Property for Sale in Portugal
The world wide property boom reached Portugal a number of years ago with vast areas of coastal land in the Algarve being developed for prime real estate, golf courses and luxury housing complexes.
A huge 48% of all tourists to Portugal stay in the Algarve, and indeed many go on to make their homes there, with about 20% of Algarve residents now British.
To help understand the procedures and legal acts that are involved in acquiring a property in Portugal. It is always recommended that qualified advice be sought in any purchase.
Use a Government Licensed Estate Agent.
This license is granted by the State according to a number of required qualifications on the part of the Estate Agent. It mainly serves as a guarantee that any individual Estate Agent must use certain forms of approved documentation to implement his functions in his profession. The Licensed Estate Agent is also bonded by the State in the form of an Insurance Cover that may be claimed against in the case of proven dispute.
It is quite normal for both Parties to initially enter into a Promissory Contract detailing the conditions of Sale - "Contrato de Promessa de Compra e Venda". This Contract is then legalized by registering it in the Notary Office. This Contract is legally binding on both sides and the law requires the seller to repay twice the deposit should he withdraw from the sale. Likewise, it the buyer fails to complete he forfeits the total of his deposit. There are specific laws relating to this act that a Lawyer will be able to explain.
It is often found practical for the buyer to appoint a third party such as their Lawyer to act for them legally in the matter. A document named "Procuração Publica" is prepared with the necessary details and then in the Notary Office this document is signed by the person(s) granting the "Power of Attorny" and registered by the Notary. This official document can also be created in the Portuguese language outside Portugal in a Portuguese Consul in a foreign country, or, in a Notary in the language of the country concerned. In the case of the latter the document must have the Seal of the Notary and an Apostil attached. An official translation into the Portuguese language will later be necessary.
Every buyer is required to obtain a Fiscal Number from the local Tax Office (Finanças).
Prior to act of purchase, the purchase will be subject to a Municipal payment named "IMT - Imposto Municipal sobre Transamissões" which as from the 1st of January 2003 replaced the previous tax payment named "SISA". This payment is paid in the local Tax Office nearest to the property. The amount to be paid is related in terms of percentage by "platforms" to the cost of the property being purchased. In limited cases the buyer will be exempt from paying this Tax.
