Now you have found your property –
A step-by-step guide through the process of purchase to completion.
The first thing you need to do is obtain a Fiscal Number (Numero Fiscal de Contribuinte). This is your tax number, and will be needed in all official transactions in Portugal. Every adult needs a fiscal number. The process of obtaining one is simple: go along to the local tax office with your passport, and for a small fee, you will be issued with your number on the spot. Your card needs to be sent to an address in Portugal, but you can legally use the address of a reliable friend, estate agent or lawyer for this purpose. (Remember to change the address to your own once you are installed in your property).
The next thing is to open a Portuguese Bank Account. Choose your bank using the criteria you would in the UK (convenience of locality, opening times, terms and conditions of banking etc.) You would also be well advised to look for a bank where English is spoken, as this does make the setting-up process (and everyday dealings) very much easier. The bank will accept your home address, and will ask for your passport, fiscal number, birth certificate, nature of employment, and utility bills. (These last items can be forwarded later if you do not have them with you.) You will need to have some money to put into your account immediately in order to set it up. As soon as possible, you will need to transfer sufficient funds into the account to cover your deposit, if you are signing a Promessory Contract.
Find a lawyer(advogado) A good lawyer is indispensable – obviously you need a lawyer who is fluent in your language unless your Portuguese is of a very high standard, or you have a translator to hand. It is a good idea to get a recommendation – not all lawyers are neccessarily specialists in property purchase.
Alternatively, you could look for a solicitador, who is a professional
conveyancer, registered with the Câmara dos Solicitadores. The duty of
your lawyer is to:
- Check with the Land Registry (conservatória de registro) that the vendor actually owns the property and can legally sell it, by obtaining a copy of the escritura (written deed).
- Check that there are no family inheritance interests still attached to the property- eg. no grandchildren who are going to appear with a legal claim to a parcel of land.
- Check for the existence of any rights that a third party might have on the property (eg access across your land), and for any planned buildings or roads in the vicinity.
- Ensure there are no outstanding taxes, mortgages, utility bills etc. on the property. A certidão de registro should be issued by the local Land Registry to confirm that this is the case.
- Check that all building certificates are in order. Houses built or altered since December 2003 are obliged to have a ‘Ficha técnica de habitação’ which is a very informative document containing all the details of the building of the property. This document should be made available to you and/or your lawyer by the owner, and a copy should be held by the Câmara Municipal (local council). Houses built after 1951 need a licença de habitabilidade or cédula de habitação that certify that the property is fit for habitation. Houses built before 1951 should have a certificate from the Land Registry.
- Obtain the Caderneta Predial, that details the taxable value ( valor tributável) of the property, from the Fiscal Department.
- Check that the Exercício de Direito de Preferência (Neighbour’s Right to Buy) has been carried out, if applicable. This condition only applies to pieces of land (prédio rustico) or ‘urban articles’(ie buildings that could be used for habitation) on a piece of land (prédio misto). In these cases, neighbours whose property borders that piece of land for sale, must by law be informed and given the opportunity to buy. If this is not done, according to the prescribed protocol, the right for them to buy can continue even when the property has exchanged hands.
- Take Power of Attorney (Procuração) if needed. To arrange this, you need to visit the Notary’s Office with your lawyer, and a translator, and pay a fee. Your lawyer is then able to sign, on your behalf, both the Promessory Contract and the final document of sale, the escritura, if you are unable to do so yourself in person.
- Draw up the Promessory Contract (if required) or advise on direct total purchase if this option is chosen.
If you are planning to build or extend your property, you need to obtain a Planning Status Report (Parecer de Câmara) and a Usage Licence (licença de utilização) from the Câmara Municipal (local council). These will set out any local planning restrictions that may be relevant.
Ensure all your financial arrangements are in order before proceeding to the Promessory Contract. Once you have made your deposit it is non-returnable, unless the vendor changes their mind or defaults on the sale.
Make the Promessory Contract (contrato promessa de compra e venda) with the vendor. Although it is not legally obligatory to go through this stage, it is the norm, and it is advisable to use a lawyer to draw up the contract. When you sign the Promessory Contract you pay a deposit to the vendor (usually 10%) and both parties are committed to the exchange. The price and the date of completion are agreed at this stage. If the buyer backs out of the sale after this point, he loses his deposit (unless the contract contains a pre-specified clause of annullment that is justified – eg the survey produces an unsatisfactory report) but if the seller backs out he has to reimburse the buyer double the amount of the deposit
Complete the sale by making an Escritura Publica de Compra e Venda (Public deed of purchase and sale). This takes place at an appointed time at the Notary’s office, with the Notary and all interested parties in attendance (or your lawyer acting on your behalf with Power of Attorney). You will need to have your passport with you as proof of identity. It is a legal requirement for you to understand what it is you are signing when the escritura is presented to you to read, so if you are not fluent in Portuguese you will need to have someone with you to act as translator. Both parties in the exchange sign the escritura and you pay the balance of the purchase price, as well as the Notary’s fees.
Register the property in your name as soon as possible at the Land Registry (Conservatória do Registo Predial) taking your copy of the escritura and the Caderneta Predial (property tax certificate) obtained from the Finanças (Fiscal Department), and the appropriate fee. It is also important to ensure that the Finanças is given the details of the new ownership of the property, and that they receive your request for exemption from the IMI tax if this is applicable. This completes the purchasing process.