THE PURCHASE PROCESS
Once you’ve found the property you want to purchase and your broker has successfully negotiated the sale on your behalf, your real estate agent might want to prepare a letter of intent. This document should include all agreed details, such as the price, date of Promissory Contract, Final Deeds etc. At the same time, we recommend that you instruct a local lawyer to represent you.
- Contract a broker
- Prepare a letter of intent
- Instruct a lawyer to represent you
PURCHASE OF A PROPERTY IN PRIVATE OWNERSHIP
As soon as he is assigned by you, your lawyer will begin the necessary legal searches for the property. He ensures that the seller has a clear right of sale and that the property is debt free.
CONTRATO PROMESSA DE COMPRA E VENDA – PROMISSORY CONTRACT
Once the search has been completed, a preliminary contract will be drawn up (Contrato Promessa de Compra e Venda). This is a legally binding contract between buyer and seller, signed by both in the presence of a lawyer or notary. The preliminary contract contains the essential information about buyers, sellers, the property, the payment plan, a possible Completion date as well as all special agreements of both parties.
At the time of signing it is customary for the buyer to pay the seller a deposit of 10% over the total price. This payment is usually made through the attorney’s client account.
PORTUGUESE TAX NUMBER – NUMERO CONTRIBUINTE
To purchase a property in Portugal, you need a Portuguese tax number (Numero Contribuinte). This tax code is non-resident for you and therefore has no tax implications in Portugal. Normally, your lawyer is happy to help you to apply for a tax number.
Caution: Under Portuguese law, the seller is obliged to repay the deposit in duplicate to the buyer if he fails to meet his contractual obligations. In case of breach of contract by the buyer, the deposit will not be refunded.
ESCRITURA – OWNERSHIP TRANSFER
The Final Certificate (Escritura) is the official document of ownership transfer from the seller to the buyer. This will be signed by the notary on the agreed date, either in person or by your lawyer, if you give him a power of attorney.
The balance of the purchase price is now payable and the notary records the transaction in the official record. Once the certificate and all other related transactions have been completed, your attorney will register you as a new owner in the Land Registry (Registo Predial). Buyers should receive a copy of this certificate approximately four weeks after Escritura.
- Lawyer undertakes legal searches
- Lawyer draws up Promissory contract
- Obtain a Portuguese tax number
- Contract is signed & notarized
- Buyer pays the seller a 10% deposit
- Lawyer performs all necessary legal searches for the property
- Escritura is signed & notarized
- Balance of purchase is paid
- Notary records transaction
- Certificate issued
- Ownership registered with Land Registry