Buying property in Portugal - IndigoGuide Portugal

Buying property in Portugal - Portuguese Real Estate

How do costs differ when buying property in Portugal?

The process of buying property in Portugal is different to that in the UK or elsewhere and this page can only give the briefest of outlines about the Portuguese system. Whole books are written on the subject, and this is just to give you a few pointers about what to look out for when you are buying property in Portugal so that you know the right questions to ask your professional advisors when the time comes.

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First of all a warning: do not assume that because a Portuguese word seems familiar to you it has the same meaning as it does in English. With the taxation rules in particular, words and concepts crop up that appear to have similar meanings but which are actually fundamentally different when related to property in Portugal.

The process of buying property in Portugal involves signing a contract, running some checks, then signing the deeds, which is deceptively familiar and can lead to you making assumptions about the process and getting a nasty surprise when you discover your error later on. Expect the process to seem familiar, therefore, but proceed as if you know nothing about it and always ask questions.

When you buy a property in Portugal in addition to your property in your home country, you must consider the tax rules of both countries. This is because you will necessarily pay tax in both, but you want to limit the damage as much as possible whilst satisfying both systems. How you organise your taxation will be up to you and your advisor to decide, as every situation is different. Your main decision will be whether to stay resident in your home country or, once you have bought a property in Portugal, to switch to residency over there. Also, the timing of this switch has knock-on effects and so must be considered carefully.

Apart from tax, other costs to watch out for when buying property in Portugal include notary fees, which are non-negotiable as they are fixed by law; property transfer tax, which changes depending on the cost of your property; land registration fees of about 0.8% of the property price; mortgage charges (if any); surveyor’s fees; connecting to electricity and water providers; and architect’s fees as applicable.

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