Czechs and Slovaks are in no way restricted in buying property in Portugal and may own such property as either a natural person or legal entity. One of the specifics of the Portuguese market is the fact that a large number of properties are owned by off-shore companies, which influences, for example, the amount of property tax.
As a future owner of property in Portugal, a buyer must be assigned a tax identification number. A pre-contract agreement is generally signed before the actual purchase and the buyer pays a deposit, usually 10 % (if the buyer withdraws from the agreement, he/she loses the deposit put down; if, on the other hand, the seller withdraws, he/she compensates the buyer with twice the amount which the buyer deposited). If the buyer purchases a property that is under construction, he/she usually pays in instalments according to the progress of construction.
A notary, who does not represent the interests of the buyer nor those of the seller, becomes involved and it is his/her main task to ensure that the entire legal process of sale and purchase is correct and proper.
Mediterránea R.E.I. recommends that buyers have an independent local lawyer who will take care of a number of matters associated with the purchase, for example:
checking the correctness of all documents to concern the property;
checking that the seller is actually the owner of the property;
finding out whether there is any right of user imposed on the property or any unpaid liabilities from the original owner;
checking that all the required permits for construction have been issued;
ensuring that the contract of purchase is not unfavourable for the buyer;
preparing the documents required to transfer the property to the new owner and to register in the real estate cadastre;
preparing documents which specify the amount of taxes and fees associated with the property.
The whole procedure of buying property may take several weeks or months. In some cases the buyer must be present in Portugal to make payments and attend proceedings with the notary. A legal representative may be appointed for these matters if the other parties involved are in agreement.
The estimated costs associated with buying property in Portugal are as follows:
Price of property (Euro)
% rate of taxation
Deductible amount (Euro)
Less than 81 600 0 % 0
From 81 600 to 112 200 2 % 1 632
From 112 200 to 153 000 5 % 4 998
From 153 000 to 255 000 7 % 8 058
From 255 000 to 510 000 8 % 10 608
Over 510 000 6 % no deduction