Buying a house in Portugal laws

We would advise anyone buying any property in Portugal to aquire the services of a lawyer.  While there are excellent laws for safeguading the buyer and seller it is best to have the matter safe and all dvice provided by a professional. We have as a partner and excellent lawyer, but of course you can find your own through  the information here, or throught the internet.

Lets us assume you have found a property to your liking and you wish to proceed with a purchase. Having negotiated a price you will need to confirm and pay a deposit to hold the property. This of course done through your legal representative. Your lawyer will also do the land registry searches, taxes and  any other checks that need to be carried out to ensure your future home is all legal and has no other claims or costs involved.

You will need to obtain a Fiscal Number  in your name to buy a property. This can be done quite easily  by visiting the local council. It is not difficult or complicated and most Portuguese people speak enough English to assist you. I think that  doing things like this are good as you get to know the local town and where the   council departments are. You may later need to visit other departments and so his can be your first visit.

If you do not wish to do so your Lawyer can direct  you.

When you have decided on the property you like the normal deposit is 10%, but the amount is  entirely your choice. The deposit can be held by your lawyer, or paid to the seller. That again is between you and the other two parties and agreed at the time as to the best policy.

In portugal there are safeguards and you should be aware that if  after paying a deposit you change your mind you lose the deposit. If however on the other hand the seller changes their mind, they have to pay the prospective buy  buyer back double the amount.  If you pay £10,000 deposit you lose that if you chnage your mind, but receive £20,000 if the seller changes their mind. However you can agree between you an alteration to these terms if you wish.

All this of course should be established before you agree and sign any contract. Once you have signed a legally binding contract the terms are applied and if you can not or will not  complete or pay any agreed sum, then you may lose a deposit. You might also be liable for any costs. 

You will by law be required to pay IMT or Transfer tax and Stamp Duty. These fess depend on the value of the property and circumstances. Usually between 0% and 9%.

After a deposit has been made the lawyer will then carry out more check to ansure there have been no changes and then finally you can meet and pay the balance after  the reading out of terms and sale agreements and that all legal and financial matters have been verified.

At which point the deeds become the  new owners and the matter should then be registered with the land registry and tax office. Again your lawyer can do this or if you wish you can visit the offices yourself. The deeds will remain in the offices where the final transaction took place. After signing the deeds or contract of sale the document should be lodged at the Land Registry Office to register change of ownership and this should also then be communicated to the tax office.

IMI or local community annual tax ( Council Tax in UK, though very much lower in cost ) This tax is based on the property rateable value and is between 0.2% & 0.5% and is payable in April, July and November.

Rateable value is calculated upon year of Construction, the area and local amenities. If the property is your primarary home you can apply for a reduction or be exempt for a period of some years.

Capital gains tax is levied on property with a value of 1,000,000 euros or above. The amounts and time are charged depeding on your individual circumstances and several other factors. Your lawyer or accountant will advise you on the exact terms depending on your circumstances.

Stamp Duty is payable on properties over a ratable value of 1,000,000 euros. It is payable togther with property taxes such as IMI in installments.

Inheritance tax is currently not appliacble in Portugal, but you should discuss the situation regarding who the property will be handed over to in the event of your death or mental incapacity as there can be problems if this is not decided in advance and with a lawyer.

A fiscal representative can be employed to dealk with your financial matters. Though this is voluntary.


VEHICLE IMPORTATION:

This is very important information. Possibly one disadvantage to Portugal. If you import a car to Portugal and you are buying a home. you must do the following and for one vehicle only. 
per resident. After whch a tax is applied which in many cases far exceeds the value of the vehicle. There is a lot of information on the internet which is not correct. Be warned It can cost you many thousands of Euros if you do not follow the correct rules.

Within the first three months you must apply for importation at the customs office.

 There is a process to register your vehicle. Do not become confused with EU law which states you must register your vehicle within 6 months. If you leave it  5 months it will be too late to import your vehicle ‘ free ‘ of tax into Portugal.

This is what you must do.

Apply within 3 months of your bringing the vehicle into Portugal to the Customs office. Ideally you should do this within 20 days of your arrival when you intend to becoema resident.

Apply for a residents permit and go to the Consulate in Lisbon to prove that you are now a resident of Portugal. Best to take all your vehicle documents with you and you will need your EU Certfificate of Conformity.They will then supply you with a certificate. Currently that costs about €200.00 plus you time and fuel if you live in the Algarve or Porto etc.

Obtain your NIE number That is a tax number which everyone has to have.

You must have  your EU vehicle certificate of conformity. 

The vehicle must have been purchased by you and registered in your name for 12 months or more in the country of origin. UK, Germany, France, etc.


You willthen have to have a Portugues MOT when all the documents  correctly  stamped and approved have been shown to the customs


Remember you will have to have your headlights changed if your importing a right hand drive from UK. Some cars ( Rover 75, Volvo have a switch to do this. others will require the purchase of new headlights and the fitting this can be between €500 and #1500 depending on the vehiscle.


The vehicle is for private use only.







© kevin fitzmaurice-brown 2018