Purchasing a property is not a difficult task, once you have found the property of your dreams, it´s advisable that you instruct a local lawyer to assist you with the various stages of purchasing your home, and with their reliable assistance the purchase process will be a simple, straight forward procedure.
1) If you are not a Portuguese resident, you must first apply for a 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 an intensive background research on the legal documentation to ensure that all the paper work is in order. It is also advisable to have the property surveyed by a licensed surveyor. Once all documentations have been verified, your lawyer will then prepare a Promissory Contract.
3) The Promissory Contract (Contrato de Promessa de Compra e Venda) 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 double to the purchaser.
4) The final stage is the Deed (Escritura de Compra e Venda) which is the transfer of ownership from the seller to the purchaser. This normally takes place 3-4 weeks upon signature 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 & transfer Fees are 0,8% of the purchase price). Your lawyer will explain these details to you.
Stamp Duty Tax (IMT) “Imposto Municipal sobre Transmissão Onerosa de Imoveis” This is a 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.
( Link tabel 2018 ) http://www.apcmc.pt/legislacao/imt-tabelas-praticas-2018/
Rural Property at a flat rate of 5%
Urban Properties and others at a flat rate of 6,5%
For more information please check http://www.portaldasfinancas.gov.pt/at/html/index.html
Corporate Ownership (off-shore) – there are no Stamp Duty Tax and Notary fees in case of a 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 aid in two or three annual instalments, depending on the property's value.
IMI for an Urban Property can vary between 0,3% to 0,45%, depending on the local council
IMI for a Rural Property (non-urban) is rated at 0,8%
AIMI- New Additional Municipal Property Tax (Adicional Imposto Municipal Sobre Imoveis).
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.