Category: Property purchase in Portugal

Buying a property in Portugal

Buying a property in Portugal

Portugal is a top destination for expats looking to relocate, in particular for retirement. The top regions for expats are the Algarve, the Silver Coast, Lisbon and Porto. For the ones who are looking for a new life style, Portugal has so much to offer, whether that’s living close to the beach and the sea, a quiet rural retreat or a vibrant city, there are so many choices and possibilities.

Many foreigners from all over the world have already done the big move and have settled in Portugal, most of them for retirement. If you are also looking to do the “big step” and move to Portugal, you’ll need to find a home. The good news is that there are no restrictions for foreigners, and the laws in Portugal are the same for the Portuguese and the foreigners. Another positive point is the fact that the real estate sector is very well developed and that you will find excellent local professionals.

Here are a few general information’s that can be useful:

Can foreigners buy in Portugal?

  1. If you are an EU citizen, there are no requirements at all beside the fact that you will need a Portuguese fiscal number (Numero de Contribuinte). The fiscal number will be needed to open bank accounts, applying for the water and electricity connection, for rental contracts and also for the property purchase. The tax office will provide you the fiscal number within a few minutes and you only need your ID card or Passport. If you have already contracted a solicitor (lawyer) he will take care of it on your behalf.
  2. If you are a non-EU citizen and you desire to purchase a property in Portugal, you are possibly entitled to apply for the “Golden Visa” as long as you invest at least 500.000€ in one or several Portuguese estates – the total amount in this case has also to be at least 500k.

How much will I pay for a property in Portugal?

The price you pay will be influenced by the region you prefer and the location within this region. Lisbon and Algarve are without any doubt the internationally best-known locations for expats looking to settle in Portugal and are always excellent real estate investments. The prices are significantly higher than in other regions of Portugal but alternatively, you have the Silver Coast that attracts since 12 years more and more foreigners from all over the globe and which offers an excellent price / quality / location relationship, beside the fact that the average distance to the capital and its international airport is about 60 miles (90 kilometers).

Average prices in Portugal:

Detached Villas / Houses

Algarve – The average price for a detached villa or house in the coastal area is 500k up, and inland 250k up.

Lisbon / Lisbon coast – The average price for a detached villa or house in the coastal area is 500k up and within Lisbon it won’t be easy to find such type of properties.

Silver Coast – The average price for a detached villa or house in the coastal area is 250k up, and inland 150k up.

Apartments (we will base these average prices on a 2 bedroom flat)

Algarve – The average price for an apartment in the coastal area is 170k up.

Lisbon / Lisbon coast – The average price for an apartment in the coastal area is 400k up and within the historical part of Lisbon 500k up (the square meter price in these areas approaches the 4.000 to 5.000€ / m2 depending on the location).

Silver Coast – The average price for an apartment in the coastal area is 130k up.

How can I find a property in Portugal?

The best way to find a property to buy in Portugal is to look online. There are both international and local agencies, so it’s worth checking out both.

For all means, the best way to go is through a licensed real estate agency. There are thousands of them all over the country with a very high concentration in Algarve, Silver Coast, Lisbon and Porto. The estate agent fees are usually between 3% and 5% of the price of the estate and is always covered by the seller. There is no particular procedure of how to choose your real estate agency, there are always more or less professional realtors, so you must follow your instinct, but nevertheless there are 3 important points to avoid scams and pitfalls:

  • The realtor has to be licensed (valid license number AMI)
  • The realtor has to have a valid insurance
  • The realtor has to have an office (official and valid company address)

Usual buying procedures in Portugal

You will find a quick guide regarding the usual buying procedures in Portugal here!

We hope that these initial information’s were useful and PART 2 is already under preparation!

Property purchase and legal procedures in Portugal

Property purchase and legal procedures in Portugal

Purchasing a property in Portugal is our days a very secure procedure, nevertheless it is highly recommended that qualified legal advice be always sought.
The following basic information is the step-by-step explanation to help understand the legal procedures once you have decided the purchase of your home in Portugal.

