Portugal: Guide to Buying Costs and Procedures

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Buying costs in Portugal range from low to moderate

How high are realtors’ and lawyers’ fees in Portugal? What about other property purchase costs?

How difficult is the property purchase process in Portugal?

There are no restrictions on foreign property ownership.

The process of property purchase in Portugal is quite straightforward. Once a buyer has found a suitable property the next thing to do is to hire the services of a lawyer who will guide and assist the buyer through the process.

A lawyer’s task usually involve drawing up contracts and initiating the process of inspecting the property’s title insuring that no legal snarls will come up after the transfer. A search will be made to check the land registry (Conservatoria de Registo Predial) title at the local municipality and another search at the Inland Revenue (Repartição de Finanças) to ensure the tax registration on the property and that there are no unpaid charges. A fiscal number (Numero de Contribuinte) will be acquired for you through the local tax office as this will be necessary for most transactions in Portugal.

If the buyer is satisfied with the property and decides to buy a promissory contract (Contrato de Promessa de Compra e Venda), details of the conditions of sale and other agreements regarding the transfer will then be drawn. Once this has been signed and notarized, both parties become legally bound to see the transfer through. A deposit 10% to 30% of the purchase price is usually lodged at this stage and the parties will agree with the notary to record a date for the completion of the purchase. The buyer’s next task is to get a municipal pay property tax or Imposto Municipal Sobre Transamissões-IMT.

The transaction ends with the execution of the Deed of Purchase and Sale (Escritura Publica de Compra e Venda) which is signed before a notary and officially recorded. At the same time the balance of the purchase price is paid according to the provisions of the Promissory Contract. The property will next be registered in the new owner’s name at the Conservatoria de Registo Predial. After which the transfer is complete.

Registering a property in Portugal requires five procedures and these take 83 days to complete.

Footnotes to Transaction Costs Table

The round trip transaction costs include all costs of buying and then re-selling a property – lawyers’ fees, notaries’ fees, registration fees, taxes, agents’ fees, etc.

Legal Fees:
Solicitors typically charge between 1% and 2% of the purchase price, minimum of €1,000.

Notary and Registration Fees:
Fees for notary and registration add around 1% to 2% to the buying cost.

Real Estate Agent's Fees:
In Portugal, agent's fee is paid by the seller, 3% to 5% plus 21% VAT.

IMT or Municipal Transfer Tax
The Municipal Transfer Tax (Imposto Municipal sobre a Transmissao Onorosa de Imoveis or IMT) is calculated against the purchase price or taxable value, whichever is higher, on a sliding percentage scale which changes annually.

Urban residential properties worth more than €100,000 (villas and apartments) are taxed at 2% to 8%, with certain deductions. Tax deductions for residents are higher. Note also that the maximum amount where 6% tax is apllicable is lower for non-residents.

Notary and registration fees:
Fees for notary and registration add around 1% to 2% to the buying cost.

Portugal - more data and information

• How landlord-friendly is the law in Portugal?

Your Comments

posted by marion starling | 2007-07-01

secretary, uk

posted by George Poon | 2007-08-06

IT, Australia

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