View in PC version
Values updated by the Portuguese State Budget for 2017
Fill in the following fields to calculate the IMT tax in Portugal:
Is the property located on the mainland or in the islands?
What type of property?
Insert the price of the property
The IMT tax is levied on the value contained in the Contract or on the net asset value of the properties, whichever is greater.
Simulation Result::
IMT Tax to Pay
Stamp duty (0.8 %)
Total IMT tax to pay
Table with price range of the property and tax rate applied in each case:
 The value of the property for public deed is between: Variable rate of IMT Benefit on the tax rate up to 92,407.00 € 0% 0.00 € more than 92,407.00 € up to 126,403.00 € 2% 1,848.14 € more than 126,403.00 € up to 172,348.00 € 5% 5,640.23 € more than 172,348.00 € up to 287,213.00 € 7% 9,087.19 € more than 287,213.00 € up to 574,323.00 € 8% 11,959.32 € more than 574,323.00 € 6% 0.00 €
 The value of the property for public deed is between: Variable rate of IMT Benefit on the tax rate up to 92,407.00 € 1% 0.00 € more than 92,407.00 € up to 126,403.00 € 2% 924.07 € more than 126,403.00 € up to 172,348.00 € 5% 4,716.16 € more than 172,348.00 € up to 287,213.00 € 7% 8,163.12 € more than 287,213.00 € up to 550,836.00 € 8% 11,035.25 € more than 550,836.00 € 6% 0.00 €
 The value of the property for public deed is between: Variable rate of IMT Benefit on the tax rate For all values 6% 0.00 €
 The value of the property for public deed is between: Variable rate of IMT Benefit on the tax rate For all values 6.5% 0.00 €
 The value of the property for public deed is between: Variable rate of IMT Benefit on the tax rate up to 115,508.75 € 0% 0.00 € more than 115,508.75 € up to 158,003.75 € 2% 2,310.18 € more than 158,003.75 € up to 215,435.00 € 5% 7,050.29 € more than 215,435.00 € up to 359,016.25 € 7% 11,358.99 € more than 359,016.25 € up to 717,903.75 € 8% 14,949.15 € more than 717,903.75 € 6% 0.00 €
 The value of the property for public deed is between: Variable rate of IMT Benefit on the tax rate up to 115,508.75 € 1% 0.00 € more than 115,508.75 € up to 158,003.75 € 2% 1,155.09 € more than 158,003.75 € up to 215,435.00 € 5% 5,895.20 € more than 215,435.00 € up to 359,016.25 € 7% 10,203.90 € more than 359,016.25 € up to 688,545.00 € 8% 13,794.06 € more than 688,545.00 € 6% 0.00 €
 The value of the property for public deed is between: Variable rate of IMT Benefit on the tax rate For all values 5% 0.00 €
 The value of the property for public deed is between: Variable rate of IMT Benefit on the tax rate For all values 6.5% 0.00 €
Formula to calculate this IMT tax: (0.00€ x 0.00%) - 0.00€ = 0.00
These values are merely informative. We advise the consultation or support of specialized professionals

# Buying and selling property in Portugal

## Legal Proceedings

Article about BUYING AND SELLING PROPERTIES produced by the GROUP ARE "Algarve Real Estate" in collaboration with the Lawyer Dr. Rita Branco, specialized in Portuguese Real Estate Law. We will explain you simply the complete Buying and Selling Properties process, with reference to the entire Portuguese legal process.

## 1 – How does the Buying and Selling Properties work in Portugal?

In Portugal, buying and selling properties involves a public deed. Afterwards, the Public Deed is validated with the registry of the acquisition at the Land Registry Office. By that moment, the property is registered in the purchaser’s name. The Public Deed can only be signed in the presence of a Notary or in the Land Registry Office.

CONCEPT AND FRAMEWORK

“The purchase and sale is an agreement through which an asset or a right of an owner is transferred to another against payment” - Article 874 of the Civil Code.

In Portugal, the purchase and sale process is simple and includes the following obligations:

1. Property acquisition – The transmission of property or of the usufruct rights;
2. Delivery of Property – The obligation to deliver the property;
3. Payment – The obligation to pay the price. – Article 879 of the Civil Code.

