Buyers check list

If you’re a foreigner looking to buy a property in Portugal, you must be well-prepared and informed about the process. Here’s a comprehensive checklist to guide you through each step of purchasing a property in Portugal.

1. Research and Initial Considerations

• Location: Identify the region or city where you want to buy. Consider factors like climate, amenities, proximity to airports, and lifestyle.

• Budget: Determine your budget, including property price, taxes, legal fees, and other costs

• Market Research: Study the local property market trends, prices, and potential growth areas.

• Mortgage Eligibility: Check your eligibility for a mortgage as a non-resident. Some Portuguese banks offer mortgages to expats.

1. Engage Professionals

• Real Estate Agent: Hire a reputable agent (Engel & Völkers) who understands the local market and can assist with property viewings, negotiations, and paperwork. In Portugal there are many realtors / agents, majority of these have no formal qualifications as this is not a requirement in Portugal. Therefore, it is always best to go with a reputable company like Engel & Völkers where we ensure the right level of professionalism.

• Lawyer: Engage a lawyer experienced in Portuguese real estate law to help with legal matters, contracts and due diligence. This is a must for foreigners as the risks are just too high mainly due to language and interpretation of the local legislation. 

• Tax Advisor: Consult a tax advisor to understand the tax implications of owning property in Portugal. This is not a must, and most general information can be obtained from the internet. The bigger issue is when you want to sell the property and capital gains tax come into play. 

• Engel & Völkers role: E&V can help you obtain the required documents through our network of lawyers and advisors, when financing is required, we can also arrange with the financial institutions of service providers.

1. Obtain a NIF ( Número de Identificação Fiscal)   

• What it is : A NIF is a Portuguese tax identification number required for any financial transactions in Portugal.

• How to get it : Apply for a NIF at a local tax office or through a lawyer. You’ll need your passport and proof of address.

1. Property Search and Viewing

• Property Viewings: Schedule viewings and inspect properties, again make use of reputable agencies.

• Offers: Once you find a property, make an offer. Negotiation is common, so be prepared to negotiate the price. Consider hiring a surveyor for a thorough inspection once you have decided on the right property for you.

• Reservation agreement: In many cases you could be expected to enter into a reservation agreement, the benefit of this agreement is that the property is taken of the market.

1. Legal Due Diligence 

• Title Deed (Certidão Permanente de Registo Predial) : Ensure the property has a clear title, free from debts or liens.

• Land Registry ( Registo Predial) : Verify the property is correctly registered with all details accurate.

• Planning Permissions: Check that the property complies with local planning regulations and has the necessary permits. 

• Utility Debts: Confirm there are no outstanding utility bills or community fees.

1. Promissory Contract ( Contrato de Promessa de Compra e Venda)

• What it is : A legally binding contract outlining the terms of the sale, signed by both parties. The CPCV is mostly drawn up by the respective lawyers involved in the mediation process.

• Deposit: Typically, a deposit of 10-30% of the purchase price is paid at this stage.

• Conditions: Ensure all conditions (e.g., mortgage approval, property repairs) are clearly stated in the contract.

1. Mortgage ( if applicable)

• Apply for Mortgage: If needed, apply for a mortgage with a Portuguese bank. Provide necessary documentation like proof of income, NIF, and property details.

• Mortgage Approval: Once approved, the bank will issue a mortgage offer. Review the terms carefully with your lawyer.

1. Final Deed ( Escritura)

• What it is: The final contract transferring ownership of the property.

• Sign the Deed: Signed in the presence of a notary. Both buyer and seller ( or their legal representatives) must be present.

• Payment: The remaining balance of the purchase price is paid at this stage and the keys to the property is handed over.

1. Registration

• Land Registry (Registo Predial) : Register the property in your name at the Local Land Registry Office

• Tax Office : Update the tax office with the new ownership details.

1.  Post Purchase: 

• Property Taxes: Pay the applicable property taxes, such as IMT (Property Transfer Tax) and IMI (Municipal Property Tax.) IMT tax is due on the day of the deed, normally handled by the lawyer and notary.

• Utility Transfer: Transfer utility accounts ( water, electricity, gas) to your name. The lawyers we work with normally include this in their fixed fee package.

• Insurance: Arrange property insurance to protect your investment.

1.  Residency Considerations ( if applicable)

• Residency Permit: Apply for a residency permit if you plan to stay long-term. Most popular now is the D7 visa.

       Required Documents

• Valid Passport

• NIF (Tax Identification Number)

• Proof of Income (for mortgage application)

• Bank Statements

• Preliminary Contract

• Final Deed (Escritura)

• Proof Address

• Tax Receipts: Proof of payment for IMT and Stamp Duty.

This checklist should help you navigate through the process of buying property in Portugal as an expat. Engel & Völkers are here to assist you every step of the way, ensuring a smooth and successful property purchase experience.