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Buying Property in Portugal: A Step-by-Step Guide
01. Finding the Right Property
Choosing the right location
Loving a property is important, but equally crucial is ensuring the surrounding area fits your lifestyle. Consider factors such as proximity to the beach, access to quality schools, and the overall atmosphere of the neighborhood. Take the time to explore on foot or by car to get a true feel for the area. Some neighborhoods may appear appealing at first but could have drawbacks worth considering. We strongly recommend discussing location with your Feraboli Consultant to make an informed decision.
Working with a trusted real estate agent:
Navigating the Portuguese real estate market can be challenging, as processes may differ from what international buyers are accustomed to. Punctuality, efficiency, and clear communication in English are not always guaranteed. That’s why it’s essential to work with an experienced agent who understands the needs of foreign buyers. Feraboli Real Estate will match you with a dedicated Negotiator best suited to your profile, ensuring a smooth and seamless buying experience.
Organizing property viewings efficiently
Plan your arrival
We strongly recommend drafting a selection of properties before your arrival in Portugal. Your Feraboli agent will first consult with you to understand your needs and goals. Once your criteria are defined, we will identify the best matches and work with you to create a shortlist of properties to visit upon your arrival. Virtual viewings are also available before you travel, allowing you to refine your choices in advance.
Be Honest About Your Impressions
When viewing properties, don't be afraid to voice your thoughts. If you like something, let your agent know. If you don’t, speak up as well. This helps your agent understand your preferences and make better recommendations moving forward. The more you communicate your likes and dislikes, the better your agent can tailor the property search.
Be Flexible with Changes
Sometimes, plans change on the fly, and you might want to see other types of properties. Don’t be surprised if the properties you initially liked don’t meet your expectations once viewed in person. A skilled agent will be able to adapt quickly to new preferences and reschedule viewings to find the best fit for you.
02. Legal Process
What document you need to purchasing a Property in Portugal
Before you finalize your plans to purchase a property in Portugal, it's essential to ensure all your documentation is in order.
Apply for a NIF Number A NIF (Número de Identificação Fiscal) is a tax identification number required for all property transactions in Portugal. It is necessary for opening a Portuguese bank account, signing contracts, and paying taxes. You can apply for an NIF at the local tax office (Serviço de Finanças), or through a legal representative if you’re not residing in Portugal.
Open a Portuguese Bank Account To complete the property transaction, you will need a Portuguese bank account. Most banks in Portugal, such as Millennium BCP, and Banco Santander Totta, will allow foreigners to open an account with the necessary documentation, including the NIF. Feraboli Real Estate has priviledged relations with the main banks and can help you facilitating the process.
Find a Lawyer and a Tax Advisor It is highly advisable to hire a local lawyer who speaks your language and is familiar with the property buying process in Portugal. A solicitor will help you with contract reviews and due diligence. You should also consult with a tax advisor to better understand the fiscal implications of your purchase. We can recommend great and trusted professionals.
03. Making an Offer and Negotiation
When you’ve found a property that fits your needs, it’s time to move on to the negotiation phase.
How to make an offer
Once you have selected a property, you’ll need to make a formal offer. The offer is made through your real estate agent and should be in writing. It’s essential to make a realistic and reasonable offer.
In Portugal, offers are not legally binding, even if accepted by the seller. The purchase is only secured once a formal contract, such as a CPCV (Contrato de Promessa de Compra e Venda), is signed.
There are important elements to include in an offer to be efficient, your Feraboli agent will guide you through the process.
Price negotiations (new vs. resale properties)
In Portugal, it’s common to offer around 10% less than the asking price for re-sales properties, although this can vary based on market conditions. Negotiating the price of new developments, however, is rarely possible. Our Feraboli negotiators will guide you through the process, ensuring you achieve the best possible outcome.
04. Due diligence and Types of contracts
Due Diligence
Before finalizing your purchase, it’s crucial to conduct thorough due diligence. A lawyer should be involved to ensure the property is free from legal issues. Key checks include confirming the ownership of the property, verifying that it’s not encumbered by debts, and ensuring the property complies with local zoning laws.
If you do not have a trusted lawyer in Portugal, we can introduce you to highly qualified professionals specializing in both real estate and taxation. They are English-speaking, reputable, and offer fair pricing.
Reservation contract
A reservation contract is not mandatory but highly recommended. It temporarily secures the property for the buyer, allowing time for their lawyer to review the property documents and ensure everything is in order. Additionally, it provides the opportunity to draft a CPCV that both buyer and seller approve.
The reservation fee is deducted from the final purchase price if the transaction proceeds. However, if the buyer withdraws, they may forfeit this amount unless otherwise agreed.
Promissory Contract (CPCV - Contrato de Promessa de Compra e Venda)
The next step is signing a promissory contract, where the buyer usually pays a deposit of 10% to 30% of the purchase price. The CPCV outlines:
- Agreed price and payment schedule
- Terms and conditions of the sale
- Penalties for non-compliance by either party: If the seller backs out, they must return double the deposit to the buyer. If the buyer withdraws without a valid reason, they lose their deposit.
