Once you have made a verbal agreement to purchase a property, a solicitor should be appointed by you to check the legal status of the Property you wish to buy. Your Portuguese lawyer will need a power of attorney (Procuração) to be able to act on your behalf.
Each property needs the following documents:
– title deeds
– official tax documents
– habitation licence. (Licença de Habitação)
At this point, your solicitor requests a fiscal number on your behalf from the Tax Office (Finanças).
Promissory contract comes next and will be drawn up by the buyer’s solicitor including the price, the payment schedules if staged, the completion date and any special terms and conditions agreed by both parties. (Contrato de Promessa de Compra e Venda)
The agreed deposit, normally 20% of the purchase price, is paid to the seller.
The final deeds will be signed at the notary’s office. (Escritura Pública de Compra e Venda). The remaining sum of the purchase price is paid and the notary enters the transaction in the official records.
The period of time between the promissory contract and the signature of the final deeds can vary, but in general it is between 30 and 60 days.
Presenting proof of the “escritura” to the “Conservatória do Registo Predial”, the property can then be registered in the name of the new owner.
The notary and land registry fees are the responsibility of the buyer and will cost around 2% of the purchase price.
Portugal is one of the most inheritance tax friendly environments in Europe, along with reductions in Capital Gains Tax and Corporation Tax, the abolition of Inheritance and Donation Tax ensures that immediate family members will not be liable to pay any death duties on inheritance of a property owned in Portugal.
