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Purchasing process

What are the procedures for buying a property in Portugal?

Now that you have found your perfect property in Portugal, it is time to start the legal process of purchase. This is a very simple and transparent process. We can refer you to a lawyer or solicitor who speaks your language.
The first step is signing of ‘PROMISSORY CONTRACT’. This contract identifies the buyer and seller, describes the property and sets out the agreed terms such as price and payment conditions. Normally, as agreed, a deposit of 10% of the purchase price is paid on signing this contract. This is a legally binding contract which means that the seller cannot change the price or conditions of the agreement, nor sell the property to a third party. It also means that if you do not fulfil your part of the agreement you will most likely lose your deposit. Your Lawyer can arrange for this contract to be translated into your own language.
The next step is arranging to pay the property purchase tax. This tax is payable on the purchase of any immovable object. This means that furnishings and fittings are not subject to taxation. This tax has to be paid prior to signing the deed, which usually takes place one month after signing the promissory contract. The amount of tax payable depends on the value of the property purchased and its intended use. There are two tax bands, one for permanent habitation and the other for second or holiday homes.


 Up to €92.407  0%  € 0
 € 92.407 to €126.403  2%  € 1.848,14
 €126.403 to €172.348  5%  € 5.640,23
 €172.348 to €287.213  7%  € 9.087,19
 €287.213 to €574.323  8%  €11.959,32
 Greater than €574.323  6%  --
 Plots and businesses  6.5%  --
 Garages  6.5%  --
 Agricultural plots  5%  --



 Up to €92.407  1%  € 0
 €92.407 to €126.403  2%  € 924,07
 €126.403 to €172.348  5%  € 4.716,16
 €172.348 to €287.213  7%  € 8.163,12
 €287.213 to €550.836  8%  €11.035,25
 Greater than €550.836  6%  --
 Plots and businesses  6.5%  --
 Garages  6.5%  --


For exemple, for the purchase of a furnished holiday apartment of €150,000.00 of which €10,000.00 was the value of the furniture and fittings, the tax would be €140,000.00 x 5% less €4,716.22 which equals €2,283.78. In addition to this tax, there is stamp duty which currently has a value of 0.008%, as well as the deed and the registers in your name. For any particular property we can tell you the amount of purchase tax payable.
The final step is signing the deed. This is when the title of the property is passed to you. It is also when the remainder of the purchase price is paid to the seller. Signing takes place in the office of the Notary. It is the job of the Notary to confirm the identities of the parties, to ensure that the seller has the legal right to sell the property and that there are no charges or encumbrances on it. The deed has to be read out loud in Portuguese, but your lawyer can arrange a translator to be there with you. Once the deed is signed, congratulations, the property is yours.
Afterwards, the purchase has to be registered in your name at the land registry, and services such as electricity and water need to be transferred. With the help of your lawyer, we can organize it all for you, leaving you free to enjoy your home in Portugal.
This is a very brief guide and is purely informational. We are always happy to talk in more detail about any specific property, for that just call us, contact us through our office or internet and see us.
The Avenida Propriedades team.