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Legal Steps |
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| Legal Steps to Purchase a Property in Portugal |
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A propective property purchaser will have to deal with an unfamiliar legal system and procedure, with specific laws different from his/her own country. Due to this fact we suggest that before you sign any contract consult the services of a local lawyer, who will advice you, carrying out searches and analyses of the proper documentation relating to the property, namely checking the ownership, title, description of the property, mortgages, charges, embargoes, etc and could act on your behalf.
Before committing yourself to a binding contract, your local lawyer should analyse the documents and information required:
? Certificate of the Land Registration (certid?o de teor da descri??o predial) This document is issued by the Local Land Registry Office and proves the property ownership and gives you a description and contents of the property?s legal history.
? Booklet (Caderneta Predial) This is issued by Tax Department an will confirm that the property has been registered for tax purposes.
? Habitation Licence (Alvara de Licen?a de Habitalibilidade / Utiliza??o) This is issued by the Local Town Hall and proves that the building complies with the relevant buildings regulations.
All purchasers of a property in Portugal, even if they are foreigners, will need to apply for a tax number (Numero de contribuinte fiscal).
Please note that if you are buying a building plot, it is necessary to check that the land is suitable for building use and complies with the local Town Hall Regulations.
In the case of buiding work, it is necessary to make sure that the building procedures comply with the building regulations, for example there must be a building licence issued by the local Town Hall.
Promissory Contract of Purchase and Sale (Contrato Promessa de Compra e Venda) Usually the transaction is proceeded by a preliminary contract draw up to cover the purchaser of any property, signed by both parties (seller/purchaser) and should include all relevant details of the property, the terms and conditions agreed, the price, the completion date, etc. A deposit is required upon signature of the contract. The minimum percentage of this deposit is 10% of the purchase price.
Property Transfer Tax (IMT Tax)
This tax is payable by the purchaser before the granting of the deeds (Escritura de Compra e Venda), proff of its payment is required by the notary. The amount due is variable, depending of the property?s price, and is based on sliding scale. The maximum rate being 6,5% on the price of the property.
Final Deeds (Escritura Notarial de Compra e Venda)
The deeds are executed before a Public Notary, and this is prepared and drawn up based on the property?s documents.
The presence of both parties (purchaser and seller) or theirs representatives (using a power of attorney) are required to sign the deeds.
At this stage payment of the balance must be made. The deed is filed at the Public Notary and we can obtain a certified copy of the respective document.
Previous to the deed it must be verified if all expenses and taxes relating to the property are in order otherwise you could be responsible for those payments.
Land Registration (Registo Predial)
After obtaining a certified copy of the deed, the registration of your aquisition must be applied for in order that the property is registered into you own name.
Notary and Registration fees
These payments are tthe responsability of the purchaser and the amount due is approximately 2,5% on the price of the property.
Useful Information:
Following the granting of the deed, the contracts for wter, electricity, gas and telephone must be transferred into your name. This matter can be dealt with through your local lawyer.
Please note that all property owners annually must pay Property Rates (Imposto Municipal sobre im?veis), with the amount due depending on the rate approved by the Town Hall, which will be between 0,4% and 0,8% of the tax value.
Please be aware that this report is not a substitute for professional advice and we cannot accept any responsabilty for any kind of loss or damage. |
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