Country Buying Guides - Portugal

The conveyancing process

• Independent Lawyer
It is essential to use an independent lawyer with a legal knowledge of both the English and Portuguese legal systems, who are able to translate the documents and explain the terms to your full understanding.

• Due Diligence
It is important to carry out due diligence on the property you are purchasing in order to ensure there are no encumbrances on the property. Your independent lawyer will do this on your behalf.

• Costs
Notary fees are charged in accordance with a sliding scale of charges set by the Portuguese government, which vary depending on the price of the property and the amount of work the notario has done to prepare the documents. Stamp duty is payable in Portugal at the same time as the Notary fees, these can range depending on area, costs start from 0.5%

• Promissory Contract
It is usual for yourself and the vendor to initially enter into a Promissory Contract (Contrato de Promessa de Compra e Venda). This Contract stipulates all the terms and conditions concerning the transaction. It is signed and registered at the Notary’s Office. This Contract is legally binding on both parties and the law requires the vendor to repay twice the deposit should he withdraw from the sale. Likewise, it the buyer fails to complete he forfeits the total of his deposit.

• Fiscal Number
You must ensure that you apply for, and obtain a fiscal number (Numero Fiscal de Contribuinte). This can be obtained from the local tax office (Reparticao de Finanςas). Your independent lawyer can arrange this for you.

• Municipal Payment
Prior to the actual purchase of the property, the purchase will be subject to a payment named (IMT - Imposto Municipal sobre Transmissões). This must be paid to the local Tax Office closest to the property. The amount is based on and relative to the cost of the Property being purchased. In exceptional instances, you may be exempt from paying this Tax.

• The final Deed
The final deed must be signed by both parties in front of the selected Notary (Notario). The Notary, prior to the act will check of sale, that all the necessary documents are correct to ensure that the sale can proceed according to the facts provided. It is at this point that payment is normally completed to the vendor and the balance of purchase has to be made according to the signed Contract. This act of sale is recorded by the Notary, in his official books and will issue you with a photocopy of the entry as proof that the sale has officially taken place.

• Registration
Upon completion of the formalities at the Notary’s office, you should register the final deed at the Local Tax Office. The newly acquired Property should also be registered in your name at the Land Registry (Conservatoria do Registo Predial). It is strongly recommended that this registration is made immediately, as a preventative measure against any possible financial abuse by the previous owner.

• Inheritance
Most foreign legal systems’ inheritance law is different to our system, hence it is extremely important to use your independent lawyer to help you make a will so that in the unfortunate event of your passing, your wishes and not the word of the law is followed.

In Assocation With The International Property Law Centre LLP