Here are the basic steps to help understand the procedures and legal acts that are involved in acquiring a property in Portugal. It is always recommended that qualified legal advice be sought in any purchase.

Use a Government Licensed Estate Agent.

This license is granted by the State according to a number of required qualifications on the part of the Estate Agent. It mainly serves as a guarantee that any individual Estate Agent must use certain forms of approved documentation to implement his functions in his profession. The Licensed Estate Agent is also bonded by the State in the form of an Insurance Cover that may be claimed against in the case of proven dispute.

It is quite normal for both Parties to initially enter into a Promissory Contract detailing the conditions of Sale - "Contrato de Promessa de Compra e Venda". This Contract is then legalized by registering it in the Notary Office. This Contract is legally binding on both sides and the law requires the seller to repay twice the deposit should he withdraw from the sale. Likewise, if the buyer fails to complete he forfeits the total of his deposit. There are specific laws relating to this act that a Lawyer will be able to explain.

It is often found practical for the buyer to appoint a third party such as their Lawyer to act for them legally in the matter. A document named "Procuração Publica" is prepared with the necessary details and then in the Notary Office this document is signed and registered by the Notary. This official document can also be created in the Portuguese language outside Portugal in a Portuguese Consul in a foreign country, or, in a Notary in the language of the country concerned. In the case of the latter the document must have the Seal of the Notary and an Apostil attached. An official translation into the Portuguese language will later be necessary.

Every buyer is required to obtain a Fiscal Number from the local Tax Office (Finanças).

Prior to act of purchase, the purchase will be subject to a Municipal payment named "IMT - Imposto Municipal sobre Transamissões" which from the 1st of January 2003 replaced the previous tax payment named "SISA". This payment is paid in the local Tax Office nearest to the property. The amount to be paid is related in terms of percentage by "platforms" to the cost of the property being purchased. In limited cases the buyer will be exempt from paying this Tax.

When all the above requirements have been completed the act of sale can proceed in any Notary Office. This act is known as the "Escritura de Compra e Venda" which takes place in front of the selected Notary and is recorded in his official books. The Notary will check prior to the act of sale that all the necessary documents are correct to ensure that the sale can proceed according to the facts provided. It is at this moment that payment is normally completed to the seller, and if applicable, the balance of purchase has to be made according to the signed Contract in Point 2 above. After the act is recorded the Notary Office will issue a photocopy of the entry which is the proof to the buyer that the act has officially taken place. The photocopy will carry the seal of the Notary but as further official copies can be requested at any time this document should not be mistaken for a "Title Deed"- as known in the UK.

On completion of the above Notary act the property in question has then to be registered in the new owners name in the local Land Registry (Conservatoria do Registo Predial). This registration is not obligatory until the owner wishes to sell the property. However, it is strongly recommend that this registration is made immediately after signing at the Notary as a preventative measure against possible financial abuse by the previous owner.

Every year the owner of any property is subject to pay an annual Tax named "IMI" (formerly know as "Contribução Autarquica"), which can be related to the UK word "Rates". This charge is levied each April relating to the previous year and if the amount exceeds €250.00 then it will be divided into two equal bills, the first for payment in April, and the second, for payment in September. It is most important to pay this charge as the failure for doing so eventually results in the property being placed for "forced sale" on the market by the State and goes to the highest bidder.

We strongly recommend that a lawyer is used for professional guidance in the purchase of any property in Portugal.

(Legal Guide on Buying and Selling Property in Portugal)

(Real Estate Agents in Portugal)