Property purchase in the Algarve
Before the purchase
You should check the following details:
- Is the property registered in the name of the seller?
- Does the real estate register show any encumbrance or mortgage related to the property?
- Has the tax office issued a "Caderneta Predial" (a type of property pass)?
- Do residential buildings have a habitation license?
The provisional agreement
Before a real estate purchase is attested by a notary, you can sign a provisional agreement that obliges both sides to sale respectively purchase. The signatures of this agreement should be attested by a notary. The provisional agreement names buyer and seller, describes exactly the property, mentions the purchase price as well as the procedure of payment.
Land transfer tax (IMT)
Before signing the actual purchase contract the buyer has to pay the land transfer tax (IMT) at the local tax office just before the final deed. The transfer tax is based on the purchase price or patrimonial value (assessed value) of the property - whichever is the higher. The calculation of the IMT depending whether it will be your primary or secondary residence in Portugal. For rural land a flat rate of 5% is applied, for other purchases such as a commercial property or building plot then a flat rate of 6.5% is applied.
Stamp Duty (IS) When buying a property in Portugal, you will generally pay 0.8% of the purchase price. Stamp duty must be paid at the local tax office prior to signing the final deeds.
The purchase contract attested by a notary
The actual purchase contract has to be attested by a notary. The fees for this contract generally have to be payed by the buyer. The purchase contract establishes the official ownership. There is no conveyance provided.
Registration in the real estate register
With the attested purchase contract the transfer of the property can be registered in the real estate register.
For more information please contact us.