Purchasing Process
Buying property is a large investment and as such should be done carefully. Besides being a financial concern, it can also be an emotional experience. You should always use the services of a professional real estate agency that is properly licensed and accredited by the Portuguese government.
The real estate license is allocated in managed by IMPIC The Institute of Construction and Real Estate is the regulatory body of the construction and real estate sector. It is responsible for assining the mandatory titles of regulated activities and it's function is to enhance and regularize the respective markets, through an inspection and inspection action.
Local Properties licence number is AMI 17839.
Have you found the house of your dreams? Your new holiday home? Or maybe a new property for investment? We will walk you through this process, and provide you with all the necessary information to be taken into account, including associated costs, and documents necessary for the purchase.
Obtaining a fiscal number (NIF)
In order to purchase a property in Portugal it is necessary to register with the tax authorities and to obtain a tax ID number (NIF). The fiscal tax number is intended exclusively for the processing of fiscal and customs information, and may be requested by any citizen, resident or not, at any time. You can obtain your NIF at any service desk of the Finance Office, or at one of many of the citizens stores that provide this service.
Legal Documentation
Before purchasing your new property, it is necessary to research all legal documentation relating to the property, as well as the legitimacy of the seller. Here are the documents to be taken into account:
Caderneta Predial (tax/financial registration)- this document is issued by the finanças (tax/finance department) and contains the following data: the article, the identification and location of the property, the areas of the property, the confrontations, the tax asset value (for tax purposes) and the owner(s) of the property.
Certidão de Teor ( property registration certificate) - this document is issued by the Land Registry Office and contains the name of the owner(s), the history of the property, information about the location and composition of the property and whether there are any charges, mortgages, usufructs, penhoras, etc.
Licença de Habitação ou Construção ( Habitation or Construction License) - this document is issued by the City Council where the property is located. The habitability permit, verifies that the property was built according to approved plans, and is deemed to be habitable as required by law. For structures built prior to 1951, this document is not mandatory, however the certification from the City Council is required.
Certificado Energético ( energy certificate ) - this document is issued by the ADENE ( national energy agency) which evaluates the energy efficiency of a property and is valid for a period 10 years. It is mandatory since January 1, 2009, according to decree- law number 78/2006.
Ficha Técnica (housing technical data sheet)- this document describes the main technical and functional characteristics of the property. It is provided by the Builder and contains details of the Builder, technicians, materials used in construction, suppliers, etc. It is mandatory for buildings that have under gone reconstruction, expansion or alteration work after March 30 2004.
Property plans - this document is issued by the City Council. When buying a property, a copy should be provided to verify that the property complies with current plans.
Declaration of non debt to a condominium - if you are purchasing a property that is contained in a building under horizontal ownership, you can request is document from the owner, to ensure that there are no debts to the condominium.
Contrato de promessa de compra e venda (promissory contract)
After verification of all legal documentation of the property, and legitimacy of the seller, you will be prepared for signing a promissory contract. The CPCV is a legally binding document for both parties, (buyer and seller) that regulates and safeguards the rights and duties of each party . It should contain the following information:
- identification of the parties (buyer and seller)
- clear identification of the property
- indication whether any charges are on the property
- purchase and sale price, and payment method
- assurance at the property will be transferred free of any burdens or charges maximum period for the conclusion of the definitive contract
- standard penalty clause in the event that either party fails to comply with the contract
- if applicable, and inventory list may also be attached
Cost and taxes before and after purchase
Notarial Costs: these may vary from notary to notary.They must be paid by the prospective purchaser,immediately after the conclusion of the Definitive contract of purchase and sale.
IMT (Tax on onerous transfers on real estate) this tax must be paid in the Finance Department and is calculated by taking into account several factors, namely:
- the location of the property (Portugal or autonomous regions)
- if the property is intended for primary housing, or secondary housing
- affection (if it is a property for housing, commerce, etc)
Note: the calculation of this tax is levied on the greater of two values: acquisition value or tax asset value, and must be settled and paid by the prospective buyer before the conclusion of the definitive contract of purchase and sale. In the Finance Portal, here you can find the IMT table with the information needed to calculate the IMT, or you can use this simulater, see here
IS (Stamp Duty): this tax is levied on all contracts and must be paid by the prospective buyer before the conclusion of purchase and sale. In the process of acquiring a property, a rate of 0,8% will be applied on the n the greater of two values: acquisition value or tax asset value.
IMI (Municipal Property Tax): This tax is levied on the taxable value of buildings (rural, urban or mixed) located in Portugal, and whose revenue accrues to the respective municipalities. According to the legislation, the IMI is due by whoever the owner of a building, on 31 December of the year to which it relates. The following rates apply: between 0.8% for rustic buildings and between 0.3% and 0.5% for urban buildings.
The Final Deed
A notary will usually supervise the entire process of buying and selling a property, verifying that documentation is in order, etc. There are other services, including the "Casa Pronta" where you can now make the purchase and sale without using a notary.
In addition to the "Legal Documentation ", the following documents are required for the deed:
Seller:
- civil and tax identification documents
- banking distrate (if there is a registered mortgage)
- declaration of the exercise of the right of preference(if applicable)
Buyer:
- civil and tax identification documents
- proof of payment of IMT
- proof of payment of the IS
- bank draft with the remaining balance
