Buy and Sell Properties in Portugal - questions and answers
1. What documents do I need to buy a property?
The law provides that the contract of sale of a property is to be celebrated by public deed or private document authenticated by a lawyer or solicitor.
In the deed of purchase of property or private document intervene, Typically, the buyer and the seller.
In special cases may speak other entities such as representatives of credit institutions, Attorneys representing the buyer or seller, spouses who must give their consent for sale, interpreters in the case of buyers or sellers do not understand the Portuguese language etc..
With regard to the documents necessary for writing , we can distinguish between the documents relating to stakeholders and the documents relating to property.
The documents and information on the actors , necessary for the execution of the deed / private document are as follows:
In the case of natural persons:
identity card / citizen card / Passport
tax card .
- personal data:
marital status ( married, single , divorced, widowed),
wedding arrangements ( separation of property,
communion of acquired,
general community of property )
naturalness ( place of birth and respective parish and county )
In the case of legal persons, and specifically in the case of commercial companies:
- Business Registration Certificate , issued less than a year and company identification card (might still be needed documents such as minutes of board of directors or the general meeting, depending on the type of society , its objects and the way linking).
- Identification of the legal representatives of the company shall grant on behalf of the company (Citizen card or ID card , taxpayer).
The documents relating to property , necessary for the execution of the deed , are:
- Certificate of Land Registry or access code Certificate Permanent Building issued less than six months by the Land Registry Office competent. This document shall contain the description of the building and its application on behalf of the seller, and allows you to check if there are any liens or encumbrances registered on the property and to be canceled at the date of writing such as mortgages , liens, easements .
- book building, issued or updated less than a year the property area of ??the Tax Office or obtained from the Internet the property owner , This document allows you to check if the property is registered in the name of the owner, areas of the property, composition, confining and taxable value (tax value of the property after assessment by the Tax Office)
- Use license , issued by the Municipality area of ??the property (in certain specific situations , the use license may be replaced by the building permit or even waived, if it is a property built before August 7, 1951 ?namely- before the entry into force of the General Administration of Buildings and constructions, or the property of the case have matrix description ( the division of Finance) in 1937. This document allows you to check if the property is properly licensed by the competent authority for housing, trade or services.
- certificate issued by the Municipality area of ??the property, supporting the provisional acceptance of urbanization works or supporting the provision of sufficient collateral to secure the completion of development works (only in cases involving the first transmission of buildings constructed on lots or units of these properties);
- Technical Document of the House (only in case of purchase of residential property which the application for license for issue is submitted after March 30, 2004);
- Documents proving the waiver of their preemptive rights, issued by the City Council and / or the IGESPAR - The Archaeological Heritage and Architectural Institute (only in cases where the law gives these preemptive rights to these entities) or in the case of a neighboring building Rustico.
- Energy Certificateand Indoor Air Quality in Buildings
At the time of conclusion of the deed of sale, the buyer shall also deliver to the Notary or Lawyer / Solicitor settlement guides relating to duties owed ??by the buyer: Municipal tax Property Transfer (IMT) and Stamp Duty (I.S) with proof of payment, except in situations in which the acquisition is exempt from this tax (IMT)
If you want to resort to bank credit to finance the acquisition , the buyer should confirm which documents required by your bank.In these situations , one of the requirements normally required is the submission of provisional registration of acquiring and mortgage.
2. When I want to buy a property should or not I conclude a pre-contract of sale?
After analyzing all the documentation of the property and all the assumptions and constraints related to property purchase, proceed will be the preparation of the purchase agreement and promissory sale, What is a contract by which the parties agree, by mutual agreement or unilaterally, to conclude certain future contract and permanent.
The signing of a promissory contract of sale , it appears convenient in situations where, existing interest in ensuring that business, not yet met the conditions for the deed of sale.
