Once your team is in place, you’re ready to dip deeper into the property purchasing process. By this point, you should know that you can trust your team to: 1) show you properties that match your interest, 2) communicate with a focus on providing service attuned to your needs, and 3) be prepared to properly walk you through the entire buying process.
Part of our recommendation is to visit Portugal prior to any purchasing decision. Feeling the city (or town), noting development and infrastructural components, and determine the best property matches for your investment needs should be front and centre in your decision-making process. Once you’ve done that and determined a property in a location and price suitable to you, the next step is making it official.
All documents need to be reviewed by an attorney to ensure they match the Portuguese Immigration Department (SEF) specifications concerning property purchase for golden visa purposes. Once a property matches those specifications, a promissory sales contract, or Contrato de Promessa de Compra e Venda is prepared. Once the purchase price and payment terms are negotiated, an initial deposit of 30% of the purchase price is transferred from buyer to seller. Typically, these promissory contracts allow for an instalment process of payment; however, terms can be modified due to the needs of the buyer. When all terms of the contract are completed, the parties move toward the final act of sale, or Escritura Publica de Compra e Vende. In this, the buyer receives the keys and the property is registered in the Land Registry. The sale is complete!
Following the sale, the buyer will be responsible to Finanças, or the local tax office, for IMT (Property Transfer Tax) based on the purchase price (or assessed value, whichever is higher). Tax rates for IMT typically range from 2% to 6% of the property value. Further, an Imposto de Selo, or Stamp Duty, of 0.8% of the purchase price will be due to the local tax authorities prior to the final act of sale. Notary fees and Registo Predial(Land Registry) fees are additional fees included in the process.
If the intention of the purchaser is to rent the property, either short-term or long-term, it is better to legally register the property as an Alojamento Local, or ‘local accommodation’. Registration will allow you all the legal benefits of renting for profit. Your real estate team can help you register with the local authorities, and, following registration, inspection and payment of any and all fees, your property will be registered as an Alojamento Local.
Please note that, should you require a legal representative to complete the sale for you, a Power of Attorney, or Procuração, needs to be completed, granting specific power to that representative to complete the sale on your behalf.
The process itself is rather straight-forward, but it helps to have an experienced team in place to manage any possible hiccups that may interrupt the process. As always, expect minor delays and inconveniences arising from bureaucratic requirements. Otherwise, enjoy the process!