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The acquisition of a real estate asset in Portugal by a foreign citizen is a simple and fast process.
Contact an independent professional and specialist in Real Estate Law
1
It is advisable that you secure expert advice and monitoring during the buying process.
Register at the Tax Office to be assigned a tax identification number
2
You can apply for the NIF as a resident or non-resident. As a resident, you should present an Identification document or passport and residence permit title. You are exempt from the latter if you are an EU citizen, being sufficient the presentation of the Certificate of Registration of EU Citizen issued by the Municipal Council of the area of residence. As a non-resident, and in case you declare residence in a third country, you must appoint a fiscal representative with fiscal domicile in Portugal
Make an audit to the property
3
The purchase and sale of a property requires the verification of the documentation relating to it, to be obtained from the Land Registry Office, the Tax Office and the City Hall.
Sign a promissory contract of sale
4
Before signing a contract of sale, an agreement is made between the seller and the buyer, which sets out the terms and conditions of the purchase and sale and the commitment to conclude the deal in the future, and provides a share of the purchase price.
Make the provisional registration of the purchase
5
Prior to the conclusion of the purchase and sale contract, a provisional registration of the acquisition must be made in favour of the buyer at the Land Registry Office, in order to safeguard his position as future owner of the property before third parties.
Pay the IMT
6
When buying a property, and in case you are not exempt, you only have to pay the municipal tax on the transfer, which is levied on the value that appears in the contract or on the patrimonial tributary value if this is higher. The amount of IMT is determined by applying annually altered rates, which vary according to location (Mainland or Autonomous Regions) and the purpose of the property. The payment is made at the Finance Department or through the Finance portal.
Sign the contract of sale
7
The definitive contract of sale is signed by the parties before a notary, lawyer or solicitor. Stamp Duty is paid here, which is levied on the same basis as IMT.
Register the deed at the Land Registry Office
8
After the public deed or the definitive contract is signed, the registration of the purchase must be requested at the Land Registry Office or online.
1
Contact an independent professional and specialist in Real Estate Law
It is advisable that you secure expert advice and monitoring during the buying process.
2
Register at the Tax Office to be assigned a tax identification number
You can apply for the NIF as a resident or non-resident. As a resident, you should present an Identification document or passport and residence permit title. You are exempt from the latter if you are an EU citizen, being sufficient the presentation of the Certificate of Registration of EU Citizen issued by the Municipal Council of the area of residence. As a non-resident, and in case you declare residence in a third country, you must appoint a fiscal representative with fiscal domicile in Portugal
3
Make an audit to the property
The purchase and sale of a property requires the verification of the documentation relating to it, to be obtained from the Land Registry Office, the Tax Office and the City Hall.
4
Sign a promissory contract of sale
Before signing a contract of sale, an agreement is made between the seller and the buyer, which sets out the terms and conditions of the purchase and sale and the commitment to conclude the deal in the future, and provides a share of the purchase price.
5
Make the provisional registration of the purchase
Prior to the conclusion of the purchase and sale contract, a provisional registration of the acquisition must be made in favour of the buyer at the Land Registry Office, in order to safeguard his position as future owner of the property before third parties.
6
Pay the IMT
When buying a property, and in case you are not exempt, you only have to pay the municipal tax on the transfer, which is levied on the value that appears in the contract or on the patrimonial tributary value if this is higher. The amount of IMT is determined by applying annually altered rates, which vary according to location (Mainland or Autonomous Regions) and the purpose of the property. The payment is made at the Finance Department or through the Finance portal.
7
Sign the contract of sale
The definitive contract of sale is signed by the parties before a notary, lawyer or solicitor. Stamp Duty is paid here, which is levied on the same basis as IMT.
8
Register the deed at the Land Registry Office
After the public deed or the definitive contract is signed, the registration of the purchase must be requested at the Land Registry Office or online.
Follow these recommendations before purchasing:
- Consult the land registry certificate and check all current registrations and pending registration requests on the property;
- Confirm if there is any encumbrance, charge or limitation associated with the property;
- Check if there are any debts to the State for non-payment of IMI;
- Consult the Municipal Master Plan (PDM) to know any construction impossibilities in the area;
- Check that the identity of the owner matches that of the seller;
- Confirm the registration of the property in the land register to know its tax situation and valuation data;
- Confirm that all permits have been obtained;
- Attest the inexistence of preemptive rights
Main documents for the conclusion of the deed of purchase and sale:
- Civil and tax identification documents of the intervening parties;
- Certificate of the content of the land description and the inscriptions in force issued by the Land Registry Office;
- Updated property certificate (caderneta predial) or certificate of the content of the land register;
- Proof of payment of IMT;
- Proof of payment of Stamp Duty;
- Use permit (where applicable);
- Infrastructure certificate (where applicable);
- Promissory contract of purchase and sale of the property;
- Energy and Indoor Air Quality Certificate for Buildings (issued by ADENE);
- Mortgage Extinction (where applicable).
Expenses when buying a property in Portugal
- One time instalment
- Rates to be applied (updated annually):
- Rustic properties – 5%.
- Urban Properties (except for housing) and other onerous acquisitions – 6.5%.
- Formula of calculation
IMT = Deed value or taxable patrimonial value – VPT ( whichever is higher) X Rate to be applied
- The VPT is the administrative value of the property ascertained by the Tax Authority
- The tax table includes situations of payment exemption
- Calculation Formula:
- Depends on the respective tables
- Lawyer.
- Evaluating the price of a property.
- Bank charges (in case of a mortgage).
- Real estate agent’s commission.
- Expert fees (if it is necessary to carry out an assessment of the condition of the property or plot of land).
- Translation of documents.
- Municipal Property Tax (IMI):
Annual instalment. The rate to be applied is defined by each municipality.
Calculation formula:
IMI – Taxable Asset Value X Applicable rate.
The Tributary Patrimonial Value is that which appears in the land register.
Fees to apply :
- Rural buildings – 0.8%:
- Urban buildings – 0.3% to 0.45%.
- Property management
- Insurance.
- Electricity/water/gas/Internet/phone.
