In conjunction with the launch of it’s latest online publication, “Going To Live in Portugal”, HowTo.co.uk has prepared a short guide before you buy your dream home in Portugal.
Thousands of people each year move abroad in order to fulfil their dream of living in Portugal. However, the process when you come to buy property in Portugal differs from that in the UK. So what do you need to look out for when purchasing that dream home?
The Process
Property/Land Plans – once you’ve found a property, obtain the property/land plans so you can look at the dimensions and square metres. This may give you some bargaining power.
Inspections/Surveys – it’s important to get the property inspected and a report obtained. This should show up any defects and long-standing problems with the property meaning you will have to budget for repairs. This may also increase your bargaining power.
Conveyancing – this work is undertaken by your solicitor and involves all the legal formalities, liaising with the seller’s lawyers, and overseeing the whole process. If you grant your solicitor power of attorney, all the stress of the Portuguese bureaucratic system can be alleviated.
Promissory Contract – once you are satisfied with all of the above, the process can move to the drafting of the contract. If you back out at this point once the contract is signed, you will lose your deposit.
Providing the funds – at this point, you will need to pay the 10% deposit and have the funds available for the final payment on the property.
Transfer tax – in response to avoidance of taxes and underpayment, new tax regulations came into force in 2003 stipulating that all properties are to be subject to valuation according to strict criteria. This, in brief, will take into account:
• Cost of the building
• Size
• Type of use
• Location
• Quality of property and level of surrounding infrastructure
• Age
The taxes range from 0-6%. Properties purchased through an off-shore company are liable to a 15% tax.
Deeds – the escritura is the official deed of transfer from the vendor to you. It is signed by either you or your solicitor at the office of the Notary Public, and stays with the notary for records.
Registering the property – this is carried out at the local Land Registry office. You will need to bring with you a legalised copy of the escritura and the property tax certificate obtained by registering at your tax department. You will fill out a land registry form and pay a small fee.
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-Ends-
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