The purchase and sale is a real contract given that the constitution or the transfer of the rights through a contract – cfr. art. 408 n.1. of the Civil Code. Both parties (buyer and purchaser) can agree that the transmission is contingent on an uncertain future event, i.e., the contract is subject to a condition precedent or they can agree that the contract depends on the payment of the price or it is under a reservation of title.

## 2 – How does the Purchase / Sale Process work?

• The Property Purchase / Sale requires the verification of the property documents. It is important that all the documentation is valid and the assets are regularized.
• In order to check the legal validity of the properties in fiscal terms, registrations, possible existence of encumbrances or charges on the property it is advisable to have the intervention of qualified professionals - lawyers and solicitors with expertise in Real Estate Law.
• The agreement between the buyer and the purchaser about the business conditions shall be verified. Property’s documentation must be delivered to the purchaser. I tis advisable to formalize a pre-contract agreement in which the business conditions (price, payment conditions, signal value and others) are set out by both parties.

## 3- Purchase / Sale Process Stages:

### 3.1 – Surveys and Searches about the property legal title:

Before the pre-contract agreement signature all the documentation of the property must be verified which can be done in the Land Register Office, Financial Services Bureau and Municipal Council; in some cases it is necessary to go to other entities.

### 3.2 – Required Documents for a property purchase / sale:

• Purchase / Sale Contract – The law establishes that the property’s purchase / sale contract must be concluded by means of public deed or private document, authenticated by a lawyer or a solicitor.
The purchaser and the seller use to participate in the public deed or private document signature. In specific cases, other elements can be involved, such as representatives of credit institutions, prosecutors representing the purchaser or the seller, spouses who should give their express consent for the sale, interpreters if the purchasers or sellers don’t understand Portuguese, etc.

Regarding the required documents for the public deed, there are the documents of all the stakeholders involved and the property’s documents.

#### 3.2.1 – Necessary Documents and information related to the purchase / sale contract parties:

##### 3.2.1.1 - In the case of natural persons:
• Documents:
• Identity card / fiscal number
• Personal data:
• Civil status (married, single, divorced, widowed),
• Matrimonial regime (separate property, community property),
• Place of birth (parish and municipality).

#### 3.2.2 - In the case of legal persons, particular in the case of commercial companies:

Certificate of the Commercial Registry, issued less than 1 year, and legal/corporate person identity card (other documents may be required, such as minutes of the General Assembly or of the meetings of the Board of Directors, depending on the type of company, its corporate object and its biding regulations).
Identity cards from the Company Legal Representatives, who will act on behalf of the company (Identity card and fiscal number).

### 3.3 – Property documents and information

#### 3.3.1 – At the Land Registry Department:

Land Registry Department has a complete description of every property, so it is possible to request information about a registered property, simply by asking an updated Land Registry Certificate. This certificate includes the complete description of the property and its registration in the vendor’s name. The Land Registry Certificate enables you to verify if the seller has legal right to sell the property and to verify the possible existence of encumbrances or charges on the property.

Any encumbrances or charges, such as:

• Mortgages,
• attachments,
• Easements

Shall always be cancelled at the time of the Public Deed.

At the Land Registry Department you may obtain a Property’s Land Registry Certificate and check the following situations:

• Property duly legalized - If the property really corresponds to the seller’s description and to the description presented on the Property’s Land Registry TAX Certificate (caderneta predial), on the project approved by the municipality and on the license for habitation grated by the same entity;
• Legitimacy to sale the property – if the seller is the current and only owner, it therefore grants the legitimacy to sale the property;
• Other rights – if there’s no other registered rights or other registrations pending, which can restrict the use of the property;

Required documents: Land Registry Certificate or the access code or the access code to the Land Registry Permanent Certificate issued, maximum, on the last 6 months by the Land Registry Department.

#### 3.3.2 – At the Finance Office:

The tax Administration Department through the local services can provide information about the tax status of the property and determine the competent entity for complying with property’s fiscal obligations;

• Property duly registered – If the property’s description presented by the Tax Office correspond to the information shown on the Land Registry Certificate;
• The property’s conservation status – If the property is vacant (this confirmation isn’t absolute since there could be rental illegal contracts, i.e., not registered in the Finance Office);
• Outstanding property tax – If there are no outstanding amounts relating to the Municipal Tax on Real Property (IMI)) or whether, on the contrary, if there are such fiscal debts in a position to be able to use the property to cover the debt;
• Updated Evaluation of the property – Check if the property has been evaluated according to the rules of CIMI and the taxable value of the property (the municipal property tax will be calculated over this evaluation value);

Required documents: Land Registry Certificate, issued maximum on the last 12 months by the local Land Registry Department or obtained from the internet by the property owner. This document allows to check if the property is registered in the name of the owner, its areas, composition, neighboring areas and patrimonial value (property fiscal value after the evaluation made by the Tax Office).

