Legal Guide
Whether you are buying a property, taking up residence or simply spending quality time every year in Portugal, it is highly recommended that you seek the services of a reputable lawyer or solicitor to help you make the right decisions regarding issues such as:
· General legal support (civil law);
· Property registration process, mainly:
Pre-sales contract
Title deed and land registry certificate
Property tax document
· Driver's license and car registration;
· Contracts and deeds;
· Wills, trusts and family settlements;
· Registering with the local authorities;
· Utilities registration.
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Estate Agents
Legal estate agents have a government license number which is called AMI. This license is issued after a series of documents have been presented by the future agency. It is also required that all forms, contracts and procedures be made within government guidelines.
Working with estate agents that do not posses a government license places you in great risk in the eventuality that something goes wrong, so always ask for the license number to prevent these types of cases. The forms, contracts and procedures that need to be followed by a licensed estate agent are implemented to protect both the buyer and the seller. All licensed estate agents are required by law to have a complaints book and it is your right to file a formal complaint should you believe that you are being mislead or that there has been any kind of negligence by the estate agent. After the complaint has formally been filed a copy will be sent to the government where they have a limited time period to reply with their conclusions.
If you suffer financial loss caused by the estate agent's negligence, you can file a claim with their insurance company up to a pre-determined value, once again this is required by law, however, if you are working with an illegal estate agent it is likely that they do not posses this insurance. If you have bought a property through an illegal estate agent and something has gone wrong, the chances that they have insurance and a complaints book is minimal and it will be very difficult to gain any compensation.
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Necessary Documents
When buying a property in Portugal, there are several documents which you should bring with you, as you might need to provide some of these to your lawyer and the bank if you are applying for a mortgage. One of the first documents which are necessary is your Portuguese Fiscal Number; this can be arranged by the lawyer representing you, which is emitted by the local tax office. Some of the other documents which can be required include:
· Photocopy of passport;
· Photocopy of birth certificates;
· Photocopy of P60;
· Bank statement;
· Last three income receipts;
· Declaration of employment stating the company details, date of admission, total annual income and employment position;
· Photocopy of utility bill such as water, gas or electricity.
If you are intending to buy a property normally what is required is a 5% to 20 % deposit of the property purchase value.
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Power of Attorney
The power of attorney is an excellent option for many of our clients, this document enables you to nominate someone to act on your behalf in any matter, normally the lawyer who will be following your case is your legal representative, however, no action is taken without your prior consent. This is a great option if you do not have time to make the necessary trips to Portugal every time a document needs to be signed. This document is written up by the lawyer in both English and Portuguese.
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Promissory Contract
The promissory contract, in Portuguese “Contrato de Promessa Compra e Venda”, is drawn up by the lawyer in English and Portuguese, this contract states all of the conditions of the sale that is to be made and also any changes in the property that has previously been agreed to. This is a legally binding document for both parties involved.
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Property Tax
Properties are subject to tax. Properties, namely, villas, houses and aparments that are under 92.407,00€ and are considered to be a permanent residence, are exempt from this payment, for a second/holiday home the tax is 1% . The tax needs to be paid prior to completion of the purchase; this property tax is called I.M.T. The I.M.T. value varies depending on the value of the property which you are purchasing and is approximately between 1% and 8 % of this value.
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Completion of Sale
When the sale has been concluded and the final deed is scheduled both parties need to be present at the Notary Office where the final deed will be signed, if you have given your lawyer the power of attorney, you do not need to be present as he or she is your legal representative. Prior to this, the Notary reviews all documentation regarding the sale to ensure that everything is correct and legal.
At this point the remaining payment of the sale is made. The sale will then be made official by the Notary and a copy will be given to both parties that have signed it. The photocopy will contain the Notary stamp as proof to the buyer. After this has been concluded the property needs to be registered in the Land Registry (Conservatoria do Registo Predial) in the new owner's name.
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We can recommend reputable English-speaking lawyers who will provide you with the service and support required to ensure your rights and a successful buying process. Apart from drawing up the initial pre-sales contract, handling the payment of the customary deposit, your lawyer can sign the title deed, making the final payment to the vendor who will simultaneously pass over the possession of the property to you, handing you the keys. Your lawyer will pay the relevant taxes and have the title deed submitted to the Land Registry for registration of your title on your behalf.
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To find out more about the different terms and documentation related with the purchase of your Silver Coast property, please visit our useful information page.
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