One of the most important points is certainly the choice of your Portuguese real estate broker.

All the real estate agencies in Portugal must have a valid license which has to be renewed every 3 years. The license has to be visible in the office of the real estate agency, as well as the document proving the appropriate insurance cover that may be claimed if there is a dispute.
In your own interest, please always check the license number and ask for the insurance cover receipt.
So now that you have found the right Portuguese real estate broker you can enjoy your inspection visit and finally your overseas property dream will become true.

What to do now?

You negotiate the property price.
You negotiate the general conditions of the deal.

Extras which will be included or remain in the property
Eventual refurbishment, paintings or repairs of the property
Down payment at the signature of the promissory contract (usually between 10-20%)
Date of the deed, which means the timescale between the signature of the promissory contract and the final signature and payment in front of the notary
You choose your legal adviser (lawyer or solicitor)

From this moment on you have a legal representative in Portugal who will or should do on your behalf the following:

Applying for a Portuguese fiscal number
Applying for all the legal documents referring to the property of your choice
Prior to the act of the promissory contract he will check if the necessary documents are correct and if there are any type of financial problems on the property to ensure that the contract can be done according to the facts provided including the extras and other special conditions which have been agreed between buyer and seller. The promissory contract is legally binding on both sides and the law requires the seller to repay twice the deposit should he withdraw from the sale. Likewise, if the buyer fails to complete he will lose the total of his down payment.
After the signature of the promissory contract your legal representative will schedule the date for the final deed according to the wishes of all the involved parts

Prior to the final deed your lawyer will have to pay the purchase tax (IMI) on your behalf

Finally your property in Portugal becomes reality – The final deed at the notary

This act is recorded in the official books and it is at this moment that payment is normally completed to the seller. After the act is recorded the notary will issue an official photocopy of the entry which is the proof to the buyer that the act has officially taken place. Our days and with the help of the modern technologies all the registrations are done online at the notary office and are immediately available for all official purposes.
Depending on the negotiations with your legal representative, he can also apply or change on your behalf the water, electricity and phone line

Now it is time to enjoy your property in Portugal!

Property purchase costs in Portugal

Property purchase costs in Portugal

IMT: This is the tax that you have to pay if you purchase a property in Portugal. The following table is applicable since 1st of January 2018:

Purchase for PERMANENT LIVING in Portugal

Property Value                                Tax              Amount To Be Deducted
0 – € 92.407                                    0%                                    0
€ 92.407 – € 126.403                    2%                        – 1.848,14 Euros
€ 126.403 – € 172.348                  5%                        – 5.640,23 Euros
€ 172.348 – € 287.213                  7%                        – 9.087,19 Euros
€ 287.213 – € 574.323                  8%                       – 11.959,32 Euros
More than 574.323 Euros            6%                                      0

( Vacation / Rental / Investment – Secondary home )

Property Value                               Tax              Amount To Be Deducted
0 – € 92.407                                   1%                                    0
€ 92.407 – € 126.403                   2%                          – 924,07 Euros
€ 126.403 – € 172.348                 5%                        – 4.716,16 Euros
€ 172.348 – € 287.213                 7%                        – 8.163,12 Euros
€ 287.213 – € 550.836                 8%                      – 11.035,25 Euros
More than 550.836 Euros           6%                                    0

Rustic land                                    5%

Construction plots                       6,5%

CALCULATION SAMPLE based on investment for holidays, renting or just investment:

If you purchase a property in Portugal with the value of 200K Euro the basic tax is of 7% – but the tax office will deduct 8.163,12 Euros of the amount – you will pay for this property 5.836,88 Euros purchase tax (IMT) .

The following costs are to be considered on top of the IMT (unique purchase tax):

1) Notary: Between 400 – 600 Euros
2) Stamp Tax: 0,8% calculated on the amount of the final property transaction value
3) Registrations: About 250 Euros
4) Solicitor / Lawyer: Between 1.000 Euros – 5.000 Euros + 23% VAT (depending on the solicitor / lawyer and the price of the property).

Thank you for your support!

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