Home Property in Portugal
How to buy a house in Portugal?
Here you will find the detailed information about real estate purchasing in Portugal:
- the right way to choose the property and to effect the deal;
- property taxes and duties that should be paid;
- everything about home loans in Portugal;
- home property management and renting;
- rental, commercial properties and related investment properties.
Real estate for sale
Most recent offers from house owners in Portugal and from real estate agencies. Advertisements with the fixed price and auctions are listed here.
You can leave a comment and give advice to other visitors planning to buy a home in Portugal.
Portuguese real estate market slowly overcomes consequences of the crisis. Property prices have recently fallen 20–30 %, and are reluctant to grow. Premium property segment has undergone crisis more steadily, but even here prices have fallen 15–20 %. In summer 2013, Portuguese economy started recovering from the crisis, and real estate prices increased slightly for the first time in three years.
Real estate in Portugal is the cheapest all around Western Europe. Such situation is determined not only by drop of prices during the crisis, but also by availability of bank property, as well as many small apartments in large cities’ suburbs.
Prices for real estate in Portugal
The average price for residential property in Portugal was around €1014 per sq. m., as of 2013. Purchasing a house is usually a bit cheaper (€948 per sq. m.), than an apartment (€1051 per sq. m.). It should be noted that property in the “internal” northeastern regions with no access to the ocean is also remarkably cheaper, than the average level.
Another region with affordable property is located in the north-west, next to the city of Porto. Prices in the “internal” southwestern provinces, neighboring with Spain, also remain below average level. On the other hand, property in coastal southwestern regions (Lisbon and southward) is 20–30 % higher than average level across the country.
Real estate acquisition in Portugal is available for everyone. In addition, Portuguese government has recently introduced a law facilitating the process of purchasing a residence permit. Now the only requirement is to purchase Portuguese property for €500 000 or more. Let’s figure out how to purchase property in Portugal.
Imagine that you’ve already found a piece of real estate you’d like to buy. What are your steps? First of all, it is necessary to get a personal tax reference number (Número Fiscal de Contribuinte), and open an account in one of Portuguese banks. Without it, you won’t be able to carry out any real estate transactions in Portugal. Then, you should find a lawyer and start negotiating property price and transaction terms with the owner. Keep in mind, that all legalities are prepared by a lawyer, so you need to be very attentive in selecting a legal firm.
During the next step, seller and buyer sign a preliminary sale and purchase agreement. It should contain information on legal obligations of parties, property condition, and terms of payment. The agreement should be drafted and signed in the presence of a notary. Upon signing a preliminary agreement, buyer should pay a deposit of 10–20 % of the object value. If buyer decides to cancel the deal, seller has a right to keep the deposit. However, if it’s the seller, who decides to cancel a deal, he or she will have to pay back double amount of the deposit.
As soon as both parties sign a preliminary agreement, a lawyer has to collect and check all the documents necessary for the main transaction. This process may take up to several months. Also, it is necessary to pay both transfer tax and stamp duty before signing the principal agreement. This document should be signed at the notary office. It should be composed in Portuguese; therefore, the buyer may need translator’s assistance. At this stage, buyer pays the remaining amount, and property registration is performed. This process includes registration of the new owner in the national cadastral register (Conservatoria do Registo Predial). After that, new owner obtains full control over the acquired property.
Real estate acquisition in Portugal is imposed by the following taxes:
- stamp duty – 0.8 % of the object value;
- transfer tax (Imposto Municipal Sobre Transmissão Onerosa de Imóveis, IMT) – may vary from 0 % to 8 %, depending on property price, type and location. For example, having purchased a house for €110 000, a buyer should pay a 2 % tax (€2200) minus €900. Thus, the total amount is €1300;
- fixed IMT tax for property purchase in Portugal – 5 %;
- real estate agency fee – 3–5 % of the object value;
- lawyer fee (the same as notary fee) –usually 1 % of the object value;
- personal tax reference number registration – €3.5. archived version