Buying in Portugal is a straightforward process provided you adhere to the letter of the law and are advised or represented by a competent and fully qualified lawyer who is fluent in a language that you understand.
You can give your lawyer or anyone else power of attorney to sign documents on your behalf, but closely follow that the proper steps are being taken without delay. At the beginning of the transaction when the buyer agrees to buy and the seller agrees to sell, a formal contract is drawn up by your lawyer, (Contracto Promessa de Compra e Venda / Promissory Contract), and it should include all the terms and conditions of sale. (The contract is then legalised by registering it in the Notary Office, similar to the U.K.)
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, amount will have been previously agreed. The Deposit is usually 30% of the full purchase price.
Prior to the act of completion, the purchase may be subject to a tax payment - I.M.T. (to the Tax Office) Depending upon the nature of the purchase the amount can vary.
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 non-resident wants to sign himself, the Notary will insist on a translator being 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. We can arrange all of this for you, as part of our service. If you have any questions or require further information, please contact us, we will be happy to assist you. Ready for your viewing trip? Click here.