The property purchase process is quite straightforward in Portugal. If the paperwork is in order, the transaction just takes a few weeks. After having found a suitable real estate property, it is advisable that the buyer hires a professional lawyer who can handle the entire transaction.
· The lawyer has the task of checking the property titles in the Conservatoria de Registro Predial – the Land Registry – and in the Repartição de Finanças – the Inland Revenue – in order to be sure that there is not any unpaid charge.
· The buyer must obtain a Numero de Contribuinte – a fiscal number – from the Finanças – the local tax office.
· When the buyer is ready to purchase the property, a legally-binding Contrato de Promessa de Compra e Venda must be signed in front of a Notary. It is a promissory contract containing all the details and the conditions for the sale. It also establishes the date by which the balance of the purchase price must be paid.
· After the promissory contract has been signed and notarized, a deposit must be paid. It amounts to 10-30% of the final purchase price. If the buyer withdraws from the purchase, he/she forfeits his deposit. If the seller drops out, he/she must repay twice the deposit.
· Depending on the value of the property purchased, the buyer must pay the Imposto Municipal sobre Trasmissões (IMT) – a municipal property tax.
· The final step is the signing and registration of the Escritura de Compra e Venda – the final Deed of Purchase and Sale – that takes place in front of the Notary public. The final payment must be made after the signing of this final contract.
· The property is next registered in the new owner’s name in the Conservatória do Registo Predial – the Land Registry – and the trasfer is complete.
Foreign buyers can sign a document – the Procuração Publica – to give their Power of Attorney to a third person who can act on their behalf during the transaction. This document can be signed in a Portuguese Consulate in a foreign country.
In accordance with Portuguese law, overseas buyers must be assisted by a translator during the signing of the purchase deed. Before the signing, the contract must be translated verbally to the purchaser in order to be sure that he/she understands everything he/she is signing.
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