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Selling Property in the Algarve and Portugal
Useful information for selling a property in the Algarve and Portugal. All about property searches, contracts, taxes, deeds, licenses and much more. |
When choosing an estate agent, make sure you only instruct a government-licensed agent.
Before we can take your property to market, The following documents must be provided by the vendor.
If the house is already completed and licensed:
1.“Certidão de Teor” (Registo) which allows the buyer to know if there are any outstanding mortgages on the property and also if the person selling is the actual owner, if the property is registered in his/her name. This document is valid only for 1 month. Make sure you have a valid one for the Deeds.
2. “Caderneta Predial”, which is the document held in the Fiscal Department (Finanças) and tells you the size of the property, its location and boundaries, as well as a brief description. In the case of land there is also a drawing of the plot.
3. “Licença de habitatação ou utilização” Habitation or utilization licence, issued by the city council if built after 7th August 1951, or a Certificate from the “Camara” if it was built before that date.
4. “Certificação Energética” Energy Certificate. As of January 2009, all buildings (new and existing) are required to have valid energy certification prior to sale.
5.Plans of the property, of the plot and of the Urbanization (if applicable). These plans, first of all, allow the surveyor or buyer to identify all parts of the property as planned and registered at the Town Council.
6. Copies of of the owners’ Identification document (s) (Passport or Identity Card or Residencia Card).
7. “Numero de Contribuinte” (Tax/Fiscal numbers) of the owners. NB. Originals must be shown to the Notary when the Deeds are signed.
if the property for sale is a project, in construction or off-plan:
1. Building licence (when applicable)
2. Building Contract (when applicable)
3. Complete building project (when applicable)
The vendor will also be required to present the original versions of the above documents as well as those following to their legal representative:
1. Statement from the Tax Department confirming that all the rates bills are paid. The IMI tax is the only tax that will follow the property no matter how many times it is sold, unlike other debts, like electricity, telephone, etc. that will follow the owner for payment, this tax will always go with the property and the present owners.
2. Proof of payment of IMT (Bulletin F05). This is a property transfer tax and has to be paid more than 3 days before the Deeds are signed. Original of the proof of payment must be presented to the Notary.
3. Houses built or altered after 25th March 2003 shall have “Ficha tecnica de habitação”. This is a new document, for dwellings only, that compiles all information about the property, such as builder's details, type of materials used and who provided them, etc.
When you have accepted an offer for your property, the buyer’s lawyer will start the process and work with your legal representative to draft the promissory contract. This is a legally binding contract and lists all the details of the sale. The day when you and the vendor sign the promissory contract, the buyer will be asked to pay a deposit of around 10% to 20%. It is important to note that you will have to pay twice the deposit back to the buyer, if you pull out of the sale once the promissory contract has been signed. If the buyer pulls out, they will lose their deposit.
Once other formalities are completed, You and the buyer will agree a date for the Escritura, or the signing of the deeds.
The Escritura (Escritura Pública de Compra e Venda) will be signed by you and the vendor in the presence of a notary. All the funds will be transferred and distributed by the lawyer according to the terms of the Promissory Contract to cover agent’s, lawyer’s fees and any taxes that may apply to the sale and purchase.
You may have to pay capital gains tax on the proceeds from your property sale. However, you may be exempt if you plan to reinvest the money into another property in Portugal our any country in CEE you can prove that both properties you sold and the one you are buying are, and were, your main residence. |
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