This can occur for various reasons, eg in the construction of the building has not been completed, to be still pending the constitution of horizontal property, for the property does not have use of license,or by the buyer does not have the amount necessary for payment of the price or is still awaiting the approval of bank financing for the acquisition.
- Through the conclusion of a promissory contract of sale, the parties may first be bound (at a time when not yet have all the necessary documentation for the execution of the deed or , quite simply, is not appropriate for party immediately grant the deed) ensuring that the agreed period, formalized the purchase and sale .
- In this contract the parties ensure legal certainty in the event of delay or breach of contract.
Often , the decision to enter into a promissory contract of sale has to do exclusively with urgently need to formalize a binding document between the parties, it being understood that the marking and formalization of a public deed of purchase and sale, for faster it can be, never be as fast as the conclusion of a promissory contract .
The decision about celebrating or not a pre-contract of sale is therefore dependent on the specific situation of the business and its stakeholders.
3. What are the essential elements of a promissory contract of sale?
The contents of a promissory contract of sale may vary considerably depending on the specific circumstances of the parties, the property is situated object of the contract and the desired business model.
Therefore, the promissory contract can and should contain all the conditions and obligations that have been in business base, namely, essential and ancillary provisions , any precedent or conditions that may have been set, definition of price and conditions and payment terms, date setting for the granting of the final contract, identification of applicable warranties and penalties and all other clauses necessary to safeguard the interest of the parties involved in the business .
On the other hand , the analysis of property documents can reveal circumstances for the same that must be seized in the clauses of the purchase contract and sale commitment. It is common, for example, include the promissory contract of sale the seller's obligation to proceed deficiencies arrangement recorded on property documents.
Finally , the description of physical conditions may also justify the inclusion of specific provisions in the promissory contract . Often included in the pre-contract obligations of the seller to promote certain works or repairs to the property before the conclusion of the deed.
Briefly, we can indicate the following essential elements that must be included in the promissory contract of sale:
- IDENTIFICATION full party ( for natural persons : name , place of birth and nationality, marital status , residence, number of identity card / citizen card and tax number; and , for legal persons : company name, registered office , capital , registration number and person, and identifying who is the society with quality reference and powers that it does);
- Full identification of the promise of object building: (location and composition , number of description of the building with the Land Registry , matrix article under which the building is registered in the tax office and number, date of issue and issuer of the use permit or construction or statement that exemption);
- Stipulation of promise, specifying :
If it is a bilateral or unilateral promise and
if the property is not acquired or burden -free, charges or other liabilities , and free and empty of people and goods;
- Price and payment method , including an indication of the amount signal and their reinforcements , if necessary;
- Deadline for completion of the deed of sale and indication of who should to have it dial;
- Any conditions which the parties intend to subject the purchase and sale of the property and the consequences of not checking;
- Indication of the guarantees and obligations of the parties, eg:
- Declaration for the due legal purposes that the date of land purchase and sale deed the property is properly demarcated according to law for the purposes of land registers, the areas listed in the land register coincide with the property description and plans approved by the City Hall of using license
- Statement that the preliminary and in the formation of this contract shall be omitted to the engaged - buyers any information or fact that the promissory - buyers should have knowledge in consideration of its willingness to carry out the business, either on the physical and legal status of the building, which may have direct or indirect implications of this sale of the vacant building and free of burden costs or liabilities .
- Declaration that the property is duly registered at the Land Registry and placed in the matrix in its favor.
- The areas and existing buildings correspond to the areas and composition described in the respective documentation , matrix , building and city council so in case of discrepancy shall be rectified before the date of the deed.
- Free of any mortgage burden , encumbrance or liability , and vacant .
- To the best of his knowledge , there is no notification , claim, lawsuit or other pending arbitration proceedings or a threat that would affect your right to the building, next to the Court, of any government department or local authority of any way affects or may affect the fulfillment of all the duties here .
