THE BUYING PROCESS

We have listed below some frequently asked questions with regards to the buying process. Hopefully this will be able to answer all your questions. However, if you feel we have missed something out or wish to know more then please email us on enquiries@albatrossvillas.com

Generally, no special permission is required to buy a property in Portugal (unless it is in a sensitive military area)
Can I negotiate on the purchase price and conditions?
Once you have chosen a suitable property, the purchase price, terms and conditions are discussed with the vendor. Your offer may be subject to a mortgage, or you may require a delayed completion. This must be stated at the time of the offer. We can recommend a lawyer who can help you with this process.

A deposit is not normally paid direct to the vendor, but to the selling agent or lawyer representing you in your purchase. The minimum normally required is 5% of the purchase price. This reservation deposit is paid by cheque or telegraphic transfer, and will reserve the property until contracts can be exchanged at which time a further 10% paid over.

Upon acceptance of the offer by the vendor and payment of the reservation deposit, the next step is to exchange promissory contracts. This normally takes place within about 3 to 4 weeks once you have issued your legal representative with a limited power of attorney for the conveyance of the selected property has been issued and the necessary funds have been transferred to his or her client account. Your legal representative would have made steps to make sure the property is free of debt or problems as above, and the promissory contract will set out the agreed selling price and the date of completion at the notary. It is normal practice at this stage to pay 10% of the purchase price.

You are committed by the signing of the promissory purchase contract, and if you choose not to complete the transaction you will lose your 15%. If you have not reached this stage of the purchase all you will lose is your reservation deposit. Should the vendor decide not to complete the sale then he must return all deposit in double.

As the Portuguese legal systems is different to Britain’s and Ireland’s, your lawyer will make checks and enquiries on your behalf, the whole process is little more troublesome than the buying and conveyance of a property in the UK or Ireland.
Problems can arise when prospective buyers decline to use a lawyer and later find legal complications, which affect their ownership rights.

We can recommend a number of different lawyers who can represent you in your purchase. They will speak in your native language, can be reached by phone, fax, and email, and are happy to ensure that your purchase is as trouble-free as possible. A lawyer will provide legal guarantees that the purchase of your property is free from any debts or charges, and that all fees including electricity, water and community fees are paid up to the day of completion.

Having instructed a lawyer to handle the purchase, you have the reassurance that all the important aspects will be covered.

1. The title of the property is checked.
2. The person selling the property actually owns it.
3. Whether there any charges on the property.
4. Building licenses and permissions are in order, where applicable.
5. The terms and conditions stipulated by the seller are checked for fairness.
6. A report of the findings in then compiled for you to consider, before proceeding with the signing of Promissory Contracts

After the signing of the contracts your lawyer will then arrange:

1. The transfer of the title into your name.
2. For any fees and taxes to be paid.
3. For the title in your name, to be registered in the Local Land Registry.

Under Portuguese law any non Portuguese, non resident purchaser of property in Portugal must appoint a Fiscal Representative in Portugal. The Fiscal Representative will arrange your Portuguese Tax Number (needed for the purchase) and manage any taxation liabilities that you may have in Portugal on an ongoing basis. This covers such things as Council Tax, Income Tax in the event of rentals and Capital Gains Tax in the event of future sale. Your lawyer should be able to recommend a specialist in this are to you.

Please see our page on Fiscal Reresentatives for more information.

A notary formalizes the sale of a property; they check that the title deeds and purchase are in order before the final payment is made, and the purchase document signed. Your legal representative will then with a copy of the Escritura (Title Deed) register your property with the local land registry office, and the final registration of the documentation normally takes around 1 month.

We can give you advice and assistance in obtaining finance in the UK. Additionally we can recommend Portuguese banks that specialize in offering mortgage facilities to foreign purchasers where the only security required is the property or property “to be built” in Portugal.

There are no restrictions in transferring money in or out of Portugal. It is always best to transfer sterling and exchange it in Portugal. At a later date your Fiscal Representative or your lawyer can help you open a bank account in Portugal. In the meantime any transfers associated with the purchase should be remitted to your lawyers Client’s Account.