The Property Buying Process in Portugal

Buying a property in Portugal follows a similar process to that of the UK. However, it is important to note that as an Expatriate, there are other considerations to make. Whilst it is not necessary to be able to understand the language you must have someone helping you who does. Usually that person will be your Lawyer or Solicitor as there is a large amount of technical Portuguese involved in the buying process.

Whilst we cannot get into the fine print of buying a property here, we can explain the basic process that will be followed in the purchase.

In order to purchase a property you need to have a Fiscal Number (numero de identificação fiscal or NIF). This can be obtained from the Finanças department at the council offices (camara municipal). When you obtain this you need to provide an address in Portugal; usually your estate agent or lawyer can help with this. In order to open a bank account in Portugal, you need to have your NIF number and also provide copies of your passport.

Once you have found your property, you need to agree a price, usually through your estate agent. Generally it can be agreed that the property will be taken off the market, however, that is not always the case as many owners have the property marketed by more than one estate agent.

You also need to appoint a solicitor or lawyer to act on your behalf. As a general rule of thumb, a solicitor will only perform the basic functions required to ensure a legal purchase and a lawyer will perform more thorough investigations during the purchase. For that reason it may be better to use a lawyer for your work, although you must expect to pay a larger fee than you would with a solicitor.

There are four main documents that need to be provided with a house to prove its readiness for sale. These are:

• Certidão de Teor – This confirms that the seller has title to the property, that it is registered in his/her name and indicates any outstanding debts or mortgages on the property.
• Ficha Tecnica de Habitação - Gives all the information about the property such as the builder’s details, the materials used and who supplied them.
• Caderneta Predial – This confirms the size of the property, its location and boundaries, although this can be quite vague.
• Licença de Utilização - Confirms that the description of the property is in accordance with the property you are buying.

The solicitor/lawyer will also check that there are no other interested parties. This is particularly important in Portugal as much of the older property and land that is available has been passed down through families over many years. This means that there may be a second-cousin-twice-removed that has a 1/18^th share in the property. All interested parties, no matter how small need to agree to the sale.

Another point to note is that you will need a topographical survey top be performed on the land to ensure that the boundaries are correct. Traditionally, everyone knew everyone else in the villages and also where their land started and finished. The boundaries were marked by specific rocks and trees but now the land registry needs an accurate picture of the land as they update their records with new purchases.

Once all the correct checks have been made, a Promissory Contract is made and both parties agree to the sale. This is accompanied by a deposit of 10% (usually, but could be higher). Once this Promissory is in place, there is a financial penalty to both sides. If the buyer backs out, they forfeit their deposit and if the seller backs out they are legally obliged to return double the deposit.

• The Promissory Contract (contrato de promessa de compra e venda) contains
• The identification of both parties. T
• The identification of the property, its registration number and Tax number.
• Confirmation of clear title
• The price agreed.
• The deposit amount.
• The date of deadline for signing the Final Deed (Escitura)
• Use of property in the interim period if required.

Once the Promissory is in place, the Deed of Purchase and Sale (Escitura Publica de Compra e Venda) is drawn up. Prior to signing this, the lawyer will make a number of additional checks on the property. These will include

• Any planning restrictions on the property that could restrict any future plans.
• Are all utility bills and taxes paid? All debts on a property are inherited by the new owner.
• Have any works or alterations been done to the property that are not registered and don’t comply with the authorities or have a habitation license (Licença de Habitação).
• Are there any restrictions on the use of the property?
• Has any survey been completed to your satisfaction
• If furniture of fixtures and fittings are included are they specified?

When all checks are completed the Escitura can then be signed by both parties in the presence of the Notary and balance of monies exchanged. This can be done by Power of Attorney (Procuração) if you wish. The Notary will also make sure that all taxes will be paid

Once the Escitura has been signed, the Notary will issue you with a stamped copy and you can get additional copies which is advisable. The original will carry the seal of the Notary but do not confuse this for a Title Deed. The property then needs to be registered on the Land Registry (Conservatoria do Registo Predial), for which there is a charge and needs to be submitted within 30 days. Effectively, you are not the legal owner of a property until the Escitura has been registered at the land registry.

Just as a final note, don’t forget to register with the tax office (finanças) all your services such as water, gas, electric and telephone.

Good Luck.