- Except for the provisions of the promissory contract , there is no pre-contract of lease or other , whatever its nature is related to the building or part thereof , which may materially restrict or limit the use or provision thereof by PROMITENTES- BUYERS
- That is no debts to the tax authorities relating to property resulting from the purchase or use by the SELLER promisor .
- The building is in regular housing conditions and with all their equipment and internal networks and water facility, electricity, sewage, gas under normal operating conditions and did not suffer any change in its configuration and confrontations;
- If any, on this date, any insurance policy on the property object of this contract, promissory - Sellers undertake to keep it in force until the date of the deed of sale .
- Indicating the method of service and local indication of Realtor intervention .
- Consequences in the event of breach of contract , in particular , the entry for the procedure laid down the specific implementation of Article 830° the Portuguese Civil Code.
In the case of promise on the conclusion of costly transmission contract or real right on constitution building, or his building unit already built , under construction or to be constructed , the promissory contract of sale must contain the signature of the face recognition promisor or the engaged ( depending on whether a unilateral or bilateral promise ) and certified by the notary, the existence of a permit of use or building.
4. What does this mean "give the contractual position" prospective buyer of a promissory contract of sale?
The promissory contract of sale may include the ability of the prospective buyer to assign its contractual position to a third.
If the promissory contract of sale does not provide for this possibility, the assignment of contractual position is subject to prior authorization to be given by the prospective seller. Assign the contractual position means transfer to a third position of the prospective buyer a certain promissory contract of purchase and sale , from the third person to be the holder of all rights and obligations to the prospective buyer emerge from this promissory contract. The assignment of contractual position by investing the third position in the prospective buyer , has the effect of decoupling of the prospective initial purchaser.
Both the transfer of contractual position , as the mere possibility of transfer provided for in the promissory contract of purchase and sale , have tax consequences in IMT ( Municipal Tax on Property Transfer ). Indeed , the tax law presumes the existence of a costly transmission whenever there is a transfer of the contractual position ( actual or potential ) , taxing it as if it were a real transmission, ie the tax is levied on the value of the sign paid by the buyer but the rate for the total amount.
When the final contract is made or that the taxable event occurs before the conclusion of the final contract and that the contractor has already paid the tax due for that there is only room for additional payment when the value to compete the final transfer exceeds what was the basis for previous settlement. If the buyer benefit from reduced rate or exemption will be to carry out of partial or full cancellation of the tax
The inclusion of clauses in the contract or promise to allow for the possibility for the prospective buyer to assign its contractual position to a third party must always be carefully considered, given the associated tax consequences.
5. What are the consequences of breach of a promissory contract of sale?
The consequences of the promissory contract of non-compliance may be provided for in the contract.
In the absence of specific provisions in the promissory contract of sale , the general rules of the Civil Code will be applied.
The Civil Code provides the following supplementary basis applicable rules:
- In case of failure by the prospective buyer, he will lose the signal that has made in favor of the prospective seller;
- In case of default by the prospective seller, he will constitutes the obligation to repay, double, to the prospective buyer the signal that it has already paid; alternatively to the signal double refund , in situations where there has been transmission of ownership over the property, the prospective buyer may require the property value determined objectively in the date of fulfillment of the promise, with price deduction agreed, and should also be restored unto him the sign and part of the price that has been paid;
- In the preliminary contract should be indicated the deadline for which is found that there failure not only delayed greetings. May be specified that will be deemed to default on provided that being a part in (late greetings the counterparty proceed to formal cautionary (send a written statement ) that setting a reasonable deadline for compliance with the obligation in question and the same reoffend in not fulfilling its obligation within the same.
- Therefore , the parties shall soon set in the contract the period considered reasonable for compliance, the terms and for the purposes of Articles 801 a 808 the Civil Code Portuguese, after the maturity of the obligation to grant the deed to that delay becomes in default on.
- If the party fails to meet again on the date indicated the counterparty must send a new written communication along the lines agreed in the contract indicating the contract is considered definitely unfulfilled losing the signal or giving right to receive part of what they paid double.
