16 Tips For Buying Property In Portugal
Buying property in another country either as a holiday home or as a permanent residence can be stressful, but with the right information it doesn't have to be. If properly followed, the following tips will help to take the stress out of buying property in Portugal:
1. Tourist Activity
One of the first things you should look at when looking to purchase a property in another country is the relationship between tourism and real estate. Current tourist activity, as well as the area's plans for development, will help you to understand if the property you are about to purchase will end up being a good return on investment or a waste of money.
2. Visit In The Off Season
You may have fallen in love with Portugal on your very first visit, and each time you've returned it has begun to feel like home, but if you have never visited in the off season how much do you really know about the area? Before you make any big decisions you need to first see what the weather is like in the off season as well as what kind of amenities are available after all the tourists go home.
3. Do Not Rush
When embarking on purchasing a house in Portugal you will eventually be required to sign a promissory contract. The contract required you to pay 10% non-refundable deposit of the agreed upon price up front. If for any reason you back out of the agreement you loose your 10%. So when looking for properties, take your time when it comes to making your decision, as a hasty one will end up costing you in the long run.
4. Visit The Property
It goes without saying that you should also visit the property in person and never buy only from that pictures that you may see on the internet. Besides visiting the property in person you should do it multiple times before you make a decision. What may look beautiful at dusk can look horrific during the full light of the day. You should also try to visit the property at different times of the year if the time permits.
5. Seek Local Advice
This can be everything from hiring a local solicitor to help you with all the legal documentation, to hiring a local translator to help you when it comes time to visit the Notary Office. You can even speak with local people in the neighborhood where you plan to purchase to get their take on the area and even the property itself.
6. Know Your Location
Many people looking to purchase overseas holiday properties typically strive for those on the water, whether it is on the ocean, riverside or on a lake. What many people don't know about Portugal is that in the rainy season, typically autumn through winter, water levels can rise dramatically. This can be disastrous for your property if you are not able to take precautions to protect it.
7. Current Infrastructure
When making your decision on which property to buy in Algarve, you want to use the current infrastructure as the deciding factor and not base it on any promises that are being made, such as new coastal roads, hospitals, markets, etc.
8. Make A List
Purchasing a property in another country is a huge decision, one that should not be taken lightly. Your best friend will be your checklist, or lists. You'll want to make an extensive list of both your needs and wants when it comes to your Portugal property. Think about what this property is going to mean to you is it a place to retire or just a vacation home? Whichever way you plan to use your property take a look at the proximity of al the amenities available.
9. Bank Accounts
One of the first things you will need to look into doing before you decide to purchase a property in Portugal is to open a local bank account. By having a Portuguese bank account you will be able to easily and quickly pay any bills or expenses that arise during the purchasing process.
10. Tax Number
Before you can even think about purchasing a property in Portugal you will first need to get yourself a tax number, or fiscal number as it is known. You can get one from the local tax office by showing your identification, which can be a residency card, identity card or passport. You must also have a Portugal address where the tax office can send your fiscal card. If you don't have one you can always have the card mailed to your solicitor's office.
11. Under Declaring
When it comes to declaring the value of your property for tax purposes make sure you do not under declare its value. Not only is it extremely illegal, but when it comes time to sell your property you must pay taxes on any profit that you make, which can be astronomical.
12. Debt Free Properties
In Portugal mortgages and debts are registered to the property, so before you sign the Deed of Purchase and Sale first ensure that the property is clear from any debt. And remember, until you have registered the property in your name debt can still be added and it will be your responsibility to pay it off.
13. Documentation
You will want to ensure that you are thorough with all documentation related to the sale. This includes following up to make certain the legal owner the person selling the property and what is being advertised is actually what is being sold. A local solicitor can help you with any legal documentation.
14. Property Tax (IMT)
When purchasing a property in Portugal you are required to pay property tax, or IMT (Imposto Municipal Sobre Transmisso Onerosa de Imveis), before the completion of sale. A proof of payment must be submitted to the notary when it comes time to sign the Deed of Purchase and Sale.
15. Deed of Purchase and Sale
To finalize the sale both the seller and the purchaser of the property must be present at the Notary office. After your solicitor has ensured all the proper documents are in order the purchaser and the seller will sign the Deed of Purchase and Sale. At this point you will be required to pay the remaining balance of the property before the property is considered now yours. After which you must register the property in your name at the local land registry.
16. Registration
It is very important to register your property at the local land registry immediately after the Deed of Purchase and Sale has been signed. Until the property is register in your name debts in the name of the previous owner can continue to be registered to your property. Worst of all, you will be responsible to pay it.
