Buying A Property In Portugal – Several Important Things to Consider
Buying property in Portugal can sometimes work out cheaper than monthly rent payments. For buyers, property prices in Portugal are on the rise as the economy recovers but are still relatively low following the country’s economic and Covid-19 crisis.
Although prices are increasing, it may still take time to make a profit on Portuguese property. As the market has only started to recover, Portugal still represents a riskier housing market than some other European countries, although there is also the potential for much higher yields in the long term.
Once you’ve found a property for sale you’d like to make an offer on, it’s advisable to invest in the services of an independent solicitor, especially if you’re not a fluent Portuguese speaker. Your solicitor can take charge of verifying contractual information and help arrange a house survey to check if there’s anything wrong with the property.
A notary differs from your independent solicitor in the sense that a notary is essentially a ‘middleman’ to oversee the transaction. golden visa. You can find a notary either locally or through directories such as Notaries Europe or the European Directory of Notaries. Once you’ve had your offer accepted, your notary will inspect the details of the transaction and check the details of the property with the Land Registry (Conservatoria de Registo Predial) and Inland Revenue (Repartição de Finanças).
Once this is signed, both parties are then legally obliged to finalise the transaction. At this point you will be asked to pay your deposit and arrange a completion date, before paying IMT (property transfer tax, explained below) (golden passport). Finally, the ‘Deed of Purchase and Sale’ (Escritura Publica de Compra e Venda) is signed and the property is registered in your name.
There are a number of additional costs involved and to be aware of. The most significant cost is the property transfer tax (Imposto Municipal sobre Transmissoes, IMT). If the property is your main residence, you won’t need to pay IMT on the first EUR 92,407 of the purchase price. After this, it’s reduced using a scaled system.
IMT costs for residents: Up to EUR 92,407: 0%EUR 92,407–126,403: 2%EUR 126,403–172,348: 5%EUR 172,348–287,213: 7%EUR 287,213–574,323: 8%EUR 574,323+.