Alternatively to the above compensation , can the non-defaulting party , choose to apply to the court for specific performance of the contract, in order to obtain a judgment of the court to replace the business declaration of defaulting promisor, thereby obtaining the enforcement action of the promissory contract of sale .
6. What is a provisional registration? When intend to buy a property that records should I do and at what time?
The Land Registration Act provides for the possibility of being realized provisional registration .
The provisional registration of acquisition consists of the purchase of registration to the buyer before the conclusion of purchase and sale deed.
The seller declares upon registration that promised to sell that property to the buyer at the price defined in the promissory contract.
The provisional registration of mortgage is the registration of a mortgage on the property before celebrated its deed of mortgage (which in most cases is celebrated along with the deed of sale).
These records serve to ensure registral priority over any other records, supposedly, could be promoted by third parties until the date of the deed (such as pledges or mortgages).
The application for provisional registration of the acquisition shall be signed by the prospective seller (but its signature is recognized in person, or, alternatively, the application for registration be signed in person at the Land Registry Office). If there promissory contract of purchase and sale signed and recognized signatures, the application for registration may be signed by a lawyer / solicitor or the prospective buyer own, provided that the registration request is accompanied by the promissory contract (or certified copy thereof).
With respect to the provisional registration mortgage, its application must be signed by the prospective buyer (but its signature is recognized in person, or, alternatively , be the application for registration signed in person at the Land Registry Office), provided that you have previously submitted a provisional registration acquisition in its favor (In practical terms , these records are displayed simultaneously , with the acquisition is taken to registration before the mortgage).
The provisional registration shall expire six months from the date of its submission , if not converted into definitive (although they can be renovated).
After the granting of writing / certified private document of sale and mortgage, if applicable, the provisional registration of acquiring and mortgage should be converted into definitive (backdating the effects of the acquisition and mortgage, to registrais effects, the date on which the requests of provisional registration were presented).
While it is true that the provisional registration, usually, usually take place only when there is acquisition financing ( because they are a requirement by the bank), the reality is that the performance of interim acquisition records ? even when it is not a bank involved ? is an additional guarantee for the buyer.
Indeed , a provisional registration acquisition may give the buyer the security of knowing that, when making your deed of sale, may convert the purchase log definitively, doing " drop " the recording of other liens or encumbrances that however may have been recorded on the property.
If provisional records are not made, or acquisition or mortgage, the registration of the acquisition should be promoted soon after the granting of the public deed of sale
Finally , it is noted that any application for registration shall be accompanied by the book building or property of the matrix content certificate.
7. O que é a Technical Document of the House?
The Technical Document of the House is a document that describes the technical and functional characteristics of housing and is mandatory submission at the time of writing / private document for all properties which the application for license for issuance has been submitted after March 30, 2004.
Where it is concerned the acquisition of a new building for housing, a copy must be requested from Technical Document of the House or Technical Document of the House provisional, If the property is not yet completed. The law states that the Technical Document of the House can not be handwritten (except for subscriptions to technical) and must be written in Portuguese in a clear and visible manner to the recipient.
The Technical Document of the House must contain information on key professionals involved in the design, construction , reconstruction, extension or alteration, as well as information about the real estate developer, on the allotment , on urban building and the building unit or single family dwelling that is concerned.
They are also required information that must appear on the Technical Document of the House, the following:
- Housing Guarantee and its drive mode in case of detection of defects;
- The condominium rules and procedures, if any, and contracts for services that have been concluded;
- Maintenance rules of installed equipment that require special treatment .
The Plans for the development, building and building unit, must be identified on the spot of Technical Document of the House and constitute an attachment that is an integral part of the document.
The preparation of Technical Document of the House is the responsibility of the real estate developer , and this , together with the technician responsible for the work, sign this document, verifying the accuracy and compliance of the information in Technical Document of the House with the draft architecture and specialties relating to the property.
