It is very important that when you buy property in Portugal that you understand the process completely. For anyone that is buying property in Portugal it is essential that you hire a lawyer to make sure that all the legal documents are in order. It doesn’t matter if it is boundaries and rate values, property size (caderneta urbana), building regulation compliances (habitation license), title deeds or other documents or deeds that may be necessary.
Once all the paperwork is in place there is a Fiscal Number issued by the local tax office. This is also the place where the seller and the purchaser agree on all terms. The buyer will also make the down payment here, generally this is 30% of the purchase price. Both parties will also sign the final contract here once all the terms have been mutually agreed upon. This has to be done in the presence of the Notary Public. The purchase price will also be paid here.
The Land Registry then records everything with the notary. The caderneta urbana is filled with the tax office as well. Whenever you are buying a property in Portugal all taxes and fees are payable including the agent’s fee. This is generally between 3% and 5%. This will include the transfer tax which can go up to 6%.
The fees that have been listed are important though they are not the only fees involved. Property in Portugal can also include surveyor fees, mortgage fees and legal fees. The total amount of fees is generally dictated by the fiscal value of the property that is being sold. That is actually a lower cost than the purchase price so that taxes are lower.
Recently Portugal recalculated the fiscal value of most properties. Buyers that declare a price that is lower than market value could end up facing stiff penalties. This is the only way that authorities know of to stop people from declaring the resale value of property for less then what it actually was. Capital gains taxes can be drastically reduced by this illegal practice.
Even though the consequences are obvious, there are some private vendors that will still encourage people to do this. This can be a deal breaker for some when it comes to buying property in Portugal, it is essential to remember that it is illegal. Even if you think you can get away with this remember you won’t. In the end you will end up paying a higher capital gains tax when you go to sell the property.
If you dream of property in Portugal, then go to google and Search “Portugal Property”. The company at the top of Google is likely to be an authority website, and there you will find all about Portugal properties for sale.
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