Buying and Selling Property in Portugal – Process Guide

The purchase and sale of a property in Portugal involves a series of steps, documents and legal formalities, the correct completion of which is decisive for the legal certainty of the transaction, both for the buyer and for the seller. This article forms part of the Real Estate Law area of Araújo & Associados.

Stages of the process, from preliminary contract to deed

The process of buying and selling a property typically unfolds in three phases: negotiation and prior checks (due diligence) on the status of the property; the possible signing of a preliminary contract of sale (contrato-promessa), with payment of a deposit (sinal); and, finally, the public deed or authenticated private document, followed by land registration of the acquisition in the buyer’s name. Although the preliminary contract is not legally mandatory, it is common practice whenever there is a gap in time between the initial agreement and the deed, for example, to allow the buyer to obtain bank financing. We develop the regime of the preliminary contract and the deposit in the article Preliminary contract of sale – what you need to know.

Documents required for the deed

The completion of the purchase and sale deed depends on the presentation of a set of documents relating to the property and the parties involved. On the property side, the following are typically required:

• Permanent land registry certificate (or certificate of contents), which identifies the owner and any encumbrances or charges, such as mortgages or attachments, valid for six months;
• Property tax record (caderneta predial), issued by the Tax Authority, with the tax identification of the property and its Taxable Property Value (Valor Patrimonial Tributário, VPT);
• Use licence (or proof of exemption, where applicable), which proves that the property was licensed and complies with the approved project;
• Energy certificate, issued by a qualified expert and registered with the Energy Agency (Agência para a Energia, ADENE), mandatory for most properties placed on the market;
• Housing technical file (ficha técnica da habitação), mandatory for properties built or renovated after 31 March 2004;
• Declaration of no debt to the condominium, where the property forms part of a condominium.

On the parties’ side, identification documents (citizen card, residence permit or passport), Tax Identification Number (NIF) and, where applicable, a marriage certificate indicating the matrimonial property regime, are required.

Checking the registry and planning status

Before entering into any commitment, a careful check of the status of the property is recommended, cross-referencing the information in the different documents – the land registry certificate does not replace the property tax record, nor does the latter replace analysis of the planning status of the property. This check makes it possible to identify situations such as discrepancies between the registered area and the real area, unresolved encumbrances, mortgages or attachments, or non-conformities between the property as built and the licensed project, which can compromise the transaction or bank financing if not identified in good time.

The deed – notary, Casa Pronta or lawyer

The public deed of purchase and sale may be executed before a notary, through the Casa Pronta counter (a public service that allows several procedures associated with the acquisition and registration of the property to be brought together in a single moment), or by authenticated private document, depending on the case and the nature of the property.

Land registration and costs associated with the purchase

Once the deed has been executed, the acquisition must be registered with the Land Registry Office (Conservatória do Registo Predial), a registration that, when carried out through the Casa Pronta counter, can be effected immediately, at the time of the deed itself. In addition to the price of the property, the purchase involves other costs, in particular Municipal Property Transfer Tax (IMT), Stamp Duty, the costs of the deed and registration, and, where applicable, the costs associated with bank financing. For non-resident investors, the tax framework applicable to these costs has relevant specificities, developed in the article Foreign investor – buying property in Portugal.

Buying and selling property and other related matters

The process of buying and selling a property may also involve other relevant legal issues, such as construction defects detected after the acquisition of a new property, dealt with in the article Construction defects – guarantees and time limits for claims, or situations of breach of the preliminary contract, described in the article Preliminary contract of sale – what you need to know.

About Araújo & Associados

Established in 1980, with offices in Porto and Lisbon, Araújo & Associados supports buyers and sellers in real estate transactions throughout the country, providing legal advice in Portuguese, English, French, German and Spanish.

Frequently asked questions about buying and selling property