The Portuguese real estate market is very interesting for foreign citizens, so all administrative procedures are prepared for the purchase to be made as easily as possible.

It is important to know that there is no legal condition for foreigners to be able to buy any type of property (apartment, villa, commercial property, land, etc.), an unlimited number of units, in any part of the country, without prior authorization by the Portuguese Government.

After researching the real estate market and making the purchase deal, it is time to start the administrative purchase procedure.

1 – If the foreign buyer wants to buy the property without traveling to Portugal

The foreign buyer can complete the entire purchase process without having to travel to Portugal. To do so, all he has to do is sign a power of attorney in the country where he is located (in any part of the world), under the exact conditions in which he intends to buy. This power of attorney is issued in favor of any person he nominates, and must be apostilled and translated into Portuguese.

The person representing the foreign buyer will thus be able to carry out all the steps from beginning to end of the procedure.

2 – Get the Portuguese Tax Identification Number

The Tax Identification Number in Portuguese is the registration number of any citizen (Portuguese or foreign) for the purposes of tax identification and payment of taxes. It is through this identification number that all taxes will be charged.

The foreign buyer does not have to travel to Portugal to obtain this tax identification, he can be represented through a power of attorney signed abroad, as mentioned above.

The foreign buyer can obtain this identification directly if he comes from a country of the European Community.

If the foreign buyer has non-European nationality, then it is necessary to appoint a representative who lives permanently in Portugal and who accepts this responsibility.

If the foreign buyer intends to have the tax benefit granted by the Portuguese Government to foreign citizens, he must submit the application and documentation to the Portuguese Government.

3 – Check if the property documentation is correct

It is very important to check if the property’s documentation is correct so that nothing fails when signing the deed of purchase.

In Portugal, a set of legal documents issued by the Portuguese authorities is required. Among several other documents, it is necessary to have (1) a certificate of land registration, (2) a certificate from the Portuguese Tax Office (known as matricial certificate), (3) a license to use, (4) a housing technical file (in the case of a unit residential) and (5) energy certificate. More documents may be required depending on the specific property.

If the property is mortgaged by the seller, it is necessary to ensure that, at the time of the deed of purchase, the property is free from any mortgage or pledge.

It is really important to check if the technical features of the property are in accordance with what was presented by the seller, to avoid future problems or disappointments.

4 – Pay the property purchase tax (IMT)

Prior to the deed of purchase of the property, it is necessary to pay the tax called IMT (Transaction Tax). The amount payable to the Portuguese Government depends on the price and type of property. This payment is done online, which makes the entire purchase procedure much easier.

Without the payment of this tax, it is not possible to proceed with the deed of purchase of the property.

5 – Make the Declaration of Prevention of Money Laundering

If the purchase price is paid through bank accounts outside the European Community, the foreign purchaser (or his representative) needs to inform Banco de Portugal where the money came from, in order to prevent money laundering.

6 – Sign the Property Purchase Deed

Finally, the foreign buyer (or his representative) will have to sign the deed of purchase at a notary or similar entity. The notary will verify all the documentation of the property, the seller and the buyer, as well as, if the IMT tax is paid. The deed of purchase, officially written in Portuguese, will mention all the identification of all the people involved, will describe the location and registration of the property, price and other conditions of the business.

If the foreign buyer does not understand the Portuguese language, someone else will be responsible for translating the purchase deed.

Only with the signing of the deed of purchase will the unit finally become the property of the buyer.

7 – Register the property purchase and inform the Portuguese Tax Office

After signing the deed, the foreign buyer must publicly register the deed within 30 days. You must also inform the Portuguese Tax Office within 60 days, so that the Portuguese government can collect the annual tax or grant tax benefits.

8 – Inform the Condominium Administration

If the property is part of a Condominium, the buyer must inform, in writing, the Condominium administration that he is the new owner of the property, also his contact and address or representative in Portugal.