so ask the seller to show proof of payment for the last five years. Any outstanding property taxes should be settled before you make the final payment (your lawyer should deal with this). FINAL DEED : Proper title to the property comes with the final deed of conveyance (escritura) which is signed in the office of a public notary. All the relevant documents have to be checked before the final contract is read aloud and, unless the buyer understands Portuguese, interpreted in the buyers language. REGISTRATION : Finally, register the property in the name of the new owner at the local land registry. Do so without delay. Registration itself can take several months but it is effective from the day it was applied for (your lawyer should do this). COMPLETION : If the registered owner of the property changes in the transaction, new contracts will have to be entered into with the utilities companies for electricity, water, telephones etc. These involve personal attendance at the relevant providor's offices and are invariably extremely time consuming. Your lawyer can attend to these transfers for you. |
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