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Real Estate Practices

1. Entrance/ Licensing Requirements

2. Foreign Ownership

3. Land Registration System

a) In the FINANCE BUREAU the properties are enrolled in accordance with a number. These numbers, assignment of articles, are called "matriciais". The document that demonstrated the fiscal situation of the property is named "Caderneta Predial".

b) Registration of a sale usually follows the signing of the ESCRITURA PÚBLICA (title deed), which must be done in front of a notary. Nevertheless, since, past January, 1st, 2009, a larger flexibility in the performance of acts related to transactions of properties was introduced, enabling that they could be carried out trough attorneys, chambers of commerce and industry and by solicitors. Therefore for the purchase and sale of properties the performance of the act by a certified private document becomes sufficient.

4. Real Estate Taxes

a) Municipal Property Tax (IMI) - The IMI is an annual municipal property tax calculated upon the patrimonial tributary value of rural and urban properties situated in the Portuguese territory.

The Local Real Estate Tax rates are as follows:

Rural Properties:0,8%
Urban Properties appraised under the old rules:0,4% a 0,8%
Urban Properties appraised under the new IMI rules:0,2% a 0,5%
Tax resident in an offshore owning a building in Portugal:0,5%

Exemptions

There shall be exempted from local real estate tax, in particular:

Urban housing property or part thereof, constructed, enlarged, improved or purchased for the permanent residence of the owner and effectively assigned to such purpose, within six months after the purchase or completion of the construction, enlargement or improvements, except for a reason not imputable to the beneficiary thereof;
Property or part thereof, newly constructed, enlarged or improved, or purchased, for that part designed to be rented for dwelling purposes, provided that the above conditions are met;

The exemption period in the two preceding cases shall be determined in accordance with the following Table:

Taxable Amount (euros)Period Of Exemption (in years)
Up to € 157 5008 years
From € 157 500 até 236 2504 years

b) Municipal Tax on Property Sales and Transfers (IMT) - The municipal tax on Property Sales and Transfers is a local municipal tax that is levied on the transfer of real estate assets or the transfer of property rights for such assets or subdivisions of them.

This tax will be charged at a single rate of 6.5% on the sale or transfer of urban property not for habitation. The single rate for rural properties is 5%.

The tax is levied at a rate of 8% whenever the purchaser has their residence or headquarters in a country, territory or region with a tax regime that is clearly more favorable.

In regard to the sale or transfer of urban buildings or apartments exclusively for habitation, proper and permanent, the tax is levied at the following rates:

c) Stamp duties

Stamp duties are levied for certain legal documents, books, papers and other items. Transfers free of charge to legal heirs (gifts or inheritances to spouses, ascendants and descendants) are not taxed in Portugal. Other transfers free of charge (with the exceptions provided by law) are subject to stamp duty at 10 %.

Incidence of the tax on the real estate is the following: 0,8% on the onerous acquisition, or by donation, of a property or figures related to property right, as well as the resolution, invalidity or extinguishing, for mutual consensus, of the respective contracts.

Taxable Value (euros)Percentage Rate
Marginal RateParcel to deduct
Up to 89 70000,00
From 89 700 to 122 70021.794,00
From 122 700 to 167 30055.475,00
From 167 300 to 278 80078.821,05
From 278 800 to 557 500811.608,99
Above 557 500Single rate 6

In regard to the sale or transfer of urban buildings or apartments exclusively for habitation, neither proper nor permanent, the tax is levied at the following rates:

Taxable Value (euros)Percentage Rate
Marginal RateParcel to deduct
Up to 89 70010,00
From 89 700 to 122 7002897,00
From 122 700 to 167 30054.578,06
From 167 300 to 278 80077.924,00
From 278 800 to 534 700810.712,05
Above 534 700Single rate 6


5. Other Duties

Energy Efficiency Certificate - Since January, 1st, 2009, all buildings that are sold or rented in Portugal must have a Energy Efficiency Certificate according to the Portuguese legislation.

Money laundering - The Portuguese legislation establishes in the Law n. º 25/2008, of 5 of June the legal rules to combated money laundering in Portugal, who is carried, essentially, through the criminalization of some behaviours and the adoption of measures of preventive character, namely to inform the public authorities of suspicious facts related with money laundering, that they have knowledge through its professional activity, giving for this effect, all the necessary assistance for the competent authorities.

That law imposes some legal obligations to the Portuguese real estate companies, like:

To identify the contracting parties.
To conserve a copy of the contracting parties identify documents, for a period of 7 years after the transaction.
To inform the public authorities of suspicious facts related with money laundering, that they have knowledge through its professional activity, giving for this effect, all the necessary assistance for the competent authorities.
To keep secrecy about criminal process and about the communication made to public authorities of facts related with the possible practice of money laundering.
To fulfil, every six months, a declaration related with all the real estate acts (buying, sallying and permuting) that they had intervene.

6. Other Industry Professionals

Concerning other professionals who work in the Portuguese real estate market, for example:

Property Management.
Development/ Promotion.
Appraisal.
Valuation for sale or purchase.
Residential Lettings.

7. Practitioner Dispute Resolution Systems

8. Practitioner Services

9. Property Marketing Systems

10. Relationship of Buyer/Seller to Practitioner

11. Remuneration

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