Guide to Purchasing Property in Portugal

The Portuguese property purchasing process is fairly straightforward and offers good protection for both buyer and seller.

Extra costs you will need to consider: You should allow 3-10% on top of the purchase price to cover things like:

  • Purchase Tax (IMT) which is based on a sliding scale from 0% to 6.5% of the declared value.
  • Notary charges
  • Stamp Duty
  • Legal charges usually around 700-1,000 euros. Find out how much your lawyer will charge before you instruct them to do any work!

Buying Property in Portugal – by Gabrielle Collison

In this straightforward guide Gabrielle Collison shares her tips on how to minimise the risks and enjoy a trouble free purchase.

Written in plain English, with none of the hype, this guide contains:

  • how to find reputable Portuguese real estate agents
  • case studies from home buyers in Portugal like you
  • off-plan vs new-build vs resale vs self-build
  • step-by-step Portugal house buying process flow charts
  • information on renting a property in Portugal
  • information on selling your Portuguese property
  • how to decide where in Portugal to buy your home
  • advice on relocating to Portugal and becoming a Portuguese resident
  • and much, much more …

Fiscal Number (Numero Fiscal de Contribuinte)

Firstly, to purchase property in Portugal, you will need a fiscal (tax) number (Numero Fiscal de Contribuinte). Applying for a fiscal number is a simple procedure and you will be issued with your number immediately. The cost of applying for a fiscal number is about 5 euros.

Go in person to your local tax office (Repartição de Finanças), as well as proof of identity (your residency card, identity card or passport), you will need an address in Portugal to which the tax office can send your tax bills and other communications. If you do not yet have a Portuguese address you will normally be able to use that of a lawyer, estate agent, or a friend. If/when you change address you must report to your new tax office or Taxpayers Advice Office (Serviço de Apoio ao Contribuinte). Most towns have a tax office.

Promessory Contract (Promessa de Compra e Venda)

Once you see a property you like, and have your offer accepted, you will normally sign a promessory contract (Promessa de Compra e Venda) with the owner (in which you promise to buy the property, and the owner promises to sell it to you, at an agreed price and within an agreed timescale). At this point you will pay a deposit (normally 10% of the purchase price) and agree on a date (normally sellers like to complete within 6 months but completion can be made in as little as 2 weeks if all the paperwork is in order) by which to complete the purchase. Other conditions may also be specified in the promessory contract, such as completion of any building work, connection of electricity, etc. If you fail to complete the purchase you will lose your deposit, and if the owner fails to complete the sale they must repay you twice the amount of your deposit. It is not necessary to have the Promessa de Compra e Venda drawn up by a solicitor, but we would recommend that you do.

Pure Portugal do not provide legal help or advice to anyone, neither do we accept payment or financially benefit from legal services. It is necessary that you always source your own lawyer/solicitor independently and ensure you find someone you are happy to work with.

Necessary Documents

  • Certidao de Teor, showing if there are any outstanding mortgages on the property and if the property is registered in the owner’s name.
  • Caderneta Predial, from the Fiscal Department (Finanças), detailing the size of the property, its location and boundaries, and a brief description. In the case of land there may also be a drawing of the plot.
  • Confirmation from the Tax Department (Finanças) confirming that all the rates bills (IMI) are paid. This is important as any outstanding IMI tax will stay with the property and be the responsibility of the new owners.
  • Proof of payment of IMT.
  • Houses built or altered after 31 December 2003 should have a “Ficha tecnica de habitação“, containing information about the property such as builder’s details, type of materials used and suppliers, etc.
  • Identification documents and tax numbers of the owners and buyers.
  • Power of attorney and the representative’s identification document and tax number (if applicable).

If the seller is a company, you will also usually need to provide:

  • Certidão Comercial, issued by the Conservatória do Registo Predial which identifies the partners as well as what powers they have in the company.
  • Identification documents and tax numbers of the company partners/owner.
  • Power of attorney from the other partner to the one signing the Deeds (if applicable).

Power of Attorney (<i>Procuração)

If it is not possible for you to be present to sign the escritura, you may grant someone power of attorney (Procuração) to act on your behalf.

Pure Portugal do not provide legal help or advice to anyone, neither do we accept payment or financially benefit from legal services. It is necessary that you always source your own lawyer/solicitor independently and ensure you find someone you are happy to work with.

