Don’t Buy Property In Portugal Until You’ve Read This

Portugal is a popular destination with tourists & expats from all over the world. In fact, many senior citizens from the UK and other European nations choose to spend their retirement in Portugal due to its low cost of living. This has caused a boom in the residential and commercial property sector, consequently triggering off many redevelopment and building programs all across the country.While the process of buying property in Portugal is quite similar to other European countries such as the UK, there are a few aspects to be considered. Below are a few pointers to keep in mind before you decide to invest in property there.

Involve a local lawyer
While you don’t necessarily need to know the local language, make sure you find someone to help you who can speak fluent Portuguese and has some basic understanding of the legal framework. Ideally, all expats are advised to hire a solicitor to guide them through the entire investment process. An attorney can also help you obtain all the required documents for a fee.

Get your fiscal number
It is compulsory for all expats to have a Fiscal Number (Numero de Identificacao Fiscal, NIF) before they can purchase property in Portugal. You can obtain this number from the Financial Department at the council offices (Camara Municipal) or the nearest tax office (Ministerio de Financas). The documents required to get this number include Proof of Identity and Address Proof (where the Fiscal Card will be delivered). If you don’t have a local residence, you can provide your solicitor’s address.

Agree on the price quickly
If you see a house that you like, contact the estate agent to find out the price. If the price is above your budget, you can make a counter offer. It is advisable to employ a broker or a solicitor to negotiate on your behalf. Once both parties agree to the price, the property is usually taken off the market. However, this could take a while if the house is listed with various estate agents. In such instances, the seller will keep getting offers from other interested buyers (and may also change his mind).

Draw a promissory contract after careful consideration: This is like an agreement to sale between both the parties, which is prepared when the buyer pays a 10% deposit. Once this contract is drawn up, there is a financial penalty if either of the parties decides to opt out of the sale. As the buyer, if you decide to cancel the deal, the deposit amount will be forfeited. If the seller backs out after the contract is in place, you will receive double the amount you paid as a deposit. Therefore, only put in this contract if you are sure about buying the property and after conducting all the necessary checks. The next step to the sale will be drawing up the Deed of Purchase and Sale, where the complete amount needs to be paid.

Check the necessary documents before paying any money
There are four main documents that expats need to look at before deciding to invest in a piece of property. These are:

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Certidao de Teor, or the registered title in the seller’s name, which indicates whether there are any outstanding debts or mortgages on the property.

Caderneta Predial, which confirms the size, location and boundaries of the property. However, this document is not always exact.

Licenca de Utilizacao, a document confirming that the description of the property is in accordance with the one that you are interested in purchasing.

Ficha Tecnica de Habitacao, which has all the important information about the property, such as material used to build it as well as the suppliers’ and builders’ details.

Rule out the possibility of other interested parties
In Portugal, it is customary for a piece of land or house to be passed down through the family over several years. This means that even a far-off relative may have a small share and therefore a say in the sale of the property. An objection from any shareholder could delay the entire process for months or may cause the deal to fall through completely. This is one of the main reasons people hire a solicitor before investing.

Have you bought a property in Portugal? Did you find the process straightfoward? Let us know about your experiences in the comments.


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