The buying and selling of real scriptures whose use license was required after March 30, 2004 may only be performed if the Technical Document of the House concerned to the property appear before a notary / Property lawyer. This obligation applies to both first transmissions , as all subsequent transmissions.
The owner has the obligation to keep the Technical Document of the House, while the property is your, in case of sale shall deliver it to the new owner. In case of loss , damage or loss of this document , the owner can get duplicate of Technical Document of the House with the property of the promoter or with the competent Town Hall .
The prosecutor must keep their Technical Document of the House for a period of 10 years, given that the Technical Document of the House shall also be filed with the competent Town Hall.
8. What documents should I require and what should I watch before the conclusion of the Public Deed / certified private document of buying and selling a property?
Prior to buying a property, should be carried out a number of checks in order to confirm their legal situation.
Many of the issues associated with the property 's legal situation can be verified through the documents relating to real estate , which are usually provided by the seller , which have already been mentioned in connection with the answer to the question nº- 1.
Anyway, point is then that the authorities from which it can obtain the documents relating to a property, and the information that can be obtained from such entities.
In the Registrar competent Land can be obtained a certificate from the Land Registry regarding the property and verify the following situations:
- If the building does have a description given by the seller and if it is the same as indicated in the booklet and on the building project approved by the City Council and license to use issued by the same;
- If the seller is the current and sole owner , and are therefore entitled to sell the property;
- If there are no mortgages or liens registered or pending registration in favor of third;
- If there are no other registered or pending registration of rights , which may restrict the use of the property.
In the local tax office of ??the property may obtain a building book or property of the matrix certificate and verify the following situations:
- If the property description with the Finance Services corresponds to the constant property description the certificate of the land register;
- If the property is vacant ( this confirmation is not absolute , since there may be leases in an irregular situation , ie , that have not been declared at the Finance Services);
- If there are any amounts that are outstanding for the Property Tax (IMI ) or, on the contrary, there are tax claims of this nature for which the property could respond for.
- check whether the property has already been evaluated by the rules of CIMI and which the Tax asset value of the same (value under which the focus property tax )
In competent Municipality can be obtained licenses to use certificates or building and also check the following situations:
- If have already been issued building permits / use relating to a property and which is built corresponds to the approved design.
- If the land is located in an authorized area for urban construction , and was issued allotment permit , where appropriate (in case of acquisition of land for future housing construction );
- What are the features of the property that can be built ( in case of property to build on land with permission to build );
- If there are rights of first refusal in favor of the City Council or the State, listing the property.
The documents required for the writing / private document are those given in answer to the question nº 1.
In addition to these documents and in addition to the above findings , it is also important to check if there are any preemptive rights to third parties other than the State ( owners of adjoining buildings , where it is linked to transmission of a rustic building , or owners of other farm buildings located in the same area , if it is a rustic building included in area of ??National Agricultural Reserve , Property tenants, etc..).
If any preemptive rights in favor of third parties should be required to supporting seller that the holders of their preemptive rights were reported to exercise that right and renounced it ( explicitly or because they missed the deadline for that purpose).
Finally, if levied a mortgage on the property , the seller should be required to ensure its cancellation , with the latest at the time of writing , distrate document the same . This is common , given that it is common property developers finance their deals in offering guaranteed the properties subject of the promotion, then proceeding to the cancellation of the mortgage on each unit , lot or dwelling, as they are being sold.
In addition to the legal aspects mentioned above, before buying a property the buyer should always carry out a verification of the physical situation in which it is (confirmation on site, areas , features and property boundaries , its location , status conservation activities by neighbors which could impair the use of the property , etc.).
9. When should I pay the Council Tax Onerous Transfer of Real Estate ( IMT ) ? How do you calculate the value to tax?
If there is no room for exemption from this tax , the payment must be made with the competent tax office or via the internet ( www.e-financas.gov.pt ) , prior to the deed of sale by the buyer.
