Portugal Country Guide

Everything you need to know about moving to Portugal

How to Purchase Real Estate in Portugal

Portugal makes it easy for expats to purchase property and settle in the country

Many expats dream of moving to Portugal to improve their quality of life, get access to more affordable healthcare, and to own their dream home. Foreigners can own property in Portugal, although the process to secure the property of your choice is different than what you might be used to in your home country.

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Portugal Real Estate Purchase Process Overview

Here is a rough outline of what the real estate purchasing process generally looks like in Portugal:

 

  1. Understand your nice-to-haves vs. need-to-haves: Many potential buyers dream of certain types of properties with access to everything. In practice, finding the right property in Portugal for you often requires trade-offs. These can be difficult decisions. It can help to hone in on the right town/region to focus your energy, and the right homes to prioritize, to make a list of what is absolutely essential in your new home, vs. what would be nice but not necessary.
  2. Plan an exploratory trip: Before you make a big investment, make sure that you take the time to find the perfect spot for you and your family. We recommend taking at least one scouting trip, visiting multiple locations, and trying to spend as much time in several different places before purchasing a property.
  3. Work with a buyer’s agent: There is no MLS system in Portugal, which has created a more fractured, locally-driven real estate market. This can disadvantage buyers, specifically if they are not particularly familiar with how things work in Portugal. Agents may have incentives to push prospective buyers towards certain properties, whether they are right for the client or not. Buyer’s agents do receive property commissions, but typically do not represent specific properties they are promoting, and therefore represent the buyer’s interests. 
  4. Secure your NIF: You will need a Portuguese tax identification number (or NIF) to purchase property in Portugal. 
  5. View listings: This step can help you understand the market and narrow down your options. View a number of properties in your selected area at various price points. Be willing to wait if you do not find a place that meets your criteria. 
  6. Find a lawyer: It’s essential to enlist the services of a qualified real estate attorney. Your lawyer will help you navigate the purchase process and can ensure your purchase supports your visa process (if relevant).
  7. Put in an offer & negotiate: Your agent will help you make an offer on the property of your choice. Keep in mind that negotiating is expected. If the offer is accepted, you’re on your way! Some owners may accept financing deals.
  8. Initial research: Before signing any contract it is common for buyers to conduct initial research on the property and its legal status. That might involve verifying ownership, checking for any existing debts, and ensuring compliance with local regulations.
  9. Put down a deposit and sign a promissory contract: Typically you will now sign a promissory contract (contrato de promessa de compra e venda) which outlines the terms and conditions of the sale. While the promissory contract is a binding agreement, it usually includes clauses that allow the buyer to conduct further due diligence, including conveyancing checks.
  10. Conduct conveyancing checks: Your attorney will conduct a thorough examination of the property’s legal status, including searches at the land registry, municipal offices, and other relevant authorities to ensure clear title and identify any potential issues.
  11. Property inspection: This is the time to do an independent property inspection. If the buyer pulls out without cause, the owner keeps the deposit. 
  12. Sign the final deed and pay the balance of the purchase price: Once the conveyancing checks are complete, and both parties have fulfilled their obligations as outlined in the promissory contract, the final step is the signing of the final deed (escritura). This is the official transfer of ownership, and it occurs at a notary office. The notary ensures that all legal requirements are met before registering the property in the buyer’s name.
  13. Obtain a Certified Copy of the Deed: After the final deed (escritura) is signed at the notary office, you will receive the original deed. It’s essential to obtain a certified copy of the deed, known as a “Registo Predial,” which will be used for the registration process.

  14. Payment of Taxes and Fees: You must pay the applicable property transfer taxes (Imposto Municipal sobre Transmissões) and any other fees required. Ensure that all financial obligations related to the property transaction are settled.

  15. Register the deed with the Land Registry: Visit the local land registry office and submit the required documents, including the certified copy of the deed, the completed registration form, and proof of tax payments. Congratulations, you’re now a property owner in Portugal! 

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Things to Look Out For When Purchasing Property in Portugal

  1. Legal Due Diligence: Conduct thorough legal due diligence, ensuring the property has a clear title, and there are no outstanding debts or legal issues. Verify property boundaries, planning permissions, and compliance with local regulations.

