From minimum deposits to required legal documents, blogger Samantha Milner offers pointers to those planning to buy a home in Portugal.
Whether you are looking to buy or rent a house in Portugal either one can be as stressful as the other. No matter which one you choose, it is a necessity that you have both a fiscal number and a resident’s number as even landlords won’t accept you without it.
If you want to buy a property in Portugal and get a Portuguese mortgage, expect to have to put a minimum deposit of 10% down. Plus, you will have to have worked in Portugal for a year before you will be allowed one.
If any of your property details are in Portuguese or you don’t understand them, go and visit a solicitor to put your mind at rest. This will save you signing a contract that you don’t understand and that might cost you more money later on.
Points to consider before buying a house in Portugal
When moving to Portugal, many people jump straight in and purchase a property that they have seen at one of the property exhibitions they have visited in their home countries.
I would advise against this because once you have moved to Portugal, you will come across many private property sales where you can get a much better deal.
So to start with, it may be a good idea to rent a property while you are getting your bearings, so to speak. You will find that there are plenty of short-term lets available and if you are looking to buy a property this kind of thing should suit your needs ideally. Read more about renting a house in Portugal.
Make sure that you have a signed lease agreement that details everything required. You will usually find that a month’s rent is required in advance, with a month’s rent also required as a deposit.
Once you are settled, you may want to start looking for a property to purchase (see where to live in Portugal) but you must make sure that you are well prepared as the buying system differs somewhat from elsewhere.
When buying a house in Portugal it is obviously very important that you are aware of the correct procedure to take. When purchasing a property the contract is known as the contrato de promessa de compra e venda.
This is a legal document that details the conditions of the sale and is handled by a notary who is a public officer assigned to carry out this type of legal work. When this contract has been signed, the buyer has to hand over a deposit which usually amounts to some 10–20% of the total cost of the property.
A unique feature of this contract in Portugal is that if the buyer decides not to continue with the contract, they must pay the seller a penalty charge of twice the amount of the deposit that they paid in the first place. This, in effect, ensures that sales very rarely fall through and it is very unusual to find this level of protection anywhere else other than in Portugal.
Another aspect of the property buying process that is unique to Portugal is that the purchaser must obtain a fiscal number from the nearest tax office. This rule applies whether you are a foreigner or a citizen of Portugal, but it is an extremely straightforward process and is simply a case of filling in a form and handing it in to the tax office.
If you purchase a house worth more than EUR 500,000, or less in certain situations, you may be eligible to claim a golden visa in Portugal. This is a fast-track residency scheme offered to non-EU buyers, which includes a number of other benefits. Read the conditions for getting a Portuguese golden visa.
The whole process of completing on a property purchase in Portugal is far quicker than in the UK and it is not uncommon for the whole process to take around five weeks.