#### 3.3.3 – At the City Council

• Licensing of the property
• Duplicate of the Technical Document of the Property
• Consultation on the main Municipal Territorial Plans
• Acquisition of the Waiver Legal Right Certificate

REQUIRED DOCUMENTS:

Habitation/occupancy License, issued by the Local City Council (in certain specific situations, license for habitation may be replaced by the property permit, or even waived, if i tis a property built before 7th august 1951 – ie – before the entry into force of the Regime Geral das Edificações e construções (General Administration of Buildings and constructions), or if the property has been registered at the Tax office (in the Finance Office) in 1937. This document allow to determine if the property has been licensed for housing, commerce or services by the combined entity.

Certificate issued by the local City Council, attesting for provisional reception of works or attesting the provision of a guarantee at a level sufficient to cover the completion of all the construction works (only if the acquisition is the first transmission of properties built in separated lots or in individual units);

Technical Document of the Property: Technical Document of the Property is a document describing the technical and functional characteristics of the property and it must be presented on the date of the public deed / particular document for all the properties whose application for the License of the property has been lodged after 30th march 2004.

If it is an acquisition of a new property for housing and in case that the property is not yet completed, a duplicate of the Technical Document of the Property or the Provisional Technical Document of the Property shall be required. The law establishes that the Technical Document of the Property cannot be handwritten (with the exception of the technicians’ signatures) and it must be written in Portuguese.
The Technical Document of the Property cannot be handwritten (with the exception of the technicians’ signatures) and it must be written in Portuguese in a clear and understandable manner.

The Technical Document of the Property must contain information about the most important professionals involved in the project, in the construction and reconstruction, addition, and also information related to the real estate developer, about the allotment, about the urban property and about the independent building unit or single-family home.

There are also other mandatory information which must be described in the Technical Document of the Property, such as:

• Property Guarantee, and the operating mode in case of defects;
• Rules and procedures of the condominium, if there are, and signed contracts for the supply of services;
• Rules about the maintenance of the equipment installed and that require special handling.

The ground plans regarding the enterprise, the property and the independent building unit must be identified on the correct item on the Technical Document of the Property and described in an annex, which is part of the document.

The drafting of Technical Document of the Property remain the exclusive responsibility of the real estate developer, who, together with responsible technician , must sign the document, attesting the veracity and accuracy of the information contained on the Technical Document of the Property with the projects of architecture and of concluded specialties about the property.

The execution of a purchase and sale public deeds whose license of the property has been required after 30th March 2004 depends on the presentation of the Technical Document of the Property to a notary / lawyer. This obligation is valuable to all the real property transmissions, the first or subsequent ones.

The owner must preserve the Technical Document of the Property as long as he owns the property and, in the case of sale, must deliver it to the new owner in the event of loss or damage of the document, the owner may request a duplicate of the Technical Document of the Property at the city Council or with the Real Estate Developer.

Supporting documents of the respective pre-emption right, issued by the Municipal Council and / or by the Institute of the archaeological and architectural heritage (only when the relevant law gives the referred entities the pre-emption right) or the neighboring if it is a rural property.

## ENERGY PERFORMANCE AND AIR QUALITY CERTIFICATE FOR THE PROPERTY

The Energy Performance Certificate is required for all new and used property’s from the moment they are offered for sale or rent, by the owners or by the Real Estate Developer.
Document must be presented when signing the contract of purchase, lease or long lease, attesting the energetic class information about the property.

This document assesses the energy efficiency of the property on a scale from:

• A+++ (most efficient)
• A++
• A+
• A
• B
• C
• D (least efficient),

And it is issued by qualified technicians authorized by ADENE.