  2. Working with Professionals: Engage with experienced professionals, particularly your real estate lawyer and buyers agent. They can provide valuable insights, review contracts, and ensure compliance with Portuguese property laws.

  3. Financial Considerations: Understand all associated costs, including property transfer taxes, notary fees, and legal fees. Factor in additional expenses such as maintenance costs, property taxes, and potential renovation expenses.

  4. Survey and Inspection: Consider conducting a thorough property survey and inspection to identify any structural issues or necessary repairs. This is especially important for older properties.

  5. Check Planning Permissions: Verify that the property has the necessary planning permissions for its current use or any intended modifications. This ensures compliance with local zoning laws.

  6. Energy Performance Certificate (EPC): Ensure the property has a valid Energy Performance Certificate, providing information on its energy efficiency. This is a legal requirement for property transactions in Portugal.

  7. Residency and Tax Implications: Consider the potential residency and tax implications of owning property in Portugal. Consult with tax advisors to understand the local tax obligations for non-residents.

  8. Contracts and Payment Terms: Carefully review all contracts and payment terms. Understand the obligations and timelines outlined in the promissory contract and final deed.

 

By addressing these considerations and seeking professional guidance, you can navigate the property purchasing process in Portugal more effectively and make informed decisions.

How to Transfer Money When Buying a House in Portugal

When making a large purchase in Portugal, buyers typically make international transfers.

 

There are two companies that we recommend using to make international transfers: RegencyFX and Wise.

 

RegencyFX is one of the fastest-growing, privately owned currency exchange companies in the world.

 

Regency FX is a simple, easy way to guarantee one of the best exchange rates on the market. RegencyFX assigns a dedicated account manager to each client, so it is a great option if you are looking for hands on, tailored support. You can learn more about RegencyFX HERE. StartAbroad has a partnership with RegencyFX, and may earn a commission on sales made through this platform. 

 

Wise is an excellent option if you have a  straightforward transaction to make. Wise offers excellent exchange rates, and is very easy to use. You will not receive any hands-on guidance or support, but it gets the job done quickly and easily.

 

Regardless of how you transfer money to Portugal, keep in mind that the receiving bank may take a commission. This is the responsibility of the buyer to cover. 

Is Financing Available for Expats Purchasing Property in Portugal?

Yes! Expats purchasing property in Portugal have several financing options available. It’s important to note that financing conditions may vary, and eligibility criteria can depend on factors such as residency status, income, and credit history. Here are common financing options for expats:

 

Local Banks in Portugal: Expats can explore mortgage options from local Portuguese banks. Many banks offer mortgages to non-residents, but the terms and conditions may differ from those offered to residents. It’s advisable to shop around and compare offerings from different banks.

 

International Banks: Some international banks with a presence in Portugal may offer mortgage solutions for expats. These banks might have a better understanding of the needs and financial situations of expatriates.

 

Specialized Mortgage Brokers: Engaging with specialized mortgage brokers who have experience with expat financing can be beneficial. These professionals can help navigate the mortgage market, identify suitable lenders, and assist with the application process.

 

Developer Financing: In certain property developments, developers may offer financing options directly to buyers. This could involve installment plans or other customized financing arrangements. It’s essential to review the terms carefully.

 

Equity Release: Expats who already own property in Portugal or elsewhere may explore equity release options. This involves using the equity in an existing property to fund the purchase of a new one.

Associated Costs When Purchasing Property in Portugal

  • Engineer/Inspection fees: ~€400

  • Real estate fees: fees paid on the seller’s side

  • Property transfer tax: ~6%

  • Stamp duty: 0.8% of property purchase price

  • Notary and other document fees: ~€750

  • Legal fees: vary

Buyer's Agents in Portugal

There are two typical models for buyer’s agents, commission-based and up-front fee

 

  • Commission model: The buyer’s agent splits the commission with the selling agent. Typically the commission is 5% shared between the two. This doesn’t cost the buyer anything, as you’d pay the 5% anyway. There are no penalties for backing out from a deal (although you may be asked to pay a refundable deposit to your agent). Your agent is incentivized to get you to buy any home quickly.

  • Up-front payment model: Some agencies charge a fixed price, typically around €5000. This raises the buyer’s cost, but some argue that it gives you access to the whole market, as some sellers’ agents don’t want to split the 5% commission. Your agent also won’t have the same incentive to push you toward a more expensive home quickly.

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