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Buying Property

Portugal - Buying Property


Portugal's property market has displayed a resurgence of life in the last two years with 2016 seeing house prices rise by 2.78% (without inflation added). Urban areas such as Barcelos, Amadora, Lisboa, Xira and Porto have seen the greatest increase. With real interest from property investors and affordable prices for locals and foreigners the prospect of owning a property in Portugal is becoming more and more popular with expats in particular.

To be certified professionally and trade as an estate agent (agente do estado) agents must be certified by the Instituto da Construção e do Imobiliário (INCI). Once certified the agent will be assigned a license number from the Associação de Mediadores Imobiliários which can be checked by using the INCI website. Whether advertising, on their business card or on their website, the estate agent's licence number should be easy to find and check. Make sure your agent is a member of a professional association such as Associação dos Mediadores do Algarve (AMA), the Associação de Mediadores Imobiliários (AMI) or Sociedade de Mediação Imobiliária. Ideally, the agent would be a member of the European Federation of Estate Agents for extra protection as Portugal estate agents are not regulated.

When it comes to agent fees their commission usually amounts to 5-10% of the agreed selling price. It may be that their fees have already been factored into the price. Make sure you find this out before you proceed. Estate agents list and sell properties only. The procedure after this point is handled by the lawyer (advogado). The agent may refer you to a lawyer but it’s up to you if you want to risk having a lawyer with a potential conflict of interest affiliated to the agency. It is useful to also research other lawyers.

In rural areas, word of mouth and recommendations over which local estate agents you should visit can be useful and somewhat necessary. You will find that face to face discussions with agents is the best way of accessing all of the properties available to you as they may be listed on their computer system rather than online. For urban properties which pop up in brochures or in resort areas newspapers,estate agents websites and properties websites are the way to go.

Property websites

Portugal Property - Extensive and regional list of properties for sale.

Casa - Detailed property website listing from apartments to houses to farms.

Rightmove - Internationally known property website with useful filters.

Zoopla" - Internationally known property website with useful filters.

A Place In The Sun - UK based website with advice and a list of properties on sale in Portugal.

Century 21 - Site for commercial and residential properties.

Portugal Property Experts - No.1 real estate agency in Portugal

Newspapers

The Portugal News - Popular online newspaper for English speakers.

DN - Local newspaper with English online translation.

CM Jornal - Local newspaper with English online translation.

Portugal Resident - Advice and information on buying with up to date reports.

Hey Portugal - Useful online information on buying and living in Portugal.

Some expats buying in Portugal do opt for buyer’s agents to take some of the stress out of the process. Buyer’s agents come with pros and cons. A pro is that the agent will represent your needs exclusively whilst being able to talk to the necessary professionals in the local language. A con is that they will incur higher fees than other professionals. Such an agent must retain the same training and qualifications of an estate agent.

Organisations for foreign property buyers

Association of International Property Professionals where buyers can check for rights and regulations surrounding purchasing a property in Portugal. The voluntary members are industry professionals.

Information on the Portuguese golden visa which allows for residency and the purchasing of property.

European public real estate association.

When looking to buy a property you should have copies of your passport set aside and your Fiscal Number (numero de identificação fiscal / NIF) from the Finanças department at the council offices (camara municipal). When you have a property in mind, go to the estate agent associated with the property and agree on a price to purchase the property which should see it taken off the market once the seller has agreed. If you have a buyer’s agent they would have been organising this purchasing process from the beginning of the sale.

Find a reputable solicitor or lawyer to represent you (generally they will speak English). The lawyer will carry out investigations and more in depth checks throughout the process (debt and tax for example) whilst the solicitor will carry out tasks in order to secure the purchase of the property. The lawyers check no one else is interested in the property, if they are or they have a claim on the land it must be settled before you can continue.

The following documents will be sourced to continue the purchase by the lawyer. The Certidão de Teor detailing the mortgage and debts of the property if any plus certifying the seller has the property title. The Licença de Utilização confirms the property has been described the same as the property being bought. The Ficha Tecnica de Habitação includes the materials used on the property, the suppliers and the builder; also the Caderneta Predial is necessary which authenticates the property’s location, the area of land associated with the property and the size of it. The notary (notário) ensures that all taxes are paid.

Now would come the typography survey so the land registry knows the boundaries of the property. After this it is The Promissory Contract (contrato de promessa de compra e venda) where the buyer pays a deposit of 10%. After this has been signed, there are expensive penalties if either side pulls out. Once the contract is completed the lawyer will have found out about debts, utilities, restrictions on the property etc and drawn up the Deed of Purchase and Sale (Escritura Publica de Compra e Venda). The notary witnesses the signing of the Escritura by both parties and a stamped copy of the Escritura is given by the notary to the buyer.

Next is the registering of the property with the Land Registry Conservatoria do Registo Predial) which are part of the Instituto dos Registos e do Notariado (Institute of Records and Notaries. The cost is around 0.75€ to 1€ per cent of the property’s value. This needs to be undertaken within 30 days of the Escritura being finalised. Once this is completed the buyer is then the official owner.

To work in law in Portugal, lawyers must have had their license issued through The Ordem dos Advogados (the Portuguese Bar Association). Their website allows for you to search for accredited lawyers and lawyer firms.

Details of land law, estate law and list of qualified Portuguese lawyers.

List of European law firms.

Most of the fees paid by the buyers are fiscal value (valor tributável) of the property or pre declared. Legal fees usually amount to 1%-2% of the purchase price. There is a minimum charge of 1,000€ and the total amount depends on how much work is undertaken and the nature of the work. Get agreed written confirmation of the fees before the lawyer begins. The notary fees are legally fixed in rates which amount to €153 per transaction with €1.25 amendment fees. Notary, administration and registration fees depend on how many documents were processed (Imposto de selo) and usually amount to 2.5% of the purchase price.

There will be mortgage fees too for valuation, an appraisal, an administration fee, a commitment fee and an arrangement fee (around 1% of the loan total). If you have a survey done on the property as is standard practice, depending on the type of survey it can range from 800€ for a full structural survey (more if the house is valued more than 200 000€) and around 500€ for a valuation for a property and home buyers survey (more if the house is valued more than 200 000€).

Occasionally, buyers have fallen into the trap of being conned by unlicensed estate agents who overcharge them badly. Furthermore, some buyers may get pressured into signing contracts which they do not understand and consequently sign over power or money unknowingly. Another pitfall can be using the lawyers recommended by the estate agents who may have somewhat vested interests. You need factual, unbiased advice from a legal professional so choose one yourself. Estate agent fees are almost always added to the price of the house but check very carefully that this hasn’t been done before you purchase and after as some sneaky cowboy agents try to rip off buyers by charging them twice.

Another problem about purchasing property would be untruthful sellers. Perhaps the sellers have debt connected with the property (known as subrogation) such as mortgages, community charges and taxes and these are therefore inherited by the buyer once the property is in the buyer’s name. This is why using lawyer (English speaking) can expose such situations and prevent you making a bad investment and losing money.


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