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Property buying process in Portugal

Portugal has one of the most regulated property and real estate industry`s in Europe with a requirement for official Estate Agencies to be Government Licensed. The whole process of buying or selling a property is recorded by lawyers and notaries, nevertheless, it is a very straightforward procedure.

When a property is selected as a potential purchase, an offer is made in writing, if accepted, a promissory… or pre… contract is prepared by the buyers lawyer, when both parties are in agreement with the conditions the contract is signed. Simultaneously a deposit of a minimum of 10% of the sale price is paid over to the seller, this deposit is non refundable once the contract is signed. As a deterrent to the seller not to gazump the intended purchaser, and or if the vendor chooses that the completion does not take place, a penalty of 100% of the deposit amount plus the deposit becomes payable.

A completion date is agreed and in the interim, an optional building survey and a property or company search is carried out, a bank survey may also be necessary if a mortgage is being arranged, once this is satisfactorily achieved the balance is paid and the keys are handed to the new owner.

See below a detailed description of the major steps of the property buying process for both Private and company owned properties:

Privately owned property

Exchange of contract

Once instructed, your lawyer will begin all the necessary legal searches on the property. These include ensuring the seller has clear title to sell and that there are no outstanding charges on the property. They will then prepare the Promissory Contract (Contrato Promessa de Compra e Venda) which is a legally binding contract between buyer and vendor and is signed by both parties in the presence of a notary/lawyer.

The Promissory Contract will state the buyer’s and the vendor’s details, as well as those of the property, the schedule of payments, completion date and any special terms agreed by both parties.

Upon signature, it is normal procedure for the buyer to pay the vendor a 10% deposit, usually via the lawyer’s client account. Under Portuguese law, if the vendor does not fulfill his contractual obligations, he is liable to refund the deposit in double to the buyer. If the buyer is in breach of contract, the deposit is non-refundable.


The Final Deed (Escritura) is the official deed of transfer of ownership from the vendor to the buyer. It will be signed on the agreed date at the notary’s office, either by you or by your lawyer if you have opted to give them power of attorney.

The balance of the purchase price is now paid, and the notary records the transaction in the official record. Once the deed and all other associated transactions are completed, you are then registered as the new owner by your lawyer in the Land Registry (Registo Predial). Buyers should have a copy of this registration.

Fiscal number

To purchase a property in Portugal you will need a Portuguese fiscal number. This fiscal number will be for you as a non-resident and therefore has no tax implications in Portugal. Your lawyer will normally advise and help to obtain one.

Company owned property

Exchange of contract

Many high-end properties are owned in a corporate structure. The property itself is an asset of the company and buyers purchase the company’s shares. These structures are usually domiciled in Malta or Delaware; however, there are several other white-listed jurisdictions around the world. If the property you choose is in one of these structures, your lawyer will carry out the normal legal searches on the property and undertake a due diligence on the corporate structure through a request to the management company that binds them in accordance to their regulations. This will clarify the fees, warranties, representation, history and legal procedures of the company.

A Share Purchase Agreement will then be prepared and, upon signature by both parties, all the conditions of the transaction are secured, and a usual 10% deposit will be paid to the vendor, via the lawyers’ clients’ account. This transaction takes place under the jurisdiction of the company’s domicile but can also take place under Portuguese or other jurisdiction connected with the parties, safeguarding the formalities applicable to the transfer of the shares/rights in the jurisdiction of the company’s domicile.


The process is simply completed by both parties fulfilling the terms described in the Share Purchase Agreement and the buyers transferring the balance of the purchase price to the vendors, again usually via the lawyers’ clients’ account. Afterwards, the respective management company will transfer the share ownership from vendor to purchaser. This process is quick, simple and in English.

Costs involved in the buying process

Legal expenses

Lawyers’ fees normally vary from 1% to 2% of the purchase price.

Private ownership

IMT & IS – Property Purchase Tax & Stamp Duty – This is the Portuguese Property Transfer Tax which is payable by the purchaser prior to completion. The rate is variable and is based on a sliding scale according to the price of the property, up to 6% on residential properties and 6.5% on other properties, including plots of land for construction.

The stamp duty is a flat rate of 0.8% of the property price. Your lawyer will always advise you of these costs at an early stage. The transfer tax, stamp duty and registration fees are payable by the purchaser upon signature of the deeds at the public notary and at the Land Registry, when the transfer of property ownership is registered.

Corporate ownership

In the case of a share transfer process, the IMT, notary, stamp duty and registration fees are not applicable. The cost to register the new beneficial owner is from GBP 1,000 to 1,500 payable to the management company.

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