1- CERTIDAO DE TEOR (property registration certificate)
Shows who the registered owner of a property is, if there is 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).
2- CADERNETA PREDIAL (tax/financial registration)
This document issue 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 HABITABILIDADE (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- BI (ficha tecnica)
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 Construtor (builder)
5- NUMERO DE CONTRIBUINTE ( fiscal tax number)
To be able to buy property in Portugal you need to get a fiscal number. You get this anytime at the Finanças (local tax office)
6- 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 loose his deposit to the seller, if the seller defaults, he must return the deposit paid to him in double to the buyer.
7- IMT- Imposto Municipal sobre Transmissoes (ex SISA)
This is a tax applicable to property transactions, payable at Finanças (local tax office). The receipt must be produce for the final deed. The amounts payable vary with the price and type of the property, in a complex formula:
- Rustic property pays 5% flat rate
- Commercial property or land for construction a flat rate of 6%
- Off-Shore companies pay a flat rate of 15%
Value of the normal residential property transaction:
- under € 83.500 % of Tax - 0% Amount to deduct - € 0
- from a € 83.500 until € 114.800 2% € 1.670
- from a € 114.800 until € 156.500 5% € 5.114
- from a € 156.500 until € 260.900 7% € 8.244
- from a € 260.900 until € 521.700 8% € 10.853
- over € 521.700 6%
8- ESCRITURA ( final deed)
Must be done in a Notario (notary) You take final transfer of the property into your name, all conditions set out on the CPCV (promissory contract) will have been fulfilled.
9- REGISTO (registration)
After the final deed, you must now register your property in the Conservatoria do Registo Predial (land registry office) and Finanças (local tax office).
THE COSTS
The total costs associated with the investment on a property in the Algarve – Portugal, are up to 10% of the price, made up as follows:
1% to 2% lawyers
1% to 3% notary and registration
0% to 6% IMT (sisa)
The seller normally pays agent’s fees
You do not have to do any of this paperwork, we do it all for you, for free, but please remember we are not lawyers, so we recommend you use a good lawyer to represent you.
This presentation serves only as a guide, for your information. We hope that you now have a better insight into the property buying process in Portugal and the Algarve.
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