Are any permission needed?

Can I negotiate on the purchase price and conditions?

Do I pay a deposit to the vendor?

When are the contracts exchanged?

What if I Change my Mind?

Is a Portuguese Lawyer Necessary?

How do I Choose a Lawyer to represent me?

What will the lawyer do for me?

Do I need anyone other than a lawyer?

Registering your Property

Can you assist in raising a mortgage?

Are any restrictions in transferring money to Portugal?

Are there any additional fees to pay like stamp duty in the UK?

What are my ongoing commitments and obligations?

What happens in event of death?

Are properties freehold?

Who pays commission?

Any more questions?

The next step

Usually there’s no need of special permission to purchase a property in Portugal (unless it is in a sensitive military area).

Can I negotiate on the purchase price and conditions?

When you choose your property the price, terms and conditions are discussed with the seller/owner. Your offer may be subject to a mortgage, or you may delayed completion. This must be stated at the time of the offer. We can recommend a lawyer who can help you with this process.

Do I pay a deposit to the vendor?

The deposit is not paid to the vendor, but to the selling agent or to your lawyer. The minimum required is 5000€. You can pay the reservation deposit by cheque or telegraphic transfer and it will reserve the property until the exchange of the contracts. Then you should pay more 10% of the purchase price.

When are the contracts exchanged?

After the vendor accept your offer and the payment of the reservation deposit is done the promissory contracts are exchanged. This happens within three or four weeks after you issue your lawyer “with a limited power of attorney for the conveyance of the selected property has been issued and the necessary funds have been transferred to his or her client account. Your legal representative would have made steps to make sure the property is free of debt or problems as above, and the promissory contract will set out the agreed selling price and the date of completion at the notary. It is normal practice at this stage to pay 10% of the purchase price”.

What if I Change my Mind?

With the signature of the promissory contract you are committed with the vendor and already paid 10% of the total value of the property. If you choose not to complete the purchase you will loose those 10%.
If you haven’t signed the promissory contract yet you will loose the reservation deposit (5000€).
If instead of you, the vendor decides not to complete the sale, he should return all the deposit in double.

Is a Portuguese Lawyer Necessary?

As the Portuguese legal systems is different to Britain's and Ireland’s, your lawyer will make checks and enquiries on your behalf, the whole process is little more troublesome than the buying and conveyance of a property in the UK or Ireland.
Problems can arise when prospective buyers decline to use a lawyer and later find legal complications, which affect their ownership rights.

How do I Choose a Lawyer to represent me?

We can recommend you a number of different lawyers who can represent you in the purchase of your property. They will speak in English with you and can be reached by phone, fax and email. The lawyer will ensure that your purchase is as trouble-free as possible. A lawyer will provide legal guarantees that the purchase of your property is free from any debts or charges, and that all fees including electricity, water and community fees are paid up to the day of completion.

What will the lawyer do for me?

When you instruct a lawyer to handle the purchase you can be sure that all important aspects will be covered.

1. The title of the property is checked.
2. The person selling the property actually owns it.
3. Whether there are any charges on the property.
4. Building licenses and permissions are in order, where applicable.
5. The terms and conditions stipulated by the seller are checked for fairness.
6. A report of the findings in then compiled for you to consider, before proceeding with the signing of Promissory Contracts.

After the signing of the contracts your lawyer will then arrange:

1. The transfer of the title into your name.
2. For any fees and taxes to be paid.
3. For the title in your name, to be registered in the Local Land Registry.

Do I need anyone other than a lawyer?

Under Portuguese law any non Portuguese, non resident purchaser in Portugal must have a Fiscal Representative in Portugal. This Representative will arrange your Portuguese Tax Number (needed for the purchase) and manage any taxation liabilities that you may have on a ongoing basis. This covers such things as Council Tax, Income Tax in the event of rentals and Capital Gains Tax in the event of future sale. Your lawyer should be able to recommend a specialist in this are to you.

What is a Notary?

A notary formalizes the sale of a property; he is a public official who is present to officially certify that the title deeds have been exchanged and understood by both parties before the final payment is made and the purchase document signed. The notary is completely impartial and offers no advice.

Registering your Property
 
After the signing of the Escritura (Title Deed) your legal representative will register it to the Local Land Registry office for registration and payment of registration fees. This process takes around 1 month.

Can you assist in raising a mortgage?

We can give you advice and assistance in obtaining finance in the UK and we can recommend Portuguese banks that specialize in offering mortgage facilities to foreign purchasers where the only security required is the property or the property “to be built” in Portugal.

Are any restrictions in transferring money to Portugal?

There are no restrictions in transferring money in or out of Portugal. It’s best to transfer sterling and exchange it in Portugal. Latter your lawyer or Fiscal Representative can help you open a bank account in Portugal. In the meantime any transfers associated with the purchase should be remitted to your lawyers Client’s Account.

Are there any additional fees to pay like stamp duty in the UK?

Yes there are; usually you should allow on average an additional 6% on top of the purchase price, to cover fees including the notary, property registration and transfer tax. The costs depending on the property purchased are as follows:

• Notary and land registry fees around 1,5%;
• IMT Tax (Stamp Duty) 6.5% on any land purchase;
• IMT Tax (Stamp Duty) between 6% and 0% based on a siding scale depending on the sale price of apartment, townhouse or completed villa purchase.

What are my ongoing commitments and obligations?

If you spend less than 6 months per year in Portugal you are classed as non-resident. However you are obliged to:  Appoint a Fiscal Representative in Portugal who will take care of paying your local annual property taxes (Council Tax) and paying any applicable taxes on income derived from activities in Portugal, including that derived from renting your property.

If you spend more than six months a year in Portugal deemed a permanent resident and would be expected to pay taxes and social contributions. Many of the above points are requirements and income tax will usually be assessed on your worldwide income. It is common practice for foreigners living in Portugal to employ the services of an accountant or gestor to advise on this.

What happens in event of death?

Jointly owned property does not automatically pass in full to the surviving spouse or partner, but is dealt with according to the wishes expressed in a will, or under the rules relating to intestacy. Whilst it is not compulsory it is much cheaper, quicker and more straightforward to make a will in Portugal.

Are properties freehold?

Yes they are.

Who pays commission?
 
The vendor pays our commission; you the buyer pay no fees or commission.

Any more questions?

If you require any further information, or have any questions please do not hesitate to contact us!

info@silvercoast-properties.com

The next step

This is just a guide to buying a property in Portugal. Though the matters themselves are sometimes more involved than indicate here, the whole process is usually smooth and trouble free. So take the next step to owning a property in Portugal, simply contact us to discuss your needs and requirements, and/or to arrange an inspection visit.

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