Jorge Apolo Lda.
The process of buying a property in Portugal is not complicated, you always have experienced professionals on your side to guide you and advice on the steps to be taken.
After having chosen the property of your dreams, first thing we recommend is hiring a lawyer that will deal with all the paperwork throughout the buying process (lawyers usually charge 1% to 2% of the purchase price for their services). We also advise you to get a surveyor to make sure the property does not have any structural problems.
In order to be able to buy property in Portugal, if you are a non-resident you will need to obtain a Portuguese fiscal number.
Here are the key points to be completed when buying property in Portugal
Letter of Intent – document stating the agreed price, dates and all the details of purchase. This is mainly an act of good faith, towards which the property should be taken out of the market
Promissory Contract – signed by seller and buyer and confirming the details from both sides, payment methods, other special terms, etc. 10% deposit is paid by the buyer upon signature of the contract. At this point there is already a legal commitment – if the purchaser withdraws he will lose the deposit. Final Deed – transfer of the ownership, registration of the new owner.
In case the property is owned by an offshore company the transfer of ownership is considered as a purchase of company shares. Your lawyer will investigate and inform you about all the details of such purchase, what fees are present, capital gains tax, etc. After a Share Purchase Agreement will be prepared and signed by both parties.
The taxes to be paid when buying property are:
IMT – property purchase tax - calculation based on the rateable value, can be up to 6%
Stamp duty – flat rate of 0.8%
Notary and registration fees – paid upon signature of the deeds
WHEN SELLING PRIVATELY OWNED PROPERTY – capital gains 28% (of the profit made), does not apply for purchase of company owned property (in this case the purchase is considered a purchase of shares, the owner – company – does not change)
In case of corporate ownership the taxes mentioned above are mitigated.
Annually, any property, privately or company owned should pay the following taxes:
IMI – annual property tax - calculation based on the rateable value, 0.4% in Loulé
Stamp tax – 1% of the ratable value if the property is registered EURO 1.000.000 or above
If your property is a second home we strongly advise you a reliable manager to look after your investment. Our management services include also paying your bills, organizing the maintenance of the whole property as well as representation, translation and liaison with all official bodies in relation to property. And if in the future you decide to offer holiday rentals – an excellent way of paying all the property expenses – you can rely on us to give you all the information and act on your behalf!