How to buy property in Portugal
Spending time with family and loved ones in your own home in the sun is a dream many people have… but if you’re ready to turn it into a reality, what is the process and what financial considerations, apart from the property, need to be allowed for?
The buying costs work out to be a percentage of the property price, normally between 8-10%. For example, with a property priced at €350,000, you should be budgeting 7.6% in addition to the price of the property - this includes transfer taxes, lawyers’ fees, notary and registration fees and the stamp duty.
The buying procedure is normally done in 3 stages - Reservation, Promissory and Final Deed. On average this can all take between 1 and 4 months.
Reservation – once you have found your perfect property and agreed a price both parties are happy with, you will appoint a lawyer and be asked to put down a reservation fee of around €6,000 - €10,000. This is fully refundable and stays in your lawyer’s account, not with the vendor.
The reservation shows the vendor that you are serious about the purchase and they will normally agree to remove the property from the market for 2-4 weeks so that the lawyers can carry out legal checks on the property - documentation etc…
Promissory Contract – this is the second stage and the first legal contract signing. At this point, the purchase/sale is legally binding for both parties. Under Portuguese law, should the buyer withdraw from the purchase they lose their entire deposit. If the vendor pulls out, then the vendor has to pay double the amount of the deposit to the buyer.
A 10% - 30