Purchasing in Portugal
1. The power of attorney
The power of attorney is given to lawyers and it allows to give all the necessary authorities to lawyer to make the purchase of property and other related services (for example: connection to water mains, gas and electricity, ask the tourist license for your property).
2. Fiscal number.
Non-resident buyers must have Portuguese financial representative. It may be companies which can be responsible for all your tax cases in Portugal if you decide to take them as financial representative in Portugal.
3. Promissory notes of the contract.
The document is prepared by the lawyers, that includes parties definition, property identification, price and payment terms, completion date and punitive damages in case of breach of the contract. The counsel will check if the property has all the documents that allows to transfer property to the supplier without a down payment. In Portugal you can also sign only the debt contract and after that residence permit is given.
4. Taxes are paid before the completion of the purchase. Stamp duty of 0.8% of the value of the property. As for IMT, look FAQ. Stamp duty, definition: it responds to different contracts, documents and affairs and has variable rate. IMT, definition: it is a tax, charging every time when a transfer ownership of the property occurs.
5. Business
A document is made by the notary and gives a right of ownership of the property. The notary should check if the property has all the documents to allow the transfer of it. The parties will sign this document.
6. Registration.
Gives the right of ownership in the Management of land registration and Tax administration.
IMT (*) Imposto municipal Sobre a Transmissão Onerosa de Imóveis
Agricultural land 5%
Others (building, land, offices, ..) 6.5%
Villas and apartments in the following way:
Secondary housing / non-Residents % discount
Up to € 92,407 1 ——
From € 92,407 to € 126,403 € 2 924,07
From € 126,403 – € 172,348 € 4.716,16 5
From € 172,348 to € 287,213 € 8.163,12 7
From € 287,213 to € 550,836 € 11.035,25 8
Over € 550,836 6 ——
For example:
For one of the secondary housing: € 500,000 * 8% – 11.035,25 € 28.964,75 € =
For one of the secondary housing: € 700,000 * 6% = € 42.000,00
IMI (*) Imposto municipal Sobre Imoveis
The percentage used for new apartments is 0.4% of the patrimonial value.
The generic values are calculated by the tax service taking into account several points, namely: the area of the apartment, location, infrastructure, solar panels etc.
Power of attorney
To be valid in Portugal, powers of attorney must be made in Portugal. In case it is signed abroad it must have signatures recognized by notary public and apostil in accordance with the Hague Convention, signed 5 October 1961 the Ministry of foreign Affairs.
Counsel / Lawyer Provides legal support throughout the proceedings.
Deals with all government institutions, namely with the Land Registry, the Department of Finance and the notary.
Income tax in Portugal Rental income for residents and non-residents = 28%
Capital gains tax on the inhabitants = progressive tax rate (10,5% to 42%) to 50% of capital gain (sales price – purchase price – deductible expenses [IMT, registration, ..]).
Capital gains
Tax on non-residents = 28% of capital gains (sales price – purchase price – deductible expenses [IMT, ..]) failure
The information is General and refers only to persons, and are advised to ask for legal advice before any purchase
