Our experienced and qualified staff are on hand to give advice and guide you through Portuguese property and property tax laws.
Below is a brief buyer's guide designed to give you an overview of the buying process. Please bear in mind that this is only given as a guide and can be subject to change, so if you have any specific questions, please email Xavier Rodrigues or call on + 351 282 411206.
The following information is meant as an outline to the legal process involved in purchasing property in Portugal. All property laws are subject to change so always ask for the latest information before purchasing.
AGENTS
If using an estate agent make sure that they are Government Licensed and carry insurance policies as required by Portuguese law. If buying privately, always use a qualified lawyer.
PROMISSORY CONTRACT (CONTRATO DE PROMESSA)
Having found the right property, the first step in the process is to sign a contract of sale (Contrato de Promessa de Compra e Venda). This states the buying and selling conditions and is a legally binding document which should be registered by the NOTARY ( public official authorised to certify deeds, contracts, copies of documents etc.). The promissory contract normally requires a deposit of a minimum of 10%, which is liable to forfeit if the buyer does not complete. Should the seller not complete then he is bound by law to repay twice the deposit received.
TRANSFER TAX (SISA)
Most purchases of property carry a property purchase tax known as SISA. The table below sets out the current charges. As this tax is liable to change at short notice we suggest you ask for the latest information before purchasing. Please note that the calculation is made on the declared value of the property and not the real market value.
| Declared Value | Percentage | Deduct |
| Under €83,500 | Exempt | 0 |
| €83,500 to €114,800 | 2% | €1,670 |
| Example - € 85,000.00 Sisa= (€1,700 - €1,670) = €30.00 | ||
| €114,800 to €156,500 | 5% | €5,114 |
| Example - €115,000 Sisa = (€5,750 - €5,114) = €636 | ||
| €156,500 to €260,900 | 7% | €8,244 |
| Example - €160,000 Sisa = (€11,200 - €8,244) €2,956 | ||
| €260,900 to €521,700 | 8% | €10,853 |
| Example - €300,000 Sisa = (€24,000 - €10,853) = €13,147 | ||
| €521,700 upwards | 6% | 0 |
| Example - €600,000 Sisa = €36,000 | ||
| Building plots and land for construction is subject to SISA at 6,5% regardless of price. | ||
| Rustic land is subject to SISA at 5% regardless of price. | ||
DEEDS (ESCRITURA)
Once all the above has been completed, and the land registry has been checked to ensure that the property is free of any charges, then the deeds can be signed. Both parties (or their legal representatives) must attend the notary office for the reading and signing of the deeds. The original copy of the deeds stays in the notary office and the buyer receives a stamped, notarised copy which has the same legal value.
REGISTRATION
The registration of the property at the Land Registry Office (Conservatoria) after the deeds are signed, is the responsibility of the buyer or his legal representative. You must also apply for a tax number (numero de contribuinte) for the eventual payment of rates (contribuiçao autarquica). Fees for deeds and registration vary between 1% and 1.5%.
OFFSHORE AND LOCAL COMPANIES
Some properties may be owned by offshore or local companies, the property being the sole asset of the company. Purchasing the shares of the company means that the property remains in the same name thus avoiding paying the transfer costs of the property (i.e. SISA, Notary and Registration fees). Share transfer costs normally range between £300 to £750 with annual company costs at around £300. When is the offshore buying a property the sisa tax is 15% plus registration and notary fees.
COMMERCIAL OR INVESTMENT ACQUISITIONS
It is advisable to appoint a good accountant to advise on company formations etc. Should you not know any, we can recommend several in the Algarve. (for more information, please contact us.).
SUMMARY
Perhaps the purchasing of property may differ somewhat from your own country, and, to some, the system here may appear a little daunting, but providing you take the right steps by employing qualified, licensed and experienced people, you will find the process trouble free and safe.