The value that is the basis for settlement of the IMT is the taxable value of the property or the value of the transmission, depending on whichever is higher.
The amount of the IMT is determined by applying the rates laid down in the IMT Code , which are distributed by categories . Both levels as rates are usually changed annually by Law on the State Budget .
10. Is There any exemption from property taxes (IMI ) for the acquisition of property for the housing?
In general , the exemption of IMT must be requested before the act or contract the originator and always before the settlement that would make.
Exemption benefits when purchasing a property exclusively for permanent residence , and the taxable value or the declared value of the property does not exceed the amount provided in art. 9 of CIMT , ie ? 92407 euros.
These benefits or rate reductions also apply to the exchange of real estate is the property you receive is intended for permanent residence, or is intended exclusively for housing, and the difference in tax book value or the stated difference values ??( the higher of the two ) between the property and the delivery you receive, not exceed the value set out in artº 9º.
The benefit of exemption applies only to urban buildings used exclusively for permanent residence and not the land for the construction of these properties.
If the goods is given different destination within six years from the date of purchase , except in the case of sale, if the properties are not allocated to permanent residence within six months from the date of acquisition or, there place the assessment of the good that would take effect in IMT , the VPT is higher than the value set out in art. 9º do CIMT
What are IMT rates ?
- Rural estates ? 5%
- Urban property exclusively for residential 1% to 6%
- Urban buildings intended solely for permanent residence 0% to 6%
- Other buildings and other acquisitions - 6,5%
- Buildings acquired by entities resident for tax purposes in a country, territory or region subject to a more favorable tax regime , list of constants approved by order of the Minister of Finance - 10%
IMT Payment Term?
In general, the IMT is payable on the settlement day or next working day.
If the act or contract is concluded abroad , the tax must be charged and paid during the month following transmission.
What other taxes and fees levied on the purchase and sale ?
On the value of the acquisition: 0,8%.
This tax is paid by the buyer at the time of the deed of concerns the taxable value or the amount agreed between the parties , whichever is higher.
On the loan amount:
Stamp Duty s / granting credit (appropriation 17.1 of TGIS):
- Up to 1 year for each month or part thereof: 0,04%;
- 1 to 5 years: 0,5%;
- Another 5 years: 0,6%.
Fees scripture / private document and Land Registry:
The emoluments of the particular deed or document depend on the notary or lawyer / solicitor to draw up the document.
The land register of acquisition in the conservatory will cost 250.00 euros is presented
In Office or 225.00 euros is presented online.
After the execution of the deed what steps to take?
The lawyer or notary responsible shall register the purchase on behalf of the buyer
Within 10 days of the signing of the deed or private document.
In addition to recording the acquisition in the Conservatory must be carried out Acquisition of endorsement on behalf of the new owners.
Since the date of acquisition, the new owners will be responsible for the payment of taxes and expenses of the property .
What taxes are payable after the purchase of the property?
IMI (Property Tax)
This is the annual Council Tax , levied on the taxable value of housing.
This will be determined by evaluation according to various criteria.
IMI is annual,focuses on the constant tax value of the land register and is calculated by multiplying this value by a percentage of between:
- 0,4% to 0,7% (urban buildings)
- 0,2% to 0,4% (urban property evaluated by the rules of IMI).
The houses for owner-occupied housing and permanent (or rental housing in the first transmission ) can benefit from this tax exemption for a period 3-6 years, as tax value of the property.
This exemption must be requested 60 days after the property transfer to private housing, which must occur within a maximum period of six months from the property deeds at the solicitor or certified private document.
IMI exemption table (*)
|Taxable value||Exemption period (years)|
|to 157.500 euros||8|
|over 157.500 and even 236.250 euros||4|
(*) Housing urban buildings , constructed, expanded, improved or acquired for consideration for the permanent residence of the owner or household.
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