Purchase and Sale

Purchase and Sale

Purchasing a property is not a difficut task, once you have found the property of your dreams, it is advisable that you instruct a local lawyer to assist you with various stages of purchasing your home, and with their reliable assistance the purchase will be a simple , straight forward procedure.

1) If you are not a Portuguese resident, you must first apply for the Portuguese tax number (Portuguese Fiscal Number) to begin the purchase process. Your lawyer will be able to obtain this on your behalf.

2) The lawyer that you have instructed will carry and intensive background research on the legal documentations to ensure that all the paper work is in order. It is also advisable to have the property surveyed "seal by a licensed surveyor". Once all documentations have been verified, your lawyer will then prepare a Promissory Contract.

3) The Promissory Contract (Contract of the Promise of sale) is a binding document, which will bind the purchaser and the seller to the property, upon signature of both parties. The purchaser will then deposit 10% of the purchase price to the seller, usually via the seller´s lawyer´s client account. If for some reason the purchaser does proceed with the purchase of the property, the deposit is non- refundable, on the other hand, if the seller breeches the contract, He/She is liable to refund the deposit in the doube to the purchaser.

4) The final stage is the Deed (Deed of the Sale) which is the transfer of ownership from the seller to the purchaser. This normally takes place 3-4 weeks upon of the Promissory Contract or on the agreed date stated between both lawyers on the contract. The purchaser will then need to pay the remaining balance due, plus Stamp Duty (IMT) and Notary & Transfer Fees (Notary and Transfer Fees are 0.8% of the purchase price). Your lawyer will explain these details for you.

Stamp Duty Tax (IMT) "Munincipal tax on Sale of Real Estate"

This is the municipal tax levied on the transfer of Real Estate located in the Portuguese territory, these rates can vary according to the value of the property.

(Tabel 2020 Link)

Rural Property at a flat rate of 5%

Urban Properties and others at the flat rate of 6.5%

Corporate Ownership (Off-Shore)- there are no Stamp Duty and Notary fees in the case of the share transfer process, although the costs involved to transfer the shares to the new beneficial Owner can vary between GBP 1.000 TO GBP 2.000, payable to the management company.

Municipal Property Tax (IMI) -This is an annual property tax and the calculation is based on the VPT rateable value of the property. It is paid in two or three annual instalments, depending on the property´s value.

IMI is an Urban Property and can vary between 0.3% to 0.45%, depending on the local council

IMI is the Rural Property (non-urban) is rated at 0.8%

AIMI -New Additional Municipal Property Tax ( Additional Municipal Tax on Real Estate).

If you own more than one property all worth over €600.000 in Portugal you are liable to pay the new wealth tax AIMI. Note that this value is calculated on the Property´s VPT (rateable value).

There is no AIMI on properties which VPT value is below to €600.000.