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Buying real estate in Portugal is a unique opportunity, thanks to the country's economic stability, quality of life, and diverse landscapes. The market offers options for all profiles, from profitable investments on the coast to the tranquility of the interior, with legal certainty and growing property values. It is important to know the steps and procedures involved.

Property acquisition process:

Acquiring a property for sale is vitally important for completing a real estate transaction as quickly as possible. The quality of the information gathered at the time of acquisition is a key factor, and this can be found in the following documents relating to the property:

 

- Land registry certificate (for all types of properties)

- Property logbook (for all types of properties)

- Energy certificate (all residential and commercial properties)

- Technical data sheet for the property (after August 2004)

- Use licence (buildings constructed after 1951)

- Certificate (buildings constructed before the entry into force of Decree-Law No. 38382 of 7 August 1951)

- Copy of the deed of sale for verification of possible capital gains to be paid

- Floor plan or plans of the property (buildings constructed after 1951)

- Information on the value of the condominium (buildings in condominiums, constituted as horizontal property)

 

Property sale process:

The purchase of a property is always an important moment for any individual or family, whether it involves bank financing or not. This process must be carried out with complete legal certainty.

The documents collected during the fundraising process and updated will be used in the deed of sale.

In the bureaucratic process, the buyer has two options, which is a personal choice. For Novusmed, the most important thing is that our client chooses the alternative with which they feel most comfortable, as follows:

a) Appointment of a solicitor or lawyer. With this option, the solicitor or lawyer collects all the documentation, verifies it, prepares the promissory purchase and sale agreement, and delivers it to the notary for the execution of the notarial deed of purchase and sale.

b) Opt for Novusmed's service

With this option, the entire process will be handled by Novusmed's legal department, free of charge.

 

Procedure for purchasing a property:

1 – Choose the property based on your needs and interests, agree on the terms of purchase.  

If you need a mortgage, there are a number of steps to follow, see below.

2 – Formalise the property transaction so that the selected property is suspended or withdrawn from sale by the estate agent and all parties are committed to the previously agreed conditions, through a promissory purchase and sale agreement (CPCV).

In a promissory purchase and sale agreement, both parties must be registered and identified, the property that is the subject of the transaction must be identified, the sale price, the form of payment and the agreed terms must be specified. As a general rule, the deposit is around 10%, with no limit or requirement for other amounts. The promissory purchase and sale agreement is not mandatory, but it is advisable.

At this stage, before the transaction, the existence of possible tax debts and liens should be verified.

3 – If bank financing is required, request assistance from our services, where all information and support will be provided

4 – Schedule the deed at the notary's office, as agreed

 

Mortgage Loan Application Process:

In order to obtain bank financing, the bank must first assess the buyer's debt capacity, i.e. the so-called ‘debt-to-income ratio’, and evaluate the property to be purchased.

The loan is secured by the property itself, although another property may sometimes be offered as collateral.

In bank financing, each case is analysed according to its specific characteristics. Please ask us for clarification and support.

 

Public Deed of Purchase and Sale:

The purchase is completed with the signing of the notarial deed of purchase and sale at a notary's office and the property is registered in the buyer's name. At this point, the full price must be paid (or the remaining balance, if a deposit has been paid previously).

 

IMT and Stamp Duty:

IMT (municipal tax on onerous transfers of immovable property), if payable, must be paid before the notarised deed of purchase and sale is signed. The tax brackets are defined each year in the general state budget (as a rule, these two taxes can be paid at the notary's office itself, by ATM payment).

The amount of IMT depends on the intended use of the property and the purchase price.

IS (stamp duty) is always payable at a rate of 0.8% of the sale price.

 

Capital gains tax:

Whenever there is a gain between purchase and sale, it must be declared to the Tax Authority. The amount payable will depend on a number of factors. In the case of the sale of your permanent residence and if you reinvest in another permanent residence, you are exempt from paying this tax. 

Please contact our services for clarification and support.

 

IMI

Municipal property tax is an annual tax levied on all properties, with the revenue from this tax going entirely to the municipality.

Anyone who owns the property on 31 December is required to pay this tax. It is calculated as follows: Percentage rate x Property value

The rate is set each year by the municipal assembly and varies from 0.3 to 0.8% depending on the type of building.

The asset value is calculated as follows:

VP = Vc x A x Ca x Ci x Cq x Cv

VP – Taxable asset value

Vc – Base value of constructed buildings (set annually by the state budget)

A – Gross construction area + gross dependent areas

Ca – Allocation coefficient

Ci – Location coefficient

Cq – Quality and comfort coefficient

Cv – Age coefficient (age of the property)   

 

Loan/mortgage costs:

In bank financing, the property will be secured by a mortgage in favour of the financial institution, which has an additional cost of 0.6% stamp duty on the value of the financing. The costs of the banking process should also be taken into account.

 

Notary and registration:

As a reference, notary fees in the case of a ‘simple deed of sale’ are around €500. If there is a mortgage loan, the cost of an additional deed must be taken into account, as in this situation we have a ‘deed of sale with mortgage loan’.

Each registration at the land registry office costs around €250.

Notary costs:

Without bank financing: Cost of the deed + registration costs = Y

With bank financing: Cost of the deed + cost of the mortgage deed + mortgage registration = Y

 

Real estate agent:

For the services provided and contracted through the signing of the real estate brokerage contract (CMI), the real estate brokerage company is entitled to be remunerated for the services provided. This remuneration results from the agreement between the seller of the property and the broker. As a rule, the commission is 5% plus VAT, but this may vary.

The agent must be committed to providing the best service in promoting the property.

 

Lawyers or solicitors:

The fees for the services provided by these professionals, solicitors or lawyers, vary from 1% to 2% plus VAT on the purchase price.

Please note that these amounts may vary depending on the services to be provided.