The Energy Performance Certificate presents information regarding the energy consumption concerning the acclimatization and water heating. This certificate indicates improvement measures in order to reduce the consumption. The document has a validity of 10 years.
Others: In the case you intend to use a credit bank to finance the acquisition, the buyer must confirm the documents required by the bank. In this case, provisory registration at the Land registry of the purchase and mortgage are required.

## 4 – The elaboration of the promissory - purchase agreement:

After having analyzed all the documentation and all the factual and legal conditions related to the property acquisition, one will proceed to the elaboration of the promissory purchase agreement, in which the parties agree unilaterally to celebrate the final deed of purchase

Signing a promissory purchase agreement is convenient when the two parties are interested in ensuring the continuity of the business, but the conditions had not yet been met for finalize the purchase.

This situation may occur because of two reasons, namely when the building construction is not finished, because the devision of the Building into Units is not completed (horizontal Property), when the property hasn’t already the licença de utilização, or when the buyer doesn’t have the amount to pay for the property or when he is waiting for final approval regarding the bank financing.

Through the signature of a promissory - purchase and sale agreement, both parties can immediately bind (at a moment when they don’t have all the necessary documentation to sign the public deeds or just because it is not convenient for one of the parties sign the public deeds so early), ensuring that the sale/purchase will be formalized, in the contracted period.

With this agreement, the parties are providing adequate legal security in case of delay or non-performance of the contract.

The decision of signing promissory -purchase and sale agreement is often related to the urgent need to formalize a biding legal document, considering that signing a public deed takes always more days than the promissory contract.

The decision of signing or not signing a promissory contract depends on the particular details of the business and its intervenient parties.

### Essential elements of a promissory share-purchase agreement:

The promissory contract’s contents may vary according to the parties’ specific circumstances, the property situation, and the type of business intended by the parties.

By consequent, the promissory contract may and must describe all the business’ conditions and obligations, namely essential and subsidiary clauses, any suspensive or resolutive conditions which may have been defined, price definition and the payment conditions and periods, public deeds date, identification of characteristics corresponding to the guarantees constituted and the applicable penalties and all the other necessary clauses to protect the parties involved in the business.

In the other hand, the property’s documents analysis may reveal some circumstances which may be taken in consideration in the promissory contract articles. The obligation the purchaser has to regulate the non-conformities identified on the property’s documents is often described in the promissory share-purchase agreement.

Finally, the property’s physical conditions may justify the inclusion of specific provisions in the promissory contract. The obligation the seller has to proceed to certain works and repairs in the property before signing the public deeds is often described in the promissory share-purchase agreement.

