Legal side of buying a property in Portugal
This Guide sets out the basic Law, a publication of this kind can only cover the most common situations and in the most general way.
This Guide is no substitute for proper professional advice, which I will be glad to provide, and then able to tell you how things covered in this guide will apply in your particular case.
Steps to buy a Property in Portugal:
1- Find a property.
2- Contact lawyer/solicitor.
Very often people purchasing property in Portugal take little or no legal advice, they may then find there is no Title of the property, that it was built without planning permission…or that it does not even exist or the property is being burdened by debts registered against it. There is no reason why this should happen to you, “Provide that you take independent legal advice”.
You should never sign anything until you have had it checked by your Lawyer. If you sign you will be committed to a contract that you may not understand, that may be totally unfair or unsafe and that could be structured, financially, in a way that is totally unsuited to you and tax inefficient.
After the lawyer carried out all the necessary checks, it will be sent to you a written report setting out the findings.
Provided the checks are satisfactory you then sign the Preliminary Contract [ drawn up to cover the purchase of any property, signed by both parties (seller/purchaser) and should include all relevant details of the property, the terms and conditions agreed, the price, the completion date, etc. ] .
A deposit is required upon signature of the contract. You'll lose this amount if you fail to complete, unless the vendor is at fault in which case you'll be entitled to twice the deposit back.
3- To buy a property in Portugal, you'll need an NIF number (Portuguese Tax Identification Number), so that the Portuguese Tax Authorities can identify you.
4- Property transfer tax (IMT Tax): this tax is payable by the purchaser before the granting of the Final Deed.
Proof of its payment is required by the Notary.
The amount due is variable, depending of the property’s price, and is based on a sliding scale.
5- Final Deed: The Deed is executed before a Private Notary, and this is prepared and drawn up based on the property’s documents.
The presence of both parties (purchaser and seller) or their legal representatives (using a power of attorney) are required to sign the deeds.
At this stage payment of the balance of the price must be made.
The deed is filed at the Notary Public and we can obtain a certified copy of the respective document.
Previous to the deed it must be verified if all expenses and taxes relating to the property are in order otherwise you could be responsible for those payments.
6- Land Registration: After obtaining a certified copy of the deed, the registration of your acquisition must be applied for in order that the property is registered into your own name.