Completing a Purchase in Portugal

When your offer has been accepted your estate agent will ensure all the necessary paperwork and legal documents are prepared and a preliminary contract can be signed that is conditional on the surveys and searches being satisfactory. At this time a deposit is paid with the remainder being paid when the final contract is signed on completion.

It is important that you employ the services of an independent, local lawyer to
secure your legal rights and to guide you through the buying process.

Money Matters

The buyer pays all purchase costs, include notary fees (2.5%), Land Registry fees and transfer tax (IMT, payable on property over €80,000 and – depending on the property value – is usually between 2% and 8%). You will also need a NIF (tax ID number), which your lawyer can apply for on your behalf if you don’t fancy the bureaucratic process of having to take various documents to the tax office.

Your solicitor’s fee will be up to 2% of the purchase price.

Rental and maintenance

If you intend to let out your property, it must be fully-furnished to a good standard. Rather than face the expense of shipping heavy items over, buy everything locally.

No matter how well-behaved your tenants, the property will see a certain amount of wear and tear if you are letting it out for short periods to holidaymakers, so budget in for repairs and regular renovation.

Furniture Packages Portugal

If you are going to rent the property out or solely use it yourself then why not use a good furniture package supplier.

Also budget for slow periods out of season. June to August is peak season for holiday lettings and you are almost guaranteed occupancy, and in some areas, particularly those with golf courses, you will find a healthy year-round rental market. Villas beside golf courses can be let for around £850 a week in peak season and £500 a week in winter. But don’t forget to budget for mortgage repayments in periods when the property is empty.

If you are letting the apartment or villa out on a holiday basis while still living in the UK, you will need to employ a good, reputable property agent to supervise tenancies.

The agency can keep the property free for your own use at specified times. You can also ask them to deal with minor repairs.

The agent’s fee is another thing you must budget for, ranging from €60 a month for a two-bed apartment to €200 a month for a four-bedroom villa. Get your contract with the lettings agent checked by a lawyer (advogado).

Security is an important issue with buy-to-let properties. Install new locks and keep tabs on all copies of keys. If your property is in a quiet, rural area, an alarm may be of little use if no one is around to hear it, so think about finding someone you can trust to keep an eye on the property.

Although you do not need to register your property as a rental property with the local tax authority, you will have to pay tax on your rental income. Non-residents or offshore companies pay 25% of the rental income (residents pay up to 40%, subject to Portuguese income tax). Seek the advice of a good accountant.