#### In short, the essential elements that must be included in a promissory -purchase and sale agreement are:

1. Parties’ complete identification (for natural persons: name, birth place and nationality, civil status, address, identity card number, fiscal number; and, for Corporate ownership: company name, head office address , share capital, registration number and identification of the person acting, duly authorized and mandated for the purpose.
2. Property’s complete identification: (localization, composition, property description’s number according to the Land Register Office, cadastral register according to the Finance Department and number, issue date and issue authority responsible for the habitation/occupancy or construction license or reference that the property is exempt of License.
3. Promissory -purchase and sale agreement’s definition, specifying:
• If i tis an unilateral or bilateral agreement;
• If the property is purchased free of any encumbrances, debts or other obligations, and that it is not occupied by people or goods;
4. Price and mode of payment, including an indication of the deposit’s amount and its reinforcements, if it is the case;
5. Moment of the property delivery (extremely important according to the legal rigth of retention as per art.º 755.º, n.º 1, Portuguese Civil Code).
6. Once the property is delivered, the IMT payment is mandatory, with the exception of properties destined for permanent housing purposes.
7. Any other conditions wanted by the parts to be consider and its consequences in case they are not respected;
8. Indication of the guarantees and obligations of the parties;
• Declaration, for all legal purposes, attesting that at the time of the public deed, the property is free of property cadastre, according to the law, the areas registered in the official land register must be in accordance with the land description and the plans approved by the Municipal Council, through the habitation/Occupancy license;
• Declaration attesting that, during the negociations of the promissory contract of purchase and sale , any information that may affect the promissory purchaser’s will to hold the business was omitted, namely the property’s physical condition or legal situation, or any other facts which may have implications for the sale of the property, the property will be delivered unoccupied, free for any onuses, charges or responsibilities.
• Declaration attesting that the property is duly registered at the Land Registry Office and at the Finance Office.
• The existing areas and structures must correspond to the descriptions in the property’s documentation registered at the Land Registry Office or at the Finance Office or at the Municipal Council, and, in the case of non-conformity, the error must be rectified before the public deed’s date.
• Free of any encumbrances, debts, mortgages or other obligations, and empty.
• Declaration attesting that, to the best of her/his knowledge, there are no legal notice, complaint, arbitration judicial proceedings or any other proceedings pending or its threaten , that may affect his/her rights over the property, before a court of law, of any governmental department or local authority, which somehow may affect the fulfillment of the duties here mentioned.
• With the exception of the promissory purchase and sale agreement, there is no rental promissory contract, or any other of any nature, related to the property or part of it, which may restrict or limit its use or disposition by the promissory purchaser.
• The property doesn’t present any fiscal duties, resulting from the promissory seller’s acquisition or use.
• The property is in good housing conditions and it has all the equipment and internal networks, water, electricity gas and sewage installation, in normal conditions and its standard configuration has not changed at all.
• On this occasion, if there is any property’s insurance, the promissory sellers shall be required to maintain it in force until the public deed date.
9. Reference to the manner in which parties should be given notice about any subject related to the contract and reference to address where notifications shall be sent.
10. Reference to the real estate agency intervention
• In accordance with the article 40, law 15/2013, 8th February, the real estate agency intervention must be mentioned on the promissory -purchase and sale agreement and in the public deed by the parties. If this information is omitted, the parties shall be subject to the penalty applicable to the crime of qualified disobedience described in the article 348 of the Penal Code.
• Parties shall mention that they they used a real estate agent____, holder of license nº / registered at the institute of Construction and Real estate IP under he number: / or that they didnt use a Real estate agent
11. Real Estate Agency’s responsability
• The Real Estate Agency must verify the existence of encumbrances or charges on the promissory property.
• According to the Supreme Court of Justice, the Real Estate Agency has the obligation to verify if the property has any encumbrance or other charges, before the promissory purchase and sale agreement is finalized, and, if so, the agency shall inform the interested party of any fact that may jeopardize the business conclusion.
• If the interested party is not informed by the real estate agency and he/she signs the promissory purchase and sale agreement, by paying the deposit, the real estate agency is obligated to repair the damage, by repaying the deposit amount.
• In this case and according to the joint and several liabilities, the promissory seller he is obliged to return the amount doubled.
• Although they can have different causes, they need to have the same goal which is the interest of the offended. If both the promissory vendor and the Estate Agency will have to repair the same damages, or obligations with the same object, the responsibility is divided by both.
• This may benefit the promissory vendor because the value of is payment will be reduced.
12. Consequences of non-fulfilment of promissory contract, namely the execution of the contract as per article 830º of the Portuguese Civil Code.
• The purchase and sale promissory agreement are related, but are distinct. The first one mentioned is an independent agreement and the second one is a subsidiary clause. Failure to respect the general conditions could lead to several consequences.
• If both parties fail, the normal solution is only to return the deposit’s amount received.
• However, if the defaulter is the one who paid the deposit (usually is the promissory purchaser), the other party (promissory seller) can keep the amount as theirs If the defaulter is the one who received the deposit (promissory-seller), the promissory purchaser may require the amount paid in double.
• If beyond the deposit, the promise object was also delivered, in the case of failure, the injured party may require the amount restitution but also the price already payed and can have the difference between the agreed value and the current value of the property.
• Finally if there isnt yet a defnitive breach of contract but just a delay, the offended part may request a court execution of the agreement. The court will issue a judgment that will replace the deed of sale and has the same legal effects that final contract.
13. Notary signature’s recognition:
• The Promissory purchase and sale agreement of a property or unit, built or under construction must be signed by the promissory party or partys (depending if i tis a unilateral or bilateral agreement) and the signature’s shall be certified and a certification, issued by the notary, attesting that the property has the construction or operating licence.
14. Assignment of the contractual position clause related to the promissory purchaser in a share-purchase promissory agreement
• The promissory contract can include the possibility of the promissory purchaser giving up his/her position to a third party.
• If this possibility is not described on the contract, the assignment of the contractual position is subject to prior authorization by the promissory seller. Assigning a contractual position means giving to a third party the promissory purchaser position in a certain purchase and sale promissory agreement, the third party being entitled to have all the rights and obligations related to the mentioned contract. Assigning a contractual position, with the third party representing the promissory purchaser, shall mean that the promissory purchaser shall cease to be binding on the process.
• Either the assignment of contractual position or even the simple possibility of its existence stated in the share-purchase promissory agreement have fiscal consequences, affecting the IMT. The Tax law assume the existence of onerous transmission in case of assignment of contractual position (current orpotencial being taxed as an effective transmission, that is, the tax is levied on the deposit value payed by the purchaser, but at the applicable rate of the total amount.
• Where the definitive contract is finalized or the taxable event occurs before the definitive contract’s conclusion, by which the property’s transfer by law is provided, and the grantor as already paid the tax due there is only payment of any extra additional tax when the value declared for the final deed was superior than the value used to pay the previous Tax If the acquirer benefits from a reduction or exemption, the tax will be cancelled or reduced.
• The inclusion of clauses in the Promissory Purchase and sale agreement, which allows or provides the possibility of the promissory purchaser to assign his/her contractual position to a third party, should be carefully considered.

