Navigating the Final Steps: Closing the Sale of Your Property in Portugal

Selling property can be a complex process, and when it comes to closing the sale, the final steps are critical to ensure everything goes smoothly. If you’re a European seller with property in Portugal, understanding these last stages will help you finalize the deal with confidence and avoid any potential pitfalls. In this blog, we’ll walk you through the essential steps to successfully close the sale of your property in Portugal.

1. Reviewing the Purchase and Sale Agreement (CPCV)

What It Is: The Purchase and Sale Agreement, known in Portugal as the Contrato de Promessa de Compra e Venda (CPCV), is a legally binding contract between you and the buyer. This agreement outlines the terms and conditions of the sale, including the purchase price, payment schedule, and any contingencies.

Key Points to Consider:

• Accuracy of Details: Ensure that all the details in the agreement, such as the property description, price, and deadlines, are accurate and agreed upon.
• Deposit: Typically, the buyer pays a deposit (usually 10-30% of the purchase price) when the CPCV is signed. This deposit is non-refundable if the buyer pulls out of the deal, offering you some security.

Tip: It’s advisable to have a Portuguese solicitor review the CPCV to ensure your interests are protected and that the contract complies with local laws.

2. Final Property Inspection

Why It Matters: Before the sale is finalized, the buyer will likely conduct a final inspection of the property to ensure it is in the agreed-upon condition. This step is crucial, as it can influence the final closing process.

What to Expect:

• Repairs and Maintenance: If the inspection reveals issues that were previously agreed to be fixed, you may need to address these before closing.
• Inventory Check: If the sale includes furnishings or appliances, an inventory check may be conducted to confirm everything is present and in working order.

Tip: Make sure the property is clean and all agreed repairs or improvements are completed before the final inspection to avoid delays in closing.

3. Paying Off Outstanding Debts and Taxes

Why It Matters: Before you can transfer ownership of the property, all outstanding debts related to the property must be settled. This includes any mortgages, property taxes, and utility bills.

Steps to Take:

• Mortgage Settlement: If you have an existing mortgage on the property, arrange to pay it off with the funds from the sale. The bank will issue a cancellation certificate, which is necessary for the closing process.
• Property Taxes: Ensure that all municipal property taxes (IMI) and other related taxes are up to date.
• Utility Bills: Settle any outstanding utility bills (electricity, water, gas) to prevent complications during the transfer of ownership.

Tip: Obtain and keep receipts or confirmation of all payments to present during the closing, ensuring there are no last-minute surprises.

4. The Notary Meeting: Signing the Deed of Sale

Why It Matters: In Portugal, the final step of closing the sale occurs at a notary’s office, where both you and the buyer (or your respective legal representatives) will sign the deed of sale (Escritura). This is the official document that transfers ownership of the property from you to the buyer.

What Happens:

• Presentation of Documents: Both parties will need to present identification and the relevant documents, including the CPCV, mortgage cancellation certificate (if applicable), and proof of payment of all taxes and fees.
• Signing the Deed: Once the notary has reviewed the documents and confirmed that everything is in order, both parties will sign the deed of sale. The buyer will then pay the remaining balance of the purchase price.

Tip: Make sure your solicitor or legal representative is present at the notary meeting to guide you through the process and ensure everything is executed correctly.

5. Transferring Ownership and Final Payments

Why It Matters: After the deed of sale is signed, the notary will register the transaction with the Land Registry (Conservatória do Registo Predial), officially transferring ownership to the buyer. This step is essential to finalize the sale and receive your funds.

What to Expect:

• Payment: The buyer will transfer the remaining funds to your account, usually on the same day as the signing. Ensure that the payment method is agreed upon in advance to avoid any issues.
• Transfer of Keys: Once the payment is confirmed and the deed is signed, you will hand over the keys to the new owner, marking the official transfer of the property.

Tip: Double-check with your bank to confirm the receipt of funds before handing over the keys to ensure that the payment has been processed successfully.

6. Finalizing Legal and Financial Matters

Why It Matters: Even after the sale is completed, there are a few remaining legal and financial matters to address to fully close the chapter on your property sale.

Steps to Take:

• Informing the Tax Authorities: Notify the Portuguese tax authorities of the sale to ensure that your tax records are updated. This is particularly important if you are a non-resident, as you may need to declare any capital gains tax.
• Canceling Utilities and Services: Contact utility providers to cancel or transfer services to the new owner. This includes water, electricity, gas, and any other subscriptions related to the property.

Tip: Keep copies of all documents related to the sale for your records, including the deed, proof of payment, and any tax declarations, in case they are needed for future reference.

Conclusion

Closing the sale of your property in Portugal involves several critical steps, from signing the Purchase and Sale Agreement to transferring ownership and finalizing legal matters. By understanding each stage of the process and being well-prepared, you can navigate these final steps smoothly and ensure a successful sale. Whether you’re working with a solicitor or handling the details yourself, staying informed and proactive will help you achieve the best possible outcome.

‍