Buying property in another country is not always one of the easiest tasks to perform. However, with the right information, such as the 16 tips from above, buying property in Portugal does not have to be any more difficult than buying a property in your own backyard.
1. Tourist Activity
One of the first things you should look at when looking to purchase a property in another country is the relationship between tourism and real estate. Current tourist activity, as well as the area's plans for development, will help you to understand if the property you are about to purchase will end up being a good return on investment or a waste of money.
2. Visit In The Off Season
You may have fallen in love with Portugal on your very first visit, and each time you've returned it has begun to feel like home, but if you have never visited in the off season how much do you really know about the area? Before you make any big decisions you need to first see what the weather is like in the off season as well as what kind of amenities are available after all the tourists go home.
3. Do Not Rush
When embarking on purchasing a house in Portugal you will eventually be required to sign a promissory contract. The contract required you to pay 10% non-refundable deposit of the agreed upon price up front. If for any reason you back out of the agreement you loose your 10%. So when looking for properties, take your time when it comes to making your decision, as a hasty one will end up costing you in the long run.
4. Visit The Property
It goes without saying that you should also visit the property in person and never buy only from that pictures that you may see on the internet. Besides visiting the property in person you should do it multiple times before you make a decision. What may look beautiful at dusk can look horrific during the full light of the day. You should also try to visit the property at different times of the year if the time permits.
5. Seek Local Advice
This can be everything from hiring a local solicitor to help you with all the legal documentation, to hiring a local translator to help you when it comes time to visit the Notary Office. You can even speak with local people in the neighborhood where you plan to purchase to get their take on the area and even the property itself.
6. Know Your Location
Many people looking to purchase overseas holiday properties typically strive for those on the water, whether it is on the ocean, riverside or on a lake. What many people don't know about Portugal is that in the rainy season, typically autumn through winter, water levels can rise dramatically. This can be disastrous for your property if you are not able to take precautions to protect it.
7. Current Infrastructure
When making your decision on which property to buy in Algarve, you want to use the current infrastructure as the deciding factor and not base it on any promises that are being made, such as new coastal roads, hospitals, markets, etc.
8. Make A List
Purchasing a property in another country is a huge decision, one that should not be taken lightly. Your best friend will be your checklist, or lists. You'll want to make an extensive list of both your needs and wants when it comes to your Portugal property. Think about what this property is going to mean to you is it a place to retire or just a vacation home? Whichever way you plan to use your property take a look at the proximity of al the amenities available.
9. Bank Accounts
One of the first things you will need to look into doing before you decide to purchase a property in Portugal is to open a local bank account. By having a Portuguese bank account you will be able to easily and quickly pay any bills or expenses that arise during the purchasing process.
10. Tax Number
Before you can even think about purchasing a property in Portugal you will first need to get yourself a tax number, or fiscal number as it is known. You can get one from the local tax office by showing your identification, which can be a residency card, identity card or passport. You must also have a Portugal address where the tax office can send your fiscal card. If you don't have one you can always have the card mailed to your solicitor's office.
11. Under Declaring
When it comes to declaring the value of your property for tax purposes make sure you do not under declare its value. Not only is it extremely illegal, but when it comes time to sell your property you must pay taxes on any profit that you make, which can be astronomical.
12. Debt Free Properties
In Portugal mortgages and debts are registered to the property, so before you sign the Deed of Purchase and Sale first ensure that the property is clear from any debt. And remember, until you have registered the property in your name debt can still be added and it will be your responsibility to pay it off.
13. Documentation
You will want to ensure that you are thorough with all documentation related to the sale. This includes following up to make certain the legal owner the person selling the property and what is being advertised is actually what is being sold. A local solicitor can help you with any legal documentation.
14. Property Tax (IMT)
When purchasing a property in Portugal you are required to pay property tax, or IMT (Imposto Municipal Sobre Transmisso Onerosa de Imveis), before the completion of sale. A proof of payment must be submitted to the notary when it comes time to sign the Deed of Purchase and Sale.
15. Deed of Purchase and Sale
To finalize the sale both the seller and the purchaser of the property must be present at the Notary office. After your solicitor has ensured all the proper documents are in order the purchaser and the seller will sign the Deed of Purchase and Sale. At this point you will be required to pay the remaining balance of the property before the property is considered now yours. After which you must register the property in your name at the local land registry.
16. Registration
It is very important to register your property at the local land registry immediately after the Deed of Purchase and Sale has been signed. Until the property is register in your name debts in the name of the previous owner can continue to be registered to your property. Worst of all, you will be responsible to pay it.
Buying property in another country is not always one of the easiest tasks to perform. However, with the right information, such as the 16 tips from above, buying property in Portugal does not have to be any more difficult than buying a property in your own backyard.
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