The followings steps encompass everything from reviewing offers to finalizing the purchase agreement, handling taxes, ensuring appropriate insurance coverage, and following specific procedures diligently. The entire process can be taken care of your legal representative which is one of the first steps we strongly recommend.
Obtain a tax identification number
In order to purchase a home in Portugal, it is necessary to obtain a Tax Identification Number (TIN). This unique number, which serves as a tax and customs identifier, can be easily obtained by citizens at their convenience. Having a TIN ensures seamless compliance with tax obligations related to property transactions, whether buying or selling a property.
Verify that property documents are in order
To initiate the property purchase process, it is crucial to verify the accuracy of all legal documents. The following documentation (depending on the specifics of the property, others may have to be verified) should be carefully checked:
• Property Description Document: Provided by the Tax and Customs Authority, this document outlines essential property details.
• Abstract of Title or Title Search: Issued by the Property Registry, this document contains information regarding property location, composition, and ownership.
• Use Licence or equivalent document such as proof of payment of municipal fees: Issued by the Municipal Authority, this document confirms property's use is in legal compliance status.
• Energy Certificate: Provided by the National Energy Agency, this certificate indicates the property's energy efficiency rating.
• Building Data Sheet (if applicable): This document outlines key technical and functional property characteristics.
• Declaration of Non-Debt to the Condominium (if applicable): Ensures there are no outstanding condominium-related debts.
Checking and ensuring the accuracy of these documents is a crucial step in the property buying process to guarantee a smooth and legally compliant transaction.
Promissory Contract
When purchasing a property, you may choose to sign an offer to purchase agreement, although it is not mandatory. This document, duly authenticated by both the seller and buyer, outlines the rights and obligations of the parties involved. Here are the essential details that should be included:
1. Personal Information:
Full name
Civil status
Civil identification number
Tax identification number
Address
2. Property Details:
Description of the property
3. Liens and Encumbrances:
Information about any existing liens or encumbrances on the property.
4. Financial Terms:
Purchase price
Sale terms
Form of payment
Deposit amount
5. Contract Timeline:
Maximum time limit for finalizing the contract
6. Penalties:
Details regarding penalties in case of non-compliance with the offer to purchase agreement.
Insurance
When purchasing a property, it’s essential to arrange insurance coverage to protect against risks such as fire, flooding, theft, and other damages. Additionally, you might need coverage for common areas in adjoining properties, which could be included in your monthly condominium payment.
If you’re financing the property with a mortgage, financial institutions typically mandate life insurance and multi-risk insurance. The property serves as collateral for the loan.
When selecting insurance, consider the following factors:
• Coverage: Ensure the policy adequately covers the specified risks.
• Exclusions: Be aware of any situations or events not covered by the policy.
• Excesses: Understand any deductible amounts you’ll be responsible for.
• Insured Capital: Determine the total amount insured for the property.
• Premium: Consider the cost of the insurance premium.
Finalise the deed of the purchase - documents needed
When finalizing the property deed, you’ll sign a contract that formally establishes you as the legal owner. This can be done through a Notary Office or Lawyer.
The necessary documentation include:
Civil and Tax Identification Documents (for all parties involved)
Abstract of Title - Description sand annotations in effect
Urban Property Description Document (Model I of IMI) issued by the Tax and Customs Authority.
Use Licence (for post-August 1951 buildings) or equivalent document such as proof of payment of municipal fees:
Building Data Sheet (if use licence issued after 30 March 2004)
Infrastructure Certificate (for certain property types)
Energy and Indoor Air Quality Certificate:
IMT & Stamp Duty proof of Payment
Declarations (Exercising the Right of Preference (if applicable))
Toponymic Certificate (if applicable)
Statement of Outstanding Loan Amounts (if any)
Promissory Agreement
Declaration of IMI (Municipal Property Tax) Payment
Declaration of Non-Debt tothe Condominium (if applicable)
Taxes payable
Stamp duty on the transaction: 0.8%
Stamp duty on the loan (if any and above EUR 5 000): 0.6%
Registration of the deed, to be carried out by a lawyer: c.c €1000
Payment of IMT - up to 7,5%
After signing the public deed, it’s essential to register the purchase at the Property Registry and update the property register at the Tax and Customs Authority.
The information contained on this website is for information purposes only and does not constitute legal advice. The information contained herein, and all opinions expressed are provided in a general and abstract manner and do not contain an exhaustive analysis of all aspects of the legal frameworks to which it refers. The content of these publications refers to the date of their publication and should not serve as a basis for any decision without prior specialized legal advice. For more information, please contact us at info@arre.pt.
