As in many countries the world over, the first step in the real estate purchase process in Portugal is the execution of a preliminary contract for sale. This is called the contrato de promessa de compra e venda. It is a legally binding contract that sets out the conditions of the sale.
The contrato de promessa de compra e venda is drawn up by a notary. At the time that this contract is executed and signed, the purchaser will need to pay a deposit. This is normally between ten and twelve percent of the purchace price.
"If the purchaser decides not to go through they will forfeit the deposit. There are exceptions, for example, if a seller cannot provide to the buyer a title free and clear, the buyer then does have the right to walk away without losing their deposit.
In Portugal, if the seller decides to walk away from the contract, they will be obliged to pay a penalty to the buyer which is twice the amount of the deposit. Because of this, purchasers are provided with a very high level of protection. This kind of level is found in very few other countries around the world.
The buyer must obtain a "Fiscal Number" from the local Tax Office. This applies to foreign nationals who are interested in buying real estate in Portugal as well as to citizens of that country. This process is very simple and involves completing a short form.
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The real estate sales process in Portugal moves at a pretty fast clip. The signing of the final contract and deed (the escitura de compra e venda) generally happens within three to four weeks of the initial contract for sale. The ownership of the real estate will then transfer from the seller to the buyer.
The final step is the payment of the Imposto Municipal Sobre (a tax imposed on real estate transactions). The buyer will also be obliged to register the deed with the Land Registry Office.
The rules, regulations and legal schemes that apply to citizens of Portugal apply similarly to foreign buyers.
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