Stage 2 of the buying process
Stage 2: Completion (escritura de compra e venda)
The completion of the purchase should occur approximately 3 - 4 weeks after signing the "promissory buying and selling" contract, when the "escritura" contract, called a escritura de compra e venda is ready to be signed by both the vendor and purchaser. The signing of the "escritura" can be carried out on your behalf by appointing your lawyer Power of Attorney, see above.
At this stage the purchaser must pay the remaining balance of the purchase price (purchase price minus the deposit), transfer tax (Imposto Municipal Sobre as Transmissões or IMT tax ) plus notarial fees to the notary advogado. It should be noted that the remaining balance and transfer tax must be in the notary advogado's possession before the "escritura" contract is signed. The "escritura" is the equivalent to the Deeds of the property. From the signing of the "escritura" contract the purchaser is responsible for the insurance of all the buildings on the property. It is recommended that the policy includes cover for fire, flood, storm damage and earthquake damage.
The signing of the "escritura" ends with the transfer and new registration of the property in the presence of the official notary. Once this has been done and the property is registered at the Land Registry Office and Local Tax Office, and is legally yours. You should make sure that the registration document (Registo) is in your name and is lodged with the Land office and also in the Local Tax Office as soon as possible after the signing of the "escritura" as until you register the property in your name the previous owners can still lodge debt against the property.
Additional costs on purchasing a property in Portugal - values 2011
IMT (UNIQUE PURCHASE TAX – this is the tax that you have to pay if you purchase a property in Portugal)
please have a look on the following table - applicable since 1st of January 2011:
PERMANENT (MAIN) HOUSING in Portugal ( Permanent Living – First home )
| Property Value Prices | Tax Média (1) | Amount to be deducted |
|---|---|---|
| 0 - € 92.407 | 0% | 0 |
| € 92.407 - € 126.403 | 2% | - 1.848,14 Euros |
| € 126.403 - € 172.348 | 5% | - 5.640,23 Euros |
| € 172.348 - € 287.213 | 7% | - 9.087,19 Euros |
| € 287.213 - € 574.323 | 8% | - 11.959,32 Euros |
| More than 574.323 Euros | 6% | no deduction |
SECONDARY HOUSING in Portugal ( Vacation / Rental / Investment – Secondary home )
| Property Value Prices | Tax Média (1) | Amount to be deducted |
|---|---|---|
| 0 - € 92.407 | 1% | 0 |
| € 92.407 - € 126.403 | 2% | - 924,07 Euros |
| € 126.403 - € 172.348 | 5% | - 4.716,16 Euros |
| € 172.348 - € 287.213 | 7% | - 8.163,12 Euros |
| € 287.213 - € 550.836 | 8% | - 11.035,25 Euros |
| More than 550.836 Euros | 6% | no deduction |
EXAMPLE: In case of the purchase in Portugal for a value of 200K Euro the basic tax is of 7% - but in reality have to deduct 8.163,12 Euros of the amount - this deduction is a kind of BONUS - you will pay for this property 5.836,88 Euros purchase tax (IMT)