A little about the property market in Portugal and the practical and legal steps to purchasing real estate- read this it will save you lots of time and costs!

Guide to what paperwork to bring with you:

You will need your passport but presumably you will have that with you anyway!

Fiscal number

To obtain a fiscal number NUMERO DE CONTRIBUINTE (which you need to have before you can buy) you need an address in Portugal (this can be the address of your advogado or the estate agent) and for that you again need your passport.

Bank account

To open a bank account you need your fiscal number AND passport AND utility bills of your UK address with the name of each account holder and in the case of married couples a copy of the marriage certificate - or the womans birth certificate with maiden name.

Mortgage

For mortgage purposes you need proof of income which can be your P60's or last 3 months payslips or last 3 years accounts in the case of self-employed PLUS passport, utility bill, marriage certificate and fiscal number for each applicant.

Purchasing Real Estate

Once we've helped you find your ideal property and you wish to go ahead and buy it, you will have to sign a Contrato de Promessa de Compra e Venda (PROMESSA) which is a legal contract of sale. However, if the seller agrees, it is often possible to leave a small deposit (usually €500-€1000) with the selling agent to ensure the property isn't sold to someone else before you have had time to organise money transfers. This RETURNABLE deposit  also allows an agreed number of days to save you worrying, should you discover that fantastic property the day before you fly home! However please note that the deposit is kept by the estate agent as a finders fee should you decide not to proceed with the sale. It is also no guarantee that the property will not be sold to someone else should you delay longer than the time agreed with the owner.

Promessa

The Contrato de Promessa de Compra e Venda guarantees the purchase for you as it is a legally binding document stating the conditions of sale. It should always be drawn up by a solicitor or lawyer (ADVOGADO). You should ensure that you have a solicitor or lawyer who can explain the sale to you in your own language and / or one who offers a legal translation service. The whole sales process (including even getting your utilities connected) can be SIMPLIFIED if your lawyer is given a power of attorney (PROCURAÇÃO) which often saves you a lot of time and airfares, especially if you intend to have a portuguese mortgage. In many cases the power of attorney and the application for fiscal number can usually be done within 24 hours BUT NEVER AT THE WEEKEND or on PUBLIC HOLIDAYS!

Deposit

At the promessa stage it is normal for a deposit of between 10% and 20% to be paid. However be aware that if you drop out of the sale for any reason (other than inability to obtain a mortgage- the refusal of which you will have to prove) you will forfeit this money although the good news is that if the vendor decides to withdraw from the sale they are legally obliged to repay your deposit AND the same amount again!

Escritura

A date will be set for the signing of the final DEED, called the Escritura de Compra e Venda. This can be as quick as three or four weeks after the signing of the contract of sale, but your lawyer may need more time to run checks on the property to make sure there are no outstanding mortgages or unpaid taxes against the property for example, and check that all is legally in order. As long as you don't have a portuguese mortgage (in which case you must attend), you can either return to sign this document or allow your advogado 'power of attorney' enabling him to sign legal documents on your behalf.

Land Registry

n limited cases you may be exempt from paying this tax - ask your advogado for advice before you buy. As soon as you sign the final contract your lawyer will register the property with the Land Registry (CONSERVATORIA) in your name. Although this is an important document the CADERNETA PREDIAL can take a while to be sent to you, but they will provide you with a copy of this on request. The value shown on this document (VALOR PATRIMONIAL) is often alarmingly less than the price you will have paid, but don't panic (yes - we did at first!) as this is similar to the rates or council tax system in the UK and is the value the local council (CAMARA) uses to calculate your council tax (IMPOSTO MUNICIPAL sobre Imòveis).

IMTStamp duty

About a week prior to the final date of purchase you must pay a Municipal payment similar to UK stamp duty, named called Imposto Municipal sobre Transmissões (IMT) which as of the 1st of January 2003 replaced the previous tax payment named “SISA”. The current IMT percentages can be provided by any estate agent or lawyer. This IMT payment is paid in the tax office in the main town nearest to the property. The amount to be paid is a percentage of the cost of the property being purchased. Again, your advogado can handle this payment on your behalf if he has a procuração (power of attorney) for each of the declared buyers.

Commission

As the buyer, you don't have to pay commission to the estate agent - the vendor of a property usually pays commission to the estate agent. This is not a controlled percentage and it can vary from area to area and agent to agent, so this is sometimes why you see the same property at slightly different prices on different sites. Avoid the agents who have anything more than

Tax

If you purchase a property in Portugal with the intention of renting it out for parts or all of the year you will usually be liable to taxation on income and gains in Portugal and by law you need a fiscal (tax) representative if you are not intending to live here. Capital gains tax is paid on 50% of any gain if you are non-resident. Please ask your tax representative for the current CGT rate for non-residents. For residents capital gains is based on your income tax rate on 50% of the gain.

Easier than England!

As with any serious purchase the process can appear very complicated BUT it's actually safer than the buying process in England! With this guide in mind and a good lawyer and estate agent things can go very smoothly. Just remember you will be adding to the 200,000 Britons who already own property in Portugal which makes an amazing 11% of all Britons who own homes overseas!