On finding a property in Portugal buyers will normally be asked for deposit of around 10% of the purchase price. This deposit is not passed to the vendor until the promissory contract is drawn up which will usually be around 30 days.

All buyers must have a fiscal number for completion which is easy to obtain from local tax offices and should be sought as quickly as possible.

If a mortgage loan has not been approved at this point it is important to start the process as quickly as possible as the promissory contract is binding and after signing the deposit monies will not be protected.

It is important to obtain the services of an independent legal adviser who prior to signing the contract will check the title deeds are accurate, the property plans meet those held by the local tax office, licenses are in place and that the building warranty for properties built since 2004 are in place.

Once all the checks are made the Promissory contract can be signed. A mortgage offer and survey of the property needs to have taken place prior to this to ensure deposit monies are secure.

Prior to signing; purchase tax “IMT” has to be paid these funds are taken at least 3 days before the signing of completion at Notary. The IMT costs can be as high as 8% dependant on purchase price. It is important the buyer understands and has these funds available as they cannot be taken from the mortgage amount as the mortgage will not be in place until completion day. Other taxes and costs applicable can be taken from mortgage funds at completion as long as the mortgage falls within the banks loan to value and loan to contract price stipulations.

Total additional costs of purchase in Portugal will b e in the region of 10% and include

Stamp duty property 0.80% of purchase price
Stamp duty loan 0.60% of loan size
IMT ascending rate based on purchase price
Notary and registry 0.50% of purchase price.

All purchases are signed at Notary.