1. We use a promissory contract (contrato de promessa de compra e venda), which is a legally binding contract which seals the deal at the agreed price. A 10% deposit needs to be paid (which can be done by an international bank transfer). This contract details the property, the price and describes how the deposit and balance of payment must be paid. We cannot consider a property sold until the full deposit has been received or the bank issues a confirmation that the money has been sent.

2. We only advertise our properties once we have secured them, although we may still be in the process of organizing the paperwork. Once we have completed the paperwork we can then organize the Deed of Sale (Escritura) at the Notary office (Notário) for the new owners. Usually your solicitor will sign the papers at the Deed of Sale (Escritura) on your behalf with Power of Attorney or you will attend the Deed of Sale (Escritura) and the solicitor or a local translator will translate.

3. You will need to obtain Portuguese Fiscal Number (Número Fiscal de Contribuinte) to buy a property in Portugal (also you'll need it to open a bank account (you'll find it beneficial to open a Portuguese bank account to pay for the purchase of property, taxes, solicitors, etc), have electricity, water, phones...). These are easily obtained from the local tax office (Repartição de Finanças) going in person with a proof of identity (passport, identity card or residency card) using an address in Portugal of either your new home or that of a friend, if you are using a solicitor he will organize them for you or we will be happy to help you.

4. The registration of the property into the new owners name is the buyer's responsibility and happens after you have completed the purchase at the Deed of Sale (Escritura) and which is essential should you ever wish to re-sell a property. Your solicitor would organize the registration as part of their service. If you're not using a solicitor we can organize this for you.

The buying fees:

 2. Any purchase tax - IMT (Imposto Municipal Sobre Transmissão Onerosa de Imóveis) payable:
You must pay any purchase tax (IMT) at least 3 days before you complete the sale and proof of payment must be shown to the notary.

Update January 2007: There are now 2 different scales for IMT, one applies to permanent residences and one for second homes, see below:

IMT for land only (prédio rústico) is 5%.

IMT for construction & urban properties not for habitation (eg Armazéns) is 6.5%.

For mixed land (prédios mistos) the rustic part attracts the flat rate of 5%, with the urban part either as below or 6.5%.

IMT on other properties is on a sliding scale based on the value of the property:

Permanent residences:

Second homes/holiday homes:

Example:
A property costing 110,900 Euros would be taxed as follows:
Perm. res.: 110,900€x2%=2,218-1710= 508 = total IMT payable is therefore 508€
Sec. Home: 110,900€x2%=2,218-855= 1,363 = total IMT payable is therefore 1,363€

When buyer is an Offshore company, Tax to be paid is flat rate of 15%.

3. The property registration fees (notary fees and registration fees should be approx. 2% of the value of the transaction).
**for most of our properties notary fees, registration fees and IMT taxes should be around 1,500 - 2,500€

4. The Portuguese Fiscal Number (número fiscal de contribuinte) which costs about 6€.

5. The buyer's solicitor fee

Necessary Documents:

Certidão de Teor, from the Fiscal Department (Finanças) showing if there are any outstanding mortgages on the property and if the property is registered in the owner's name or Caderneta Predial, from the Fiscal Department (Finanças), detailing the size of the property, its location and boundaries, and a brief description. In case of land there may also be a drawing of the plot.

Certidão da Conservatória do Registo Predial that shows the registration of the property under the owner's name.

Confirmation from the Tax Department (Finanças) confirming that all the rates bills (IMI) are paid. This is important as any outstanding IMI tax will stay with the property and be the responsibility of the new owners.

Proof of payment of IMT.

Houses built or altered after 31 December 2003 should have a "Ficha técnica de habitação", containing information about the property such as builder's details, type of materials used and suppliers, etc.

Identification documents and tax numbers of the owners and buyers.

Power of attorney and the representative's identification document and tax number (if applicable).

Being the seller our company, we will also need to provide: Certidão Comercial, issued by the Conservatória do Registo Predial which identifies the partners as well as what powers they have in the company; Identification documents and tax numbers of the company partners/owner.

Every year the owner of any property is subject to pay an annual Tax named "IMI" (formerly know as "Contribução Autarquica"), which can be related to the UK word "Rates". This charge is levied each April relating to the previous year and if the amount exceeds €250.00 then it will be divided into two equal bills, the first for payment in April, and the second, for payment in September. It is most important to pay this charge as the failure for doing so eventually results in the property being placed for sale on the market by the State and goes to the highest bidder.

IMI - (Imposta Municipal de Imóveis)
This is a municipal tax is levied on the taxable estate value on all properties located in Portuguese territory. The taxable person is the named owner of the property, usufructuary and surface rights holder, as on the 31st of December of the year in which the tax is related.

The IMI Rates are calculated on the following basis: for Rural properties 0,8%; for Urban properties-between 0,2% to 0,5% (variable from council to council and reviewed annually)

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The above notes are presented in a general form and to our best knowledge correct. We cannot guarantee that what we have written is infallible as rules change and interpretations differ.