Information regarding what to expect when buying property in Portugal:
Tax Number / Fiscal Number (Número Fiscal de Contribuinte)
In order to purchase property in Portugal you will need a fiscal number which is obtainable from the nearest tax office (Ministério de Finanças). You will need a proof of identity (your residency card, identity card or passport) and an address in Portugal so that the tax office can send your fiscal card (Cartão de Contribuinte).
If you do not have a Portuguese address you can use that of a solicitor or a friend. When you move into your property, remember to change your details to the new address.
It is advisable to open a Portuguese bank account, so that any bills that arise during the buying process can be paid locally.
You will need your passport, birth certificate and some proof of address in the U.K. (such as utility bills).
Transfer of large amounts of money can then be sent from your U.K account to your Portuguese one.
Promissory Contract (Promessa de Compra e Venda)
When you have chosen a property and have agreed a price, you will sign a Promissory contract (Promessa de Compra e Venda) with the owner. This states that you promise to buy the property, and the owner promises to sell it to you, at an agreed price and within an agreed timescale. You then pay a deposit (normally 10% of the purchase price) and agree on a date to complete the purchase. If you withdraw from the purchase you will lose your deposit, and if the owner fails to keep their side of the bargain, they must repay you twice the amount of your deposit. It is highly recommended that you employ a Portuguese solicitor to handle the contract.
Property Purchase Tax ("Imposto Municipal Sobre Transmissão Onerosa de Imóveis -IMT")
You must pay any purchase tax (IMT) before you complete the sale and proof of payment must be shown to the notary.
There are 2 different scales for IMT, one applies to permanent residences and one for second homes, see below:
IMT for land only (i.e.: rustic building) is 5%.
IMT for construction & urban properties not for habitation (i.e.: warehouses) is 6.5%.
For mixed land (i.e.: mixed building) the rustic part attracts the flat rate of 5%, with the urban part rated either as the chart below or 6.5%.
IMT on other properties is on a sliding scale based on the value of the property: For example, a 100,000 euro house, permanent residence is 100,000 by 2%= 2,000 minus 1,848.13 = 151.87 euros Completion of Sale (Escritura Pública de Compra e Venda).
All of the parties must agree a date to complete, and make an appointment with the Notary.
Everyone involved in the purchase/sale must attend at the Notary's office (unless you have granted your solicitor power of attorney to act on your behalf). You must have a translator present so that you understand what the notary reads to you.
Your solicitor must ensure that all the relevant documents are present.
You and the sellers will be read the Deed of Purchase and Sale which everyone will sign.
At this point you must pay the balance of the purchase price. The property is now yours, but you must still take an official copy of the escritura to the land registry (Conservatária do Registo Predial) to have the property registered in your name.
The calculation of IMI is as follows:
Type of Property & Rate
'Urbano' assessed under the former legislation 'Contribuição Autárquica' 0.5% to 0.8%.
Urbano' assessed under the IMI code 0.3% to 0.5%.
'Rustico' 0.8% Property owned by residents of tax havens 7.5%