| The Traditional Buying Process
Identify Your Price Range
The Conveyancing Process
Guidelines for Stage Payments
Identify Your Price Range
Before your start searching for a property, it is very important to establish what your budget is and how you are going to finance the purchase. This way, you will be able to refine your search to the properties available within your price range saving a lot of time and effort along the way.
Real Mansão has protocols with various banking institutions for financing property purchases. To speed up the process, having obtained all the necessary details from you, we can put forward proposals to these banks on your behalf and find out what level of funding may be available to you, along with their terms and interest rates, etc., so that you can make your choice (see Financing your property) .
The Conveyancing Process
If you follow the traditional buying process, as you would do for a property purchase in your home country, it is essential to have a local lawyer to act on your behalf, as any conflicts arising will be dealt with under Portuguese law. We can give you some recommendations. It is normal practice for foreigners to sign a Power of Attorney to their lawyer which allows them to undertake all the processes on behalf of the purchaser.
It will be also necessary to obtain from the local Tax Office a fiscal number (“Numero Contribuinte” - this is a tax identification number, which can be obtained on your behalf by your lawyer.
Once you have identified the property you wish to buy, the next step is to sign a purchase agreement, which for security reasons and for the Agent is an important document that proves you are willing to purchase that property for that price and shows the Vendor a purchase offer. If the Vendor agrees with the proposal, the next step is to pass all the property documentation to your legal representative to verify the legal status of the property and check that the required documentation is in order, such as the title deeds, Habitation Licence, Technical Handbook (as appropriate), official tax documents etc.
A Promissory Contract is drawn up which details the following:
- Full identification of the two parties;
- Dull description of the property: if a new property, this should include plans, specification of materials, a plan of the site and building permission. For a resale property, it should
show the number under which it is registered in the Land Registry;
- Purchase price and schedule of payments (see note below);
- Completion date;
- Any other conditions agreed between the purchaser and vendor.
On signature of this contract, a deposit between 10% and 30% is payable to the vendor, with 90% or 70% on completion. This is non-refundable if the buyer pulls out, but should the Vendor decide not to go ahead, he is required by law to pay double the deposit to the purchaser.
With all contract conditions in order, a date for signature of the deed is booked with the Notary's office (Notário) and all the relevant paperwork is passed to them. The seller must have all the taxes relating to the property in order, otherwise it will not be possible to pay the transfer tax (formerly SISA, now known as IMT). When the paperwork is found to be in order, the final deed can be drawn up, which is then signed by both parties and witnessed by the Public Notary. Any errors or omissions in the documentation must be corrected before the Notary will allow the deed to be signed.
A certified copy of the deed (escritura) is given to the purchaser, which must then be registered at the Land Registry (Conservatória do Registo Predial) within 30 days of signing and the local tax office (Repartição de Finanças).
Tax, Land Registry and Notarial fees are payable on completion.
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Guidelines for Stage Payments:
Resale properties:
- 10% or 30% on Promissory Contract
- 90% or 70% on signature of Deed (Escritura)
New build properties:
On new builds, stage payments are generally as follows:
- 30% on signature of contract
- 30%
- 30%
- 10% on completion
(This is a guideline only, as stage payments are generally agreed individually with the developer according to the stages of construction.)
On a new build property, the developer must issue a ten-year guarantee and a Habitation Licence from the Town Hall (Câmara Municipal), which certifies that the property meets the required conditions for habitation. |
