If you are looking to buy property in Portugal, then it’s important to understand how the process works. As well as what you’ll need to do in order to purchase real estate there. There are two legal systems in place in Portugal that dictate how properties can be bought and sold; namely the civil law and the common law systems, which work very differently. To find out everything you need to know about buying property in Portugal, keep reading this guide.
What you need to know about the Portuguese property market
The Portuguese property market is very attractive to foreign investors; especially those from the UK, due to its low prices and strong rental demand. The process of buying a property in Portugal is relatively straightforward, but there are a few things you need to be aware of.
First, you’ll need to get a NIF (Número de Identificação de Estrangeiro), which is basically your tax number as a foreigner. You’ll also need to open a bank account and have proof of funds before beginning the purchase process.
How much will I pay?
When looking at property for sale in Portugal, it’s important to be aware of the legal processes and required registrations. Also, property transaction costs, capital gains tax and other fees associated with buying property in Portugal.
Here are some of the costs you need to expect:
What you need to do before exchanging contracts
Before you exchange contracts, you need to have a lawyer look over the sale contract to make sure everything is in order. You also need to make sure that you have the money for the deposit ready. In Portugal, the deposit is usually 10% of the purchase price. Once you have exchanged contracts, you are legally obligated to buy the property.
You will also need to get a NIF number, which is a tax identification number for foreigners. To do this, you will need to go to the local police station with your passport and fill out a form.
Finally, you will need to open a bank account in Portugal in order to pay for the property.
The purchase contract
You will also need to pay a reservation fee; a reservation fee is paid when you make an offer on a property and is usually around 3% of the purchase price. This fee is non-refundable, so make sure you’re certain you want to buy the property before making an offer.
What happens on exchange of contracts
The buyer and seller are legally bound to the sale at this point and cannot back out. The deposit, usually 10% of the purchase price, is paid by the buyer to the seller or their lawyer. The balance of the purchase price is then paid on completion. For more on mortgages in Portugal, read Expatica’s blog ‘A buyer’s guide to mortgages in Portugal’
Finding a Law Specialist
If you need legal advice or assistance, be sure to contact the experts at RHJ Law. We’re able to guide you through what you need to know before moving to Portugal.
Our legal team at RHJ Law assists non-EEA nationals to obtain residency in Portugal. Our English speaking team of lawyers, accountants and more specialise in helping entrepreneurs and families to set up, manage and grow their life in Europe.
Working with our trusted partners; we can advise you on where to settle and how to go about purchasing property in Portugal.
We look forward to hearing from you soon!
