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Marcela Premium’s Top Tips

22.06.22

If you are planning to buy a property in Portugal, make sure you have a good understanding of the legal system and its procedures. We suggest strongly, before you sign any contract, to consult the services of a local lawyer/solicitor/mortgage advisor. They will be able to advice you properly and analyse all the documentation you might need (mortgage, charges, licences, taxes etc) and can act on your behalf. At Marcela Premium, we always make sure all the documents of the property are in place, before we put it for sale.

Step 1 Contract of Sale & Deposit

The solicitor will draw up a Contract of Sale (Contrato de Promessa de Compra e Venda) which is a legally binding document setting out all the conditions of the sale. It is drawn up by a Notary and will eventually be signed by all parties and their legal representatives.

On the day the  Contract  of Sale is  signed the buyer will be required to  pay the  agreed deposit (usually between 10% and 20% of the purchase price). For new properties under construction the payment terms are made in stage payments  as the  construction  is completed.  These terms are negotiated  with the  estate agent or  builder. It  is advisable  to pay the deposit cheque to the agent, lawyer or broker representing you, and not the vendor. The deposit is held by the agent until completion.

The drawing up of a contract indicates a legal intention to purchase and sell. If the seller decides to withdraw from the sale they are legally obliged to repay twice the deposit paid. If the purchaser decides to drop out of the purchase they lose the deposit.

Step 2: Obtain the Deeds Certificate

Once a property has been found, the lawyer representing the client will obtain a Deeds Certificate (Escritura) from the Land Registry confirming that the property is available and for sale. Make sure the solicitor has the Escritura.

Step 3: Contract of Sale & Deposit

The solicitor will draw up a Contract of Sale (Contrato de Promessa de Compra e Venda) which is a legally binding document setting out all the conditions of the sale. It is drawn up by a Notary and will eventually be signed by all parties and their legal representatives.

On the day the Contract of Sale is signed the buyer will be required to pay the agreed deposit (usually between 10% and 20% of the purchase price). For new properties under construction the payment terms are made in stage payments as the construction is completed. These terms are negotiated with the estate agent or builder. It is advisable to pay the deposit cheque to the agent, lawyer or broker representing you, and not the vendor. The deposit is held by the agent until completion.

The drawing up of a contract indicates a legal intention to purchase and sell. If the seller decides to withdraw from the sale they are legally obliged to repay twice the deposit paid. If the purchaser decides to drop out of the purchase they lose the deposit.

Step 4:Pay the Property Transfer Tax

Once all the legal checks have been made and before the contracts are exchanged, the property transfer tax (Imposto Municipal sobre Transmissoes, which replaced SISA in 2003) must be paid. The lawyer representing the client will deal with this at a tax office nearest to the property in question. How much is paid depends on the value of the property and type of property.

 

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