Despite being one of the oldest overseas property destinations, Portugal still has a huge amount to offer British buyers. The traditional Algarve is one of the best golfing regions in the world, while the Silver Coast north of Lisbon has managed to attract more buyers recently, while still keeping its character and some beautiful fishing villages intact. Further north is the Green Coast, with dramatic Atlantic coastlines and some of the best-value property in the whole of Portugal. The risk in buying Portuguese property is low, and building and construction in Portugal is more regulated than some foreign markets giving investors greater peace of mind. A country steeped with history and culture, it is hard not to absorb the Portuguese relaxed way of life, with markets overflowing with fish, fruit and flowers, traditional folk festivals and restaurants offering the best in local food and wine.
When purchasing property in Portugal it is important to ensure that any plans in the Town Hall referring to the property do physically agree with the existing construction. All property constructed after 1952 must have a habitation licence, a certified insertion in the records of the Land Conservatory and detailed “Caderneta Urbana” from the Tax Office.
It is normal for both parties to initially enter into a Promissory Contract detailing the conditions of sale – “Contrato de Promessa de Compra e Venda”. This contract is then legalised by registering it at the notary office. This contract is legally binding on both sides and the law requires the seller to repay twice the deposit should he withdraw from the sale. Likewise, if the buyer fails to complete, they forfeit the total of the deposit.
As a property owner, you are required to obtain a Fiscal Number from the local tax office (Finanças). Prior to the act of purchase, the purchase will usually be subject to a State payment called “CEMI” which is carried out in the local tax office nearest to the property. The amount charged is dependent upon the nature of the purchase and does vary. In certain cases the buyer may be exempt from paying this tax.
With the above requirements complete, a sale can proceed in any Notary Office. This act is known as the “Escritura de Compra e Venda” which takes place in front of the selected notary and is recorded in the official books. The notary will check prior to the act of sale that all the necessary documents are correct to ensure that the sale can proceed according to the facts provided. It is at this moment that payment is normally forwarded to the seller. After the sale is recorded the notary office will issue a photocopy of the entry, which is the proof to the buyer that the act has officially taken place. The photocopy will carry the seal of the notary but, as further official copies can be requested at any time, this document should not be mistaken for a “Title Deed” – as known in the UK.
On completion of the above act, the property in question has then to be registered in the new owner’s name in the land registry (Conservatória do Registo Predial). This next registration is not obligatory until the owner wishes to sell the property. However, it is strongly recommended that the previous owner make this registration immediately after the notary’s act as a preventative measure against possible financial abuse.