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With the resurgence in demand within central Portugal for properties from buyers all over Europe, there has been an increase in unlicensed estate agents jumping on the bandwagon. This license is granted by the State governing body, INCI, and requires a qualification on the part of the Estate Agent before they are issued with their AMI No. It serves as a guarantee that individual Estate Agents must use certain forms of approved documentation to implement their functions in the profession.
The Licensed Estate Agent is also bonded by INCI in the form of an Insurance Cover that enables claims to be made against them in the case of any proven dispute. Once you have made a decision to purchase a property in Central Portugal, it is advisable to find a lawyer (Advogado) or solicitor (solicitadora) who you wish to deal with your purchase, of which there are many who speak English.
It is also essential that a fiscal number (numero de identificação fiscal/NIF) is obtained, this Cartão de Contribuinte is available from the local tax office (finanças). It is also necessary to have your Fiscal number to open a bank account in Portugal, for which you will also copies of your birth certificate and passport. Having decided on your purchase and put the above into place, it is then that all the official paperwork starts.
This is however something not to be daunted by and all of us here at Properties in Perfect Portugal will endeavour to make this process as straight-forward as possible. The following pages give you an outline of the due process necessary to complete all paperwork required under Portuguese law.
Once you have decided upon your purchase it is normal for a deposit of between 10% and 20% to be left and a Promissory Contract (contrato de promessa de compra e venda) signed. This is a legally binding contract between buyer and seller, prepared by a lawyer, and needs to be signed on licensed premises or in front of a notary. Upon request the contracts will be produced in English and Portuguese.
The Promissory Contract includes;
• The identification of both parties. • The identification of the property, its registration number and Tax number. • Confirmation of clear title. • The price agreed. • The deposit amount. • The date of deadline for signing the Final Deed (Escitura). • Use of property in the interim period if required. Once the Promissory Contract has been signed and deposit paid should the seller default he/she is required by law to repay twice the deposit amount to the buyer.
The signing of the Escitura and handing over of funds not the last job or cost before title of deed is actually passed over. Once you have signed the Notary will issue you with a stamped copy of the Escitura (it is advisable to get more than one copy at this stage). The copy will carry the seal of the Notary but should not be mistaken for a Title Deed. The property then needs to be registered on the Land Registry (Conservatoria do Registo Predial), for which there is a charge. This can also take some time to complete and be returned but under Portuguese Law you are not the legal owner of a property until the Escitura has been registered at the land registry.
Other tasks to be completed at this stage are registering with the tax office (reparticão de finanças) and all the utilities companies such as electricity (EDP), water, gas (Galp Energia) and telephone (Portugal telecom). To register all of the above you will need your tax number (Numero Fiscal de Contribuinte or NIF) obtained from the local Tax Office (Direcção-Geral dos Impostos).
Different rates apply for urban and rustic properties. If the value of the property purchased is below
€85,500 IMT is not payable on rustic properties. Rustic properties and Agricultural lands are there after
taxed at a flat rate of 5%.
Commercial property or land for construction is charged at flat rate of 6.5%
Offshore companies pay 15%
IMT Property Transfer Tax 2007
The Portuguese Notary fee is normally around 1% which also covers stamp duty. The Legal fees depend on the loan amount and purchase price. From €500.
With all these in place the Escitura can then be signed by both parties in the presence of the Notary and balance of monies exchanged. Although most people like to be present at this time, it is possible to give Power of Attorney (Procuração) to sign on your behalf. The Notary will also make sure that all taxes pertaining to the property will also be paid at this stage.
