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Tax info

Here you will find the basic Steps to help you understand the legal acts and procedures that are involved in acquiring a property in Portugal.(It is highly recommended in any purchase, that you are advised only by competent and reputable people who are fluent in a language you understand).

Only Government Licensed Estate Agent should be used.

It is a normal procedure at the beginning of the transaction when the buyer agrees to buy and the seller agrees to sell, to enter into a Promissory Contract ( Contracto Promessa de compra e Venda), detailing the conditions of the Sale.

This contract is then legalised by registering it in the Notary Office.( Similar to the U.K. Notary Office)

The contract is legally binding on both buyer and seller; if the buyer defaults he forfeits the deposit, if the seller defaults he has to pay the buyer double the amount.(Unless agreed in advance in the contract)

According to the conditions of the contract at this stage you will have to pay the seller a deposit, which the amount will be previous, agreed. (The Deposit usually is 10% of the full purchase price)

It is advised and convenient for the buyer to ask a third party who he trusts and speaks the language to act for them in the matter. A document called "Power of Attorney" is prepared with the necessary details and registered in the Notary. This can also be implemented in Portuguese Consul in a foreign country or by your local Notary after which translation into the Portuguese language can be done.

All the buyers are required to obtain from the Tax Office (Finanças), a fiscal number (Número de Contribuiente) N.I.P. for individuals or N.I.P.C. for companies.

Prior to act of completion, the purchase may be subject to a payment I.M.T.(to the Tax Office) Depending upon the nature of the purchase the amount can vary. In the case of residential properties."Tabela de I.M.T."

Resident

Values to calculate the IMT % to apply Ammount to deduct
Under € 92.407,00 1%      € 00,00
From   € 92.407,00 to € 126.403,00 2%  € 1.848,14
From € 126.403,00 to € 172.348,00 5%  € 5.640,23
From € 172.348,00 to € 287.213,00 7%  € 9.087,19
From € 287.213,00 to € 550.836,00 8% € 11.959,32
Over 550,836.00 6%       € 00,00

Non-Resident

Values to calculate the IMT % to apply Ammount to deduct
Under € 92.407,00 1%      € 00,00
From   € 92.407,00 to € 126.403,00 2%     € 924,07
From € 126.403,00 to € 172.348,00 5%  € 4.716,16
From € 172.348,00 to € 287.213,00 7%  € 8.163,12
From € 287.213,00 to € 550.836,00 8% € 11.035,25
Over 550,836.00 6%       € 00,00

An example:
Suppose a property for a non-resident that cost € 180.000,00 multiply this figure by
7, 00% = € 12.600,00 then deduct € 8.163,12 the total tax to be paid is € 4.436,88

There is a flat rate of 5% on rustic properties and 6,5% on building plots, Shops and Garages.


When all the above requirements have been completed the sale can proceed with the act known as "Escritura de Compra e Venda" which takes place in front of the selected Notary and is recorded in his official books. It is at this time that the balance of purchase has to be made according to the signed Contract. The Notary Office then issues normally a few days later a photocopy of the entry of this act which should not be mistaken for a "Title Deed" as known in the UK.
The deeds should be signed by the buyer and seller or their legal representative having a Power of Attorney to either buy or sell. If a foreigner wants to sign himself, the Notary will insist on a translator to be present.

On proof of the above act the property in question is then registered in the Land Registry (Conservatória do Registo Predial), in the new owners name. It is strongly recommended that this registration is made immediately as a preventative measure against possible financial abuse by the previous owner.
Also you should change the property again into your name in the tax department and all utilities like water, telephone, electricity have to be altered into the name of the new owner.
Additional costs for the buyer
On top of the local taxes I.M.T. as mentioned above one should take allow for the following additional costs.

    * Notary fees Approx. 1 %of the value mentioned in the Deed
    * Registration fees Approx. € 250
    * Legal fees usually are 1% of the property value, this depending on the complexity of the case
    * Changing utilities depending but somewhere between € 150,00 and € 250,00

Our Lawyers Services and Fees

    * Our Lawyers Legal fees is 1% ( this includes) First meeting
    * The issue of the Document "Power of Attorney"
    * Checking all the documents and certifying that every document is in legal order
    * Draw up the Promissory Contract
    * In case of Credit, dealing with all the documentation necessary
    * The Schedule and attending to the deed
    * All the necessary declaration and forms to the tax department
    * All the necessary documents to the land Register Department
    * All utilities ,like water, telephone, electricity will be altered into your name

(All the legal expenses are not included)

 
































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