Property Investment

 

Buy property In Portugal

The Process

Buying property in Portugal is easy with proper advice and guidance. Oceanico can help you to find:

  • The right legal advice to ensure legal and planning enquiries are conducted and a proper private contract negotiated
  • The right tax advice on the most tax efficient way to structure the acquisition of the property
  • The best mortgage advice from our panel of International and Portuguese lending partners, offering exclusive terms for Oceanico clients

These are the 4 short steps to owning your own place in the sun with Oceanico.

Step 1 – Reservation

Complete a Reservation Form and pay a Reservation Deposit. This procedure allows the client to reserve the desired property for a limited period (basically until a contract is signed).

Step 2 – Inspection Visit

An inspection visit is designed to introduce clients to Oceanico's developments, properties and hospitality first hand and possibly confirm their decision to continue with Oceanico. These events are low key and offer the client the freedom to enjoy their time in Portugal and explore the local area.

We ask that clients book and pay for their own flights upon which we will provide a maximum of two nights' accommodation in the resort of interest plus airport transfers. We are also happy to arrange a complimentary round of golf on one of our seven championship courses in the Algarve or a spa treatment*.

* Subject to opening

After your visit to Oceanico's developments the remainder of the time is yours.

Step 3 – Contract

The details previously given on the Reservation Form, together with the terms of purchase are then included on a simple contract with an English translation, in order that all parties understand the formal buying process. A copy of this is forwarded to the client and their chosen lawyer. Upon signing the contract, an agreed deposit, normally 20% will also be required and the purchaser will be then legally bound to purchase the property. Some contracts may include stage payments, where properties are under construction.

At this point, it is important to note that a non-resident can purchase property without the assistance of a Lawyer or Solicitor; however it is highly recommended that one is used. The lawyer will then have the obligation to obtain, amongst other things, the following:

  • Confirmation of the correct identity of the Vendor
  • Precise description of the Property
  • Confirmation of clear title of the Property
  • Confirmation of the payment terms (including, if applicable, stage payments)
  • Date of completion of sale
  • Confirmation of applicable terms if the contract is breached

The Lawyer will also perform an analysis of all the relevant paperwork and execute the necessary searches to ensure that there are no outstanding debts and that the Property's utilization license is in conformity with both the description of the Property and the use that will be given to it.

Step 4 – Deed and Registration

Once your property is complete, a Deed (Escritura) is booked in a public Notary and the property is transferred to you on payment of the final balance due. The property is then legally yours!

The Transfer Deed for the Property (Escritura) is signed by the Vendor and the Purchaser (or by a Lawyer or Solicitor to whom powers of attorney have been granted by the Purchaser) at a Notary Office, in the presence of a Notary.

The Notary is an impartial public official who attests that the Property has all the documentation in place and that the Vendor is really its owner and then acknowledges that the price has been paid by the Purchaser.

If a Lawyer is not used, and unless the buyer understands Portuguese, the Notary will always insist on a verbal translation into the client's tongue, done by a capable translator.

Following the deed (Escritura) your Lawyer will arrange to have it registered in the local Land Registry Office. This normally takes just a couple of weeks.

Taxes and other costs

Fiscal Representation

Portuguese fiscal law requires that any non-resident should appoint a Fiscal Representative which will undertake to represent the purchaser before the Portuguese Tax Authorities.

Property Transfer Tax (IMT)

Property transfer tax (Imposto Municipal sobre as Transmissões Onerosas de Imóveis or IMT) is levied on the price of the Property or on its fiscal value if higher. The tax is due before the signature of the Deed.

At the Amendoeira Golf Resort and at Belmar Spa & Beach resort, (for properties located in blocks C, D and E), the purchasers are exempt from paying IMT. This tax exemption must be recognized in any Fiscal Services Office (Serviços de Finanças) prior to going to deed.

Annual Property Tax (IMI)

Annual Property Tax (Imposto Municipal sobre Imóveis or IMI) is payable annually on the fiscal value of the property at rates varying from 0.2% to 0.5%, depending on the location of your Property.

At the Amendoeira Golf Resort the property is exempt from this tax for 7 years from the date of purchase. At Belmar Spa & Beach resort, properties in blocks C, D and E are similarly exempt and Oceanico is in negotiation to secure this 7 year exemption for Block A and B.

Stamp Duty

Upon the signature of the Transfer Deed (escritura), Stamp Duty is also payable, at 0.8% of the purchase price.

Notary Fees

You should expect a cost of around €250 (fees may vary).

Registration fees

After the transfer deed is signed, the purchaser must register his acquisition in the local Land Registry Office. This has an administrative cost of €250 (unless the purchaser finances his purchase through a bank loan, in which case the mortgage also has to be registered, increasing the registration fees to €500).

Lawyer's fees

The normal charge should be between 1 and 2 percent of the property price, although it is not uncommon for some lawyers to charge a fixed rate.

Final Notes

Notwithstanding the above, in all fiscal and legal matters, we strongly recommend interested parties to seek independent legal advice.

Please request our list of independent Lawyers and Solicitors that have represented our clients in the past. You can also browse through the following sites for other Lawyers and/or Solicitors:

Also note that Oceanico does not hold an interest in any particular mortgage lender and will always look to recommend a product which we believe to be in the best interests of our clients.