Buying Algarve Property and Portugal Property

Buying property in Portugal

Buying a property in Portugal is a fairly straight forward process provided the necessary steps have been taken.

When considering buying a property in Portugal, it is best to have your finances in place or at least have an agreement for a mortgage in principle before you start.

Once you have found a property in Portugal you would like to buy, it is necessary to get yourself a fiscal number (like the national insurance number in the UK). Without the fiscal number you will not be able to proceed. It is very easy to obtain and can be done on your behalf by your solicitor.

Depending on the property and the vendor it may be necessary to pay a small reservation fee although this is not usually necessary. Once you have instructed your solicitor to proceed they do all the necessary checks and will draw up the promissory contract at which point you will be required to pay a 10% deposit. This deposit is non refundable once you've signed the contract. If you decide to pull out then you loose the deposit. If the vendor decides to pull out then he is required to refund double the deposit. This contract binds both the vendor and buyer to the sale.

A date will then have to be set with the notary to have the escritura de compra e vende drafted up. This has to be signed in the presence of the notary by both the vendor and buyer or their representatives. The notary will check that the stamp duty has been paid, ask to see receipts proving tax has been paid and that the property's required habitation license exists. Then upon payment of the remaining purchase balance and the notary fees the title of ownership will pass from the vendor to the buyer. You will then need to register the property with the land registry by sending a certified copy of the escritura to the registry office.

Virtually all the work above can be carried out by a solictor (advogado). It is normal to set up a power of attorney with your solicitor to allow them to act on your behalf during the transaction. This will save you having to make multiple trips back to the Algarve.

The stamp duty (IMT) rates are as follows:

Value in €	IMT tax rate	Deduction in €
Up to 80,000	0%	0
80,000 - 110,000	2%	€1,600
110,000 - 150,000	5%	€4,900
150,000 - 250,000	7%	€7,900
250,000 - 500,000	8%	€10,400
Over 500,000	6%	0

All rural properties will be charged at 5%

We aim to make your experience of buying a property in Portugal as stress free and as smooth as possible.