### Breach of a share-purchase promissory agreement:

#### Consequences:

The consequences of a share-purchase promissory agreement’s breach may be provided in the contract. In the absence of specific stipulations in the promissory contract, the general rules set out in the Civil Code are applied. The Civil Code sets the following applied rules:

• In the case of default by the promissory purchaser, he/she loses the deposit previously payed.
• In the case of default by the promissory seller, he/she shall return to the promissory purchaser the deposit amount doubled; alternatively, when there is the “ Traditio” of the property (that is transmission of ownership of the property), the promissory purchaser may request the property value at the time of the promissory contract’s breach, with deduction of the previously agreed price, being the deposit and the price already payed returned.
• The limit time to consider or not a case of breach and not only a case of delay should be indicated in the share-purchase promissory agreement. It is possible to indicate that it is a case of breach when, being one of the parties is in arrears, the other party puts the defendant on notice, defining a reasonable period to comply with the default charge and the same does not comply again with the fufulment of its obligation during the said deadline,
• That’s the reason why timetable for complying with the contract must be defined by the parties in the share-purchase promissory agreement, within the meaning of articles 801 to 808 of the Civil Code, after the maturity of the obligation to grant the public deed, so that the delay may be considered an effective breach.
• In the case that the party still don’t comply within the defined date, the other party shall send another one written notice, as agreed in the contract, mentioning that, being in default, the deposit is lost or it will be returned doubled to the interested party.

As an option to the compensations presented, the non-breaching party may choose to request the contract specific execution to the court, in order to obtain a sentence which may replace the defaulting party's negotiating statement, ensuring this way the contract’s coercive compliance.

## 5- Provisional Registries (acquisition or mortgages) in favor of the purchaser

The acquisition’s provisional registry consists on the acquisition’s register in favor to the purchaser, before the public deed conclusion.

When registering, the seller declares that he promised to sale the property to the purchaser for the agreed price in the share-purchase promissory agreement.

The mortgage’s provisional registry consists on the registration of a mortgage over the property before the mortgage’s public deed conclusion (that most of the times happens at the same time as the purchase and sale public deed).

These registries provide a registral priority comparing to other registries which could eventually be resisted by other external parties before the public deed (for example, pledges or mortgages).

• The acquisition provisional register shall be signed by the promissory seller (the signature shall be certified in situ or, alternatively, the register’s request must be signed in the Land Registry Office). In the case there is a promissory share-purchase agreement with certified signatures, the register’s request can be signed by the lawyer/solicitor or by the promissory purchaser, provided that the register’s request is delivered with the promissory contract (or certified copy)
• The request of the mortgage’s provisional registry shall be signed by the promissory purchaser (the signature shall be certified in situ or, alternatively, the register’s request must be signed in the Land Registry Office), provided that the acquisition’s provisional registry at his/her favor (in practical terms, these registers are delivered at the same time, but the purchase will be registered efore the mortgage

The provisional registries expire within six months of the submission, in the case they are not definitive (even though they might be renewed)

After the public deed conclusion / sale and purchase’s and mortgage’s certified private documents, when it is the case, the acquisition and mortgage’s provisional registries must be converted into definitive documents (with retroactive effect of the acquisition and the mortgage, for the registral proposals, at the time the provisional registries’ requests were submitted).

