1- CERTIDÃO DE REGISTO PREDIAL (property registration certificate)
Shows who the registered owner of a property is and if there are any outstanding loans/mortgages on the property, as well as details of the property like constructed area, plot size etc. Obtainable from the Conservatoria do Registo Predial (land registry office). Valid for 6 months.
2- CADERNETA PREDIAL (tax/financial registration)
This document issued by the Finanças (tax/finance department) shows the financial registration of the company and the rates and taxes payable by this property to the local council.
3- LICENÇA DE HABITAÇÃO / UTILIZAÇÃO (habitation license)
Issue by the Camara (town council) shows that the property has been built according to the approved plans and for the purpose of habitation, for other purposes, it will be called Licença de Utilizaçao. No property can be sold without it.
4- FICHA TÉCNICA DE HABITAÇÃO / B.I. (technical file)
This new requirement has been in place since 2004 and is the detailed file of the property construction, suppliers, materials used, and all the technical data of the construction process. This document is provided by the Constructor (builder)
5- CERTIFICADO ENERGÉTICO (Energy certificate)
The energy certificate is a mandatory document by law for all properties in promotion with a sale or lease destination, available in PDF format, which informs the consumer about the energy class of the property, what components and their performance, what measures improvement to reduce energy consumption and possible tax benefits and access to finance. This document is carried out by a certified expert.
6- NUMERO DE CONTRIBUINTE (fiscal tax number)
To be able to buy or sell property in Portugal you need to get a fiscal number. You can get this anytime at the Finanças (local tax office)
7- CPCV - Contrato de Promessa de Compra e Venda (promissory contract)
Price agreed, documents in order, both parties in the presence of a Notario (notary) must sign a CPCV (promissory contract). Normally the buyer pays a 10% to 30% deposit to the seller. In this contract, terms and conditions are set out. The Portuguese law is clear: if the buyer defaults, he will lose his deposit to the seller; if the seller defaults, he must return the deposit paid to him in double to the buyer.
8- ESCRITURA ( final deed)
Must be done in a Notário (notary)
All conditions set out on the CPCV (promissory contract) have been fulfilled, you now get the full payment, and the buyer takes the transfer of the property.
What are capital gains?
Capital gains are the profits you make when you sell an asset, such as a property. In Portugal, capital gains on property are taxed at a progressive rate, depending on your income tax bracket.
What has changed for 2023?
Prior to 2023, non-resident property owners in Portugal were taxed on their capital gains at a flat rate of 28%. However, from 1 January 2023, non-resident property owners will be subject to the same progressive tax rates as resident property owners. This means that non-resident property owners with higher incomes will pay a higher rate of capital gains tax.
How are capital gains calculated?
To calculate your capital gain, you deduct the acquisition cost of the property (plus any associated expenses) from the sale price. You then multiply this figure by 50%, as only 50% of your capital gain is taxable. The resulting figure is then added to your other income and taxed at the progressive income tax rates.
What are the tax rates for 2023?
The Portuguese income tax rates for 2023 are as follows:
What are the main reliefs available?
There are two main reliefs available for capital gains on property in Portugal:
What if I am a non-resident property owner?
Non-resident property owners in Portugal are subject to the same capital gains tax rules as resident property owners, with the exception that they cannot claim main residence relief.
Can I avoid capital gains tax on property in Portugal?
There are a few ways to avoid capital gains tax on property in Portugal, but these are generally only available to non-resident property owners. For example, if you sell your property to a Portuguese resident, you may be able to defer capital gains tax on the sale until the Portuguese resident sells the property. Alternatively, if you reinvest your capital gains in a Portuguese property investment fund, you may be able to avoid capital gains tax altogether.
Conclusion
The capital gains tax rules in Portugal are complex and can change frequently. It is important to seek professional advice before selling a property in Portugal to ensure that you are aware of the latest rules and regulations.
We hope this information was useful!
If you still need more information about selling property in Portugal please email us, info@algarveproperty.com, we are committed to providing you with the solutions, service and support to help you succeed online, in your search for your dream property in the sunny Algarve.
This presentation serves only as a guide, for your information. You should always appoint a good lawyer to represent you. We hope that you now have a better insight into the property selling process in Portugal and the Algarve
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