Real Estate Agents
Survey
Financial Services
Deposit
Promissory Contract
Breach of Contract
Final Deed
Documents
Registration of Property
Taxes
Useful definitions of authorities and professionals
 
Real Estate Agents
Now you have decided that you are going to purchase a property in Portugal, whether for rental, investment, holiday or permanent living... you have made the first and biggest step!

Your initial priority is to select the services of a licensed, reliable and professional Real Estate Agent who will assist you in your search by qualifying and finely tuning your requirements, providing you with suitable properties to view - do not be afraid to ask for references from previous clients who have bought or sold through the agency.

Quintalake offers you a complete service with enviable local knowledge and a base of established and trustworthy associates to help you through the house buying procedure and more, as smoothly as possible.


Survey
Once decided on your chosen property we recommend that you seek the services of a registered and qualified surveyor. This will reassure you of your choice, bring up any issues that should be addressed immediately and if necessary additional guarantees that should be inserted into contracts. A survey, as back at home, gives you peace of mind.

Financial Services
Arrange your mortgage or alternative finance, if this is not in place we can help with this! You will need to obtain 'Numero Fiscal de Contribuinte' As a property owner in Portugal, you are required to have this. This is quick and easy to get from your Local Tax Office. Quintalake can tell you where that is and what you'll need. Alternatively, you'll be assigned one automatically when you open a local bank account. Quintalake are now pleased to extend there Client Services with the addition of a comprehensive financial services and advice offering Mortgages, Insurance and Foreign Currency Exchange. Through International & Commercial Companies  including; Baydon Hill, Global Currency Exchange and Lloyd & Whyte, Quintalake are able to provide professional solutions efficiently and tailor-made to individual needs. Generally, mortgages can be available up to 80% of purchase price or valuation. Interest rates may also be variable. For further and more specific information please contact us on 00351289561576 or email us at; info@quintalake.com. You will then need to appoint a reputable English-speaking solicitor to start conducting all the necessary searches and make sure all the legal requirements are met. Portuguese property laws safeguard both the buyer and seller, but a solicitor is still essential. Quintalake can recommend a reputable solicitor in the area in which you are buying.            

 

Deposit
Prior to paying the actual deposit, Quintalake can negotiate a reservation contract  where a sum usally €5,000 is paid for the property to be taken off the market while your lawyer checks the proposed contract and makes enquiries. You will be required to sign a Letter of Intent which shows your commitment to buy the property. Depending on the terms of your preliminary contract and the type of property you are buying, the deposit will be between 10% and 30% of the purchase price.


Promissory Contract
Or 'Contrato Promessa de Compra e Venda'. This is done by both the buyer and seller and will include all the conditions of sale and reference to the necessary documents needed to complete the sale. This is only valid if signed by both parties in front of the Notary. If you are unable to attend your lawyer will arrange a Power of Attorney so he can sign on your behalf. The deposit is released upon signature of the Promissory. In individual circumstances and with most new build a separate payment structure will be advised and agreed.


Breach of Contract
If the Promissory is in breach of contract as the seller no longer wishes to sell you have two options:
1. Demand compensation amounting to twice the deposit paid, or
2. Force the sale seeking on order of 'specific performance' of the contract. This does take time and money and a lot of patience.
If you decide not to proceed then you lose your deposit to the vendor, who can also try and force you to buy based on the above point 2.


Final Deed

Arrange a date for completion, Escritura de Compra e Venda to be signed in the presence of a Notary This is agreed between you and the vendor and can be signed on your behalf by your solicitor if they have Power of Attorney. The balance of the purchase price, transfer tax and notary fees (excluding transfer tax which is paid before). This is  done at the same time as completion. As a benchmark allow between 7 – 10% of the purchase price to cover all your fees involved in the process of the house buying procedure. 

Documents
At this time your appointed lawyer should have the following documents: At this time your appointed lawyer should have the following:

• Certificate of Land Registration
• Certificate of Habitation
• Caderneta Predial - tax registration
• Receipt from the Tax Department confirming payment of IMT (Property Transfer Tax)

Most lawyers will help with the connection or re-connection of services; gas, electric etc. This should be agreed during initial meetings.

Registration of Property
The property title will then need to be registered in your name/s when it becomes yours legally. Your lawyer should lodge a copy of the registration document (Registo) at the Land Office and the Local tax office as soon as possible.


Taxes
There are two main taxes in Portugal

Transfer Tax ( IMT-  IMPOSTO MUNICIPAL sobre TRANSMISSOES)This tax must be paid before the Final Deed and a document must be issued by the Local Tax Office which proves that it has been paid and this must be presented at the Notary on the signing of the Deed. The tax payable depends of the price the property. This is equivalent to our stamp duty. The rate for this tax, which applies to a normal overseas buyer, is on a sliding scale with a maximum of 6%. It used to be tax beneficial to purchase the property through an overseas company but loopholes both in the UK tax system and in Portugal have made this less attractive. If a property is bought through an offshore company, which is on the Portuguese “blacklist”, the IMT levied is 15%. Acquisition by a non- blacklisted company (UK, Delaware, Malta etc) would not be affected. Rustic property will be charged at a flat rate of 5% and commercial property or land for construction will be charged at a flat rate of 6.5%.

Property Tax - (IMI).
General rates are payable annually and are assessed by the local authority (rather like council tax in the UK). As a guideline your annual property tax may be levied at up to 0.72% of the market value, which is assessed based on five components:

For those considering purchasing through an overseas company, bear in mind this is 5% per annum. These are paid annually and charged via your local council. The tax is between 0.4% - 0.8% for urban properties which is then charged on the rateable value of the property as assessed by your Tax Department.


Useful definitions of authorities and professionals
Lawyers (Advogados) - Minimum of 5 years at University with an 18-month period of practical training with a senior lawyer. Your lawyer will perform the same duties as a solicitor or barrister and will be a member of equivalent to the law society (Ordem dos Advogados). We are happy to recommend well respected, bilingual lawyers should you so wish.
Notary (Notário) - Also graduated in law, but with further training in Notary, Civil, Land and Company Registration offices. The Notary prepares all types of deeds from purchase and sale, donations and gifts, mortgages, wills and loans. He / She also verify signatures on various legal documents. The notary also verifies the legality of documents and must ensure that the administrative and tax laws are carried out.
Land Registrar (Conservador do Registo Predial) - Same qualifications as above. They govern the departments where the land registry and similarly related business takes place.
Tax Department (Repartição de Finanças) - Public department where taxes are paid.
Town Hall (Câmara Municipal) - This body is responsible for the district. All projects for approval of construction for all buildings, supply of all basic services, construction of roads, collection of garbage, issue of licenses etc. The head of this body is the president who is the leader of the political party in power.

This information is provided without prejudice and in good faith. 01/07/07