Usually the provisional registries are demanded just when an acquisition financing exists (demanded by the bank), but the true is that having the provisional registries – even when the bank isn’t part of the process - is always an extra guarantee for the purchaser.

After all, a provisional registry may guarantee that, at the time of the public deed, the purchaser will have the possibility to convert it into a definitive registry, eliminating any other encumbrances which might have been registered upon the property.

If there are no provisional registries, neither of acquisition or mortgage, the acquisition registry must be issued immediately after the public deed conclusion.

Finally, any registry’s request must be supported with the Property Tax booklet or a certificate from the Tax office with the Property tax information

## 6 – Public Deed’s Celebration

Before signing a Public Deed or a Certified Particular Document of a property’s sale and Purchase, the property’s legal position may be verified, by analyzing several procedures. A considerable details about the legal position can be find in the property’s legal and fiscal documents previously mentioned, which are often provided by the seller,

The necessary documents to the pubic deed / particular document are mentioned in the 3.1 topic.

In addition to the mentioned documents and the indicated verifications, it is alsoimportant to verify if there are preemption rights for the benefit of third parties, apart from the Government (adjoining properties owners, if it is a rural property transmission, or other rural properties owners in the same area, in the case it is a rural property located in a National Agricultural Reserve area, property’s renters, etc.)

If there are preemption rights for the benefit of third parties, the seller must be demanded to present documents demonstrating that the preemption rights’ holders were notified to exercise that right and that they have resigned that exercise (expressly or because they have exceeded the period to do it)

Finally, if the property has any mortgage, the seller must guarantee its cancellation, by presenting, at the latest in the moment of the public deed, the mortgage’s cancellation certificate. It happens often, considering that property developers usually finance their promotions, by proceeding subsequently to the mortgage’s cancellationregarding any unit , plot or housing, as they are sold.

Besides the legal questions abovementioned, before purchasing a property, the purchaser shall verify the property’s physical condition:

• On-site acknowledgment,
• Areas confirmation,
• Property’s characteristics and delimitation,
• Confirmation of the location
• Property’s state of preservation
• Activities developed by the neighbors which can compromise the property use,
• etc.

### Payment of Property Municipal Purchase Tax (IMT)

The Portugal Property Purchase Tax (IMT - Imposto sobre Transmissão Onerosa de Imóveis) payment must be done by the purchaser at the Tax Office or using the internet (www.e-financas.gov.pt), before signing the public deed, except if there is a tax exemption.

The value on which the IMT’s liquidation is based on is the property's taxable value or the transmission value, whichever is higher. The IMT’s amount is defined according to the application of the rates described on the IMT Code, which are divided into ranges. Both the ranges and the taxes are altered every year, according to the law approving the State Budget.

## IMT TAXES

• Rural properties in Portugal – 5%
• Urban properties in Portugal, exclusively devoted to residences – 1% to 6%
• Urban properties in Portugal, exclusively destined as a main permanent dwelling – 0% to 6%
• Other  in Portugal and other acquisitions – 6.5%
• Properties acquired  in Portugal by entities who have the head office in a country, council or region where the fiscal system is clearly more favorable, as defined on the list approved by ministerial order of the Minister of Finance – 10%

## IMT tables - 2015

Main Permanent Dwelling

The table bellow applies to the purchase of an urban property or independet Unit of a Urban Property , exclusively destined as a main permanent dwelling in mainland Portugal.

The properties not exceeding 92.407 euros are exempt from this tax.

 Taxable value Marginal Rate (%) Value to cut down Up to 92.407 euros 0 % 0,00 from 92.407 to 126.403 euros 2 % 1.848,14 from 126.403 to 172.348 euros 5 % 5.640,23 from 172.348 to 287.213 euros 7 % 9.087,19 from 287.213 to 574.323 euro 8 % 11.959,32 Over 574.323 euros Single Rate 6% Single Rate 6%

Secondary Residential or Residential Leased Property Regarding an urban property’s acquisition or independent unit of a urban property exclusively destined as a main permanent dwelling, not covered by the previous table, in the mainland Portugal, the following taxes are applicable

 Taxable value Marginal Rate (%) Value to cut down Up to 92.407 euros 