Algarve Sun Homes

Deeding Costs

IMT (imposto municipal sobre transmissões de imóveis) tax.

This is the property purchase tax that is paid normally before the final deed and works on a sliding scale,

i.e. purchases from…..

Value of property (Permanent residents)                                                 

                                               Applied Rate                Deduction      

Up to €85,500                                1%                                  Nil

€85,500 to €117,200                      2%                               €  1,710

€117,200 to €159,800                    5%                               €  5,226          

€159,800 to €266,400                    7%                               €  8,422

€266,400 to €532,700                    8%                               €11,086 

Over €532,700                               6%                                    Nil

Example:    €225,000 x 7%= €15,750 – €8,422 = € 7,328

Value of property (Holiday homes)

                                               Applied Rate                 Deduction

Up to €85,500                                1%                                   Nil               

€85,000 to €117,200                      2%                               €     855 

€117,200 to €159,800                    5%                               €   4,371        

€159,800 to €266,400                    7%                               €   7,567

€266,400 to €532,700                    8%                               €  10,231

Over €532,700                               6%                                    Nil

Example:    €225,000 x 7%= €15,750 – €7,567= €8,183

Notary Fees;

From €200 to €400 depending on the purchase price, the notary is the person who has the power to issue the deeds and ensure all the legal requirements are met under Portuguese law in the transfer.

Stamp Duty;                                                       Legal Fees;

 0.85% of the purchase price.                  Normally these can be up to two percent.

Fiscal Number;

This is something you need to have and is easily arranged by your solicitor.

Promissory Contract;

This is a document that has the agreed price, payment conditions, time to completion etc. and that both parties legally agree to fulfill their part. 

Your solicitor will also advise you if you wish on things like capital gains tax and rental income tax. They will take care of everything for you to ensure your purchase is a smooth and simple transaction.

Note: all costings can be subject to change by national and local government.

The Buying Process

1. Reservation

After you have selected a property a reservation fee is collected, +/- 5% to take the property off the market pending the sale and purchase contract.

2. Promissory Contract

On or before the contract you will already have a local solicitor of your choice representing you

In the transaction, a further 5% to 15% of funding will be required to meet the agreed deposit to go to contract. At Time of the property transfer (Escritura) the balance of the purchase price will be due.

3. Lender

The bank will require income and tax statements along with other documents for the loan process.

A valuation of the property will be carried out by the bank to determine the value of the property.

Note: A typical Mortgage is at 80% of valuation amortized at a maximum period up to the eldest buyers 70 or 75^th birthday depending on the lender.

4. Notary

A date will be set to appear before the notary, if you can not attend your solicitor may represent you with a pre arranged Power Of Attorney.

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