Use only a government licensed estate agent with a valid AMI number.
Take your time and don’t rush into making such an important decision as buying your home in Portugal. Serious agents will never try to push you.
Appoint a reputable solicitor or lawyer (advogado), who also speaks your language, so that all the necessary searches and legal requirements are met. A solicitor is still essential despite the fact that Portuguese law protects both buyer and seller. If you give a notarized power of attorney to your solicitor, he or she will be able to deal with all the other following legal steps on your behalf. VerdeLand can recommend a few reputable solicitors. Their fees vary between 0.75% and 1.5 % (plus IVA/VAT/MwSt.) of the property value.
Instruct a surveyor to look at the property. While not compulsory in Portugal we recommend that you have a survey. A professional surveyor, normally a civil engineer (engenheiro civil) will be able to highlight any potential problems with the property itself, or tell you about any new roads or planned developments in the area. Arrange your mortgage, or alternative finance, if not in place. We recommend talking to at least two local banks, which will normally offer to finance up to 70%, subject to valuation and sufficient income. We recommend to use Barclays Bank, BPI, Santander Totta or UCI. The interest rates in Portugal are variable and depend on the EURIBOR-rates in the Euro zone. (Local banks finance property purchases in Euro, not in Sterling.)
Sign a promissory contract of buying and selling (Contrato Promessa de Compra e Venda). It is not essential to have this legally binding contract signed in front of a notary. It also does not have to be registered in the land registry office but a provisional registration is recommended if completion (Escritura do Contrato de Compra e Venda) is not scheduled within a short period of time after signing the promissory contract.
Pay a deposit to secure the property. Depending on the terms of your promissory contract and the type of property you are buying, this will vary between 10% and 30% of the purchase price. Before you hand over your deposit you should be certain that this is the property for you, because if you refuse to complete the purchase you will not be able to get your deposit back and you could be sued for compensation. If the seller pulls out, you'll be entitled to twice your deposit in compensation.
Appoint a fiscal representative in Portugal. (Representante Fiscal) It is now by law that you need to have a fiscal representative in Portugal before you can apply for a Portuguese fiscal number. Some solicitors and lawyers also act as fiscal representatives. Otherwise your lawyer/solicitor or we can recommend an accountant to you who is prepared to act as fiscal representative for an annual fee. (100 – 200 EUR per year.)
Obtain your Portuguese fiscal number ('Numero Fiscal de Contribuinte') which, as a property owner in Portugal, you are required to have. It's quick and easy to get it from your Local Tax Office (Finanças). Wait for your solicitor to complete legal investigations such as checking that the owner has the authority to sell and obtaining copies of the License of Use (Licenca de Utilizacão), Property Registration Document (Certidão de Teor) from the land registry office (Conservatorio do Registo Predial) and Property Tax document (Caderneta Predial) from the tax authority (Finanças).
Pay the property transfer tax (IMT) before completion.
Arrange a date for completion (Escritura de Compra e Venda) and signing the deeds in front of the notary. This can be done by your solicitor or lawyer if he or she has notarized Power of Attorney. You will become the legal owner of the property with completion once the deeds are signed by the parties and the public or private notary.
Pay the balance of the purchase price, the stamp duty (Imposto de selo) and the notary fees.
The title will be registered at the Land Registry after lodging a copy of the deeds.
Arrange for property insurance. We recommend various reliable insurance brokers. Local banks also provide competitive property insurances.
In case of doubt always contact your solicitor or lawyer or call us at Verdeland. We are happy to help at any time, even years after you bought your property!