The worldwide property boom reached the Algarve, South Portugal, a number of years ago and other areas of Portugal still have a lot to offer for house-hunters and investors. The process is simple and we have been through it all before, which will make things a lot easier.

The purchase procedure

If you like one of our properties, we can help you get in touch with reputable legal people who will then obtain a certificate (Escritura) from the local Land Registry, confirming that the property is available to sell. This document will also be produced to the Notary at the time of signing the contracts.

If you are paying the full purchase price immediately, a purchase contract will be drawn up, covering the details of the contract, purchase price and date of completion. At the time of signing the contract, you will need to pay a deposit, typically between ten and thirty percent of the sale price. If you then pull out of the sale this deposit will be forfeited, and, you’ll be reassured to hear that if I pull out I will be obliged to forfeit double the value of the deposit. Much more secure than the system in some other countries.

The conveyancing (Escritura) will check that any searches and other legal requirements have been carried out, funds prepared and we will agree a completion date. The transfer of title will then be prepared and will be signed by both of us, or by our solicitors/lawyers, in the presence of a notary. The balance of the purchase money is then be handed over. The contract will be retained by the notary and a copy registered with Public Records. Your notary will record the transaction in the Land Registry, and file the necessary tax document (Cadernata Urbana) with the Tax office. You will have to apply for a tax number if you decide to buy any property in Portugal.

Fees
This will usually be a total of about 15% of the purchase price, slightly less for countryside property. The costs include Solicitor/Notary fees, Stamp Duty and Transfer Tax (IMT) when buying real estate in Portugal. Notary and registration fees are approximately 2% of the purchase price.

Tax
Imposto (IMT) is payable when the registered owner of the property changes in Portugal. It is 5% (€ 5,114) for properties from €14,800 to €156,500 and 7% (€8,244) from € 156,500 to €260,900.

A municipal tax is levied by reference to the ratable value, from 1%. Buying a property using real estate holding companies is a popular tax efficient method of investing in a second home and we can help you find a reputable one. It can allow you to minimise property transfer taxes and avoid capital gains on sale and inheritance tax in the event of death.

Information kindly supplied by www.gekkoportugal.com
A guide to living, working and buying property in Central Portugal.

Having just read all of this do not be put off - we have been there and got the t-shirt and will always be available to help.