Neighbours’ Right to Buy (Exercício de Direito de Preferência)

When a vendor has a purchaser for a rustic article (prédio rustico – land ) or a mixed article (prédio misto – an urban article inside a rustic article), and a price and date for completion is agreed, the vendor must inform all their neighbours (whose property borders the article for sale) by letter, sent by registered post. The letter must state the article number/s of the property for sale, the name/s, address/es, and fiscal number/s of the purchaser/s, the place and date of the escritura, and the agreed price. The property’s paperwork must be enclosed with the letter. By law, the vendor must wait 8 days for an answer. If no answer is forthcoming, the law assumes that no one wants to buy the property.

If a neighbour wants to purchase the property, they must be able to complete on the day that is already scheduled, and pay the price already agreed. If more than one neighbour would like to purchase the property, then there are some cases which give preference to one of them (for example if they gave up some land to build a street, or other access to the property that is for sale). If no-one has legal preference then the vendor can offer it up for auction between the interested parties and it goes to the highest bidder.

When purchasing a property you must ensure that this has been done and none of the neighbours want to purchase the property (your lawyer should check for you). If this is not done then the neighbours may still have the right to buy in the future.

Purchase Tax (Imposto Municipal Sobre Transmissão Onerosa de Imóveis (IMT))

You must pay any purchase tax (IMT) before you complete the sale and proof of payment must be shown to the notary.

There are 2 different scales for IMT, one applies to permanent residences and one for second homes, see below:

IMT for land only (prédio rustico) is 5%.
IMT for construction & urban properties not for habitation (eg Armazens) is 6.5%.
For mixed land (predios mistos) the rustic part attracts the flat rate of 5%, with the urban part rated either as the chart below or 6.5%.

IMT on other properties is on a sliding scale based on the value of the property:

Permanent Residence
Purchase Price (euros) % of Purchase Price
Up to €92,407 0
€92,407 – €126,403 2%
€126,403 – €172,348 5%
€172,348 – €287,213 7%
€287,213 – €574,323 8%
over €574,323 single flat rate of 6%
Non Permanent Occupation
Purchase Price (euros) % of Purchase Price
Up to €92,407 1%
€92,407 – €126,403 2%
€126,403 – €172,348 5%
€172,348 – €287,213 7%
€287,213 – €574,323 8%
over €574,323 single flat rate of 6%

These figures are not updates and will change 

Paying for your property

You may find it beneficial to open a Portuguese bank account to pay for the purchase of property, taxes, lawyers, etc. and utility bills, rates, etc. that you will need to pay when owning a property in Portugal.

In some cases it is possible to pay for a property with a mortgage, you can only mortgage properties which are habitable and have a licence for habitation, usually the land also needs to be registered as urban. There are many mortgages companies available and brokers such as Mortgage Direct.

There are a number of companies specialising in foreign currency exchange, especially for the purchase of property abroad, who often offer a much more favourable rate than banks such as Global Reach Currency Exchange.

Completion of Sale (Escritura Publica de Compra e Venda)

To complete, you (or the owner, or your/their lawyer) must make an appointment with the Notary. All parties involved in the purchase/sale must attend at the Notary’s office, unless you have granted someone power of attorney to act on your behalf (see below). If you don’t speak Portuguese you must have a translator present, and you must take with you all the relevant documents (your lawyer will normally organise this). You and the sellers will be read the Deed of Purchase and Sale (Escritura Publica de Compra e Venda) which you will then all sign. You must now pay the balance of the purchase price.

The property is now yours, but you still need to have the property registered in your name at the Conservatória do Registo Predial (the notary will usually arrange this for you). If the property is to be your main residence you will normally be able to claim the first 6 years free of rates (IMI), as long as you take up residence within the first six months after registering the property in your name.

Pure Portugal do not provide legal help or advice to anyone, neither do we accept payment or financially benefit from legal services. It is necessary that you always source your own lawyer/solicitor independently and ensure you find someone you are happy to work with.

Exemption from IMI (Annual Rates / Council Tax) (Isenção de Imposto Municipal sobre Imóveis)

First-time buyers may apply for exemption from paying IMI. The request should be made, within 60 days from the signing of the escritura, at the Finanças for the area where the property is located. Exemption is only granted on main residences (not on second homes or holiday homes). The period of acquisition is counted either from the date of acquisition (for a property which is not new) or emission of the municipal license of use (for a newly-built property).

Patrimonial Value Exemption in years
Up to 157,500 euros 8
157,500 – 236,000 euros 6 – 7