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Buying in Portugal

The process of buying real estate in Portugal consists of a written contract of sale (“contrato promessa compra e venda”) containing the terms of the sale and a subsequent notarised sales contract (“escritura”). When the contract of sale is entered into, the buyer pays a non-refundable deposit of usually 10% of the purchase price. Subsequently, the remainder of the purchase price becomes payable when the notarised sales contract (“escritura”) is entered into.

The use of legal counsel by the buyer and seller is highly recommended and common practice.

Counsel will do the necessary due diligence including the verification of the existence of a tax certificate, an excerpt from the land registry (“registo predial”) as well as a housing permit (“licença de habitação/utilitação”). In addition, counsel will also initiate the application for a tax number for the buyer and the registration of the property with the property registry.

Property transfer tax (IMT) for the purchase of Residential Properties is:

Sale Price of Property
Rate
Deduct
< 85,500 € 0
85,500 € – 117,200 € 2% 1,710.00 €
117,200 € – 159,800 € 5% 5,225.95 €
159,800 € – 266,400 € 7% 8,421.94 €
266,400 € – 532,700 € 8% 11,085.97 €
> 532,700 € 6%
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  • – IMT is levied at a flat rate of 5% for rural and agricultural land

  • – IMT is levied at a flat rate of 6,5% for land plots for future construction

  • – IMT is levied at 15% whenever the purchase is made by an offshore company incorporated in a black listed jurisdiction.

Notary & Registration Fees are:

  • – Notary deeds: App. €209

  • – Registration: App. €150

  • – Stamp duty: App. 0.8% of the sale price.

The information provided in this document should only be used as a guideline. It does not provide any legal advice. In case of the sale or purchase of a property in Portugal we highly recommend the service of a Portuguese lawyer.