Signing the final deed (Escritura)
The final step is signing the escritura at a notary’s office, where ownership is officially transferred.
Key points:
-All parties (buyer, seller, lawyers, and bank representatives if financing is involved) must be present
-At this stage, the remaining balance of the purchase price is due. Payment is made via bank-certified checks
-The buyer receives the keys and assumes full responsibility for the property
After signing, the deed is registered with the Land Registry (Conservatória do Registo Predial), which can take a few months. Utility contracts (electricity, water, gas, etc.) should be transferred into the buyer’s name promptly.
Additional Documentation
If you’re taking out a mortgage, the bank will require further documentation, including proof of income and the property’s technical reports. Portuguese banks typically offer mortgages for up to 80% of the property value for non-residents, but the terms may vary. Feraboli Real Estate has privileged access to banks and private banks for our clients, do not hesitate to ask our Consultants to connect you to most appropriate banker.
05. Financing
Mortgage options for foreign buyers
If financing is required, begin the mortgage application early, as approval can take several weeks.
Key mortgage conditions in Portugal include:
-Loan-to-value ratio: up to 70% for non-residents, 90% for residents
-Term: 15 to 30 years
-Interest rates: Fixed or variable (linked to EURIBOR)
-Mandatory life and property insurance
06. Taxes and fees to consider (IMT, IMI, Notary costs)
IMT (Imposto Municipal sobre Transmissões Onerosas de Imóveis)
-A property transfer tax paid when purchasing real estate.
-The rate varies depending on factors such as property type (urban vs. rural), location, and whether it's a primary or secondary residence.
-For residential properties, rates range from 0% to 7.5%, with exemptions for purchases below €97,064 (as of recent updates).
-Luxury properties (above €1M) are taxed at 7.5%.
IMI (Imposto Municipal sobre Imóveis)
IMI is an annual property tax paid by property owners.
-The rate ranges from 0.3% to 0.45% for urban properties and 0.8% for rural properties.
-The exact rate depends on the municipality and the property’s assessed tax value (VPT).
Stamp Duty (Imposto do Selo)
A fixed 0.8% tax on the property’s purchase price or tax value (whichever is higher).
Notary & Registration Costs
Notary and registration fees typically range between €1,000 and €2,000, depending on the transaction's complexity and property value.
Buying Property in Portugal: A Step-by-Step Guide
01. Finding the Right Property
Choosing the right location
Loving a property is important, but equally crucial is ensuring the surrounding area fits your lifestyle. Consider factors such as proximity to the beach, access to quality schools, and the overall atmosphere of the neighborhood. Take the time to explore on foot or by car to get a true feel for the area. Some neighborhoods may appear appealing at first but could have drawbacks worth considering. We strongly recommend discussing location with your Feraboli Consultant to make an informed decision.
Working with a trusted real estate agent:
Navigating the Portuguese real estate market can be challenging, as processes may differ from what international buyers are accustomed to. Punctuality, efficiency, and clear communication in English are not always guaranteed. That’s why it’s essential to work with an experienced agent who understands the needs of foreign buyers. Feraboli Real Estate will match you with a dedicated Negotiator best suited to your profile, ensuring a smooth and seamless buying experience.
Organizing property viewings efficiently
Plan your arrival
We strongly recommend drafting a selection of properties before your arrival in Portugal. Your Feraboli agent will first consult with you to understand your needs and goals. Once your criteria are defined, we will identify the best matches and work with you to create a shortlist of properties to visit upon your arrival. Virtual viewings are also available before you travel, allowing you to refine your choices in advance.
Be Honest About Your Impressions
When viewing properties, don't be afraid to voice your thoughts. If you like something, let your agent know. If you don’t, speak up as well. This helps your agent understand your preferences and make better recommendations moving forward. The more you communicate your likes and dislikes, the better your agent can tailor the property search.
Be Flexible with Changes
Sometimes, plans change on the fly, and you might want to see other types of properties. Don’t be surprised if the properties you initially liked don’t meet your expectations once viewed in person. A skilled agent will be able to adapt quickly to new preferences and reschedule viewings to find the best fit for you.
02. Legal Process
What document you need to purchasing a Property in Portugal
Before you finalize your plans to purchase a property in Portugal, it's essential to ensure all your documentation is in order.
Apply for a NIF Number A NIF (Número de Identificação Fiscal) is a tax identification number required for all property transactions in Portugal. It is necessary for opening a Portuguese bank account, signing contracts, and paying taxes. You can apply for an NIF at the local tax office (Serviço de Finanças), or through a legal representative if you’re not residing in Portugal.
Open a Portuguese Bank Account To complete the property transaction, you will need a Portuguese bank account. Most banks in Portugal, such as Millennium BCP, and Banco Santander Totta, will allow foreigners to open an account with the necessary documentation, including the NIF. Feraboli Real Estate has priviledged relations with the main banks and can help you facilitating the process.
Find a Lawyer and a Tax Advisor It is highly advisable to hire a local lawyer who speaks your language and is familiar with the property buying process in Portugal. A solicitor will help you with contract reviews and due diligence. You should also consult with a tax advisor to better understand the fiscal implications of your purchase. We can recommend great and trusted professionals.
03. Making an Offer and Negotiation
When you’ve found a property that fits your needs, it’s time to move on to the negotiation phase.
How to make an offer
Once you have selected a property, you’ll need to make a formal offer. The offer is made through your real estate agent and should be in writing. It’s essential to make a realistic and reasonable offer.
In Portugal, offers are not legally binding, even if accepted by the seller. The purchase is only secured once a formal contract, such as a CPCV (Contrato de Promessa de Compra e Venda), is signed.
There are important elements to include in an offer to be efficient, your Feraboli agent will guide you through the process.
Price negotiations (new vs. resale properties)
In Portugal, it’s common to offer around 10% less than the asking price for re-sales properties, although this can vary based on market conditions. Negotiating the price of new developments, however, is rarely possible. Our Feraboli negotiators will guide you through the process, ensuring you achieve the best possible outcome.
04. Due diligence and Types of contracts
Due Diligence
Before finalizing your purchase, it’s crucial to conduct thorough due diligence. A lawyer should be involved to ensure the property is free from legal issues. Key checks include confirming the ownership of the property, verifying that it’s not encumbered by debts, and ensuring the property complies with local zoning laws.
If you do not have a trusted lawyer in Portugal, we can introduce you to highly qualified professionals specializing in both real estate and taxation. They are English-speaking, reputable, and offer fair pricing.
Reservation contract
A reservation contract is not mandatory but highly recommended. It temporarily secures the property for the buyer, allowing time for their lawyer to review the property documents and ensure everything is in order. Additionally, it provides the opportunity to draft a CPCV that both buyer and seller approve.
The reservation fee is deducted from the final purchase price if the transaction proceeds. However, if the buyer withdraws, they may forfeit this amount unless otherwise agreed.
Promissory Contract (CPCV - Contrato de Promessa de Compra e Venda)
The next step is signing a promissory contract, where the buyer usually pays a deposit of 10% to 30% of the purchase price. The CPCV outlines:
- Agreed price and payment schedule
- Terms and conditions of the sale
- Penalties for non-compliance by either party: If the seller backs out, they must return double the deposit to the buyer. If the buyer withdraws without a valid reason, they lose their deposit.
Signing the final deed (Escritura)
The final step is signing the escritura at a notary’s office, where ownership is officially transferred.
Key points:
-All parties (buyer, seller, lawyers, and bank representatives if financing is involved) must be present
-At this stage, the remaining balance of the purchase price is due. Payment is made via bank-certified checks
-The buyer receives the keys and assumes full responsibility for the property
After signing, the deed is registered with the Land Registry (Conservatória do Registo Predial), which can take a few months. Utility contracts (electricity, water, gas, etc.) should be transferred into the buyer’s name promptly.
Additional Documentation
If you’re taking out a mortgage, the bank will require further documentation, including proof of income and the property’s technical reports. Portuguese banks typically offer mortgages for up to 80% of the property value for non-residents, but the terms may vary. Feraboli Real Estate has privileged access to banks and private banks for our clients, do not hesitate to ask our Consultants to connect you to most appropriate banker.
05. Financing
Mortgage options for foreign buyers
If financing is required, begin the mortgage application early, as approval can take several weeks.
Key mortgage conditions in Portugal include:
-Loan-to-value ratio: up to 70% for non-residents, 90% for residents
-Term: 15 to 30 years
-Interest rates: Fixed or variable (linked to EURIBOR)
-Mandatory life and property insurance
06. Taxes and fees to consider (IMT, IMI, Notary costs)
IMT (Imposto Municipal sobre Transmissões Onerosas de Imóveis)
-A property transfer tax paid when purchasing real estate.
-The rate varies depending on factors such as property type (urban vs. rural), location, and whether it's a primary or secondary residence.
-For residential properties, rates range from 0% to 7.5%, with exemptions for purchases below €97,064 (as of recent updates).
-Luxury properties (above €1M) are taxed at 7.5%.
IMI (Imposto Municipal sobre Imóveis)
IMI is an annual property tax paid by property owners.
-The rate ranges from 0.3% to 0.45% for urban properties and 0.8% for rural properties.
-The exact rate depends on the municipality and the property’s assessed tax value (VPT).
Stamp Duty (Imposto do Selo)
A fixed 0.8% tax on the property’s purchase price or tax value (whichever is higher).
Notary & Registration Costs
Notary and registration fees typically range between €1,000 and €2,000, depending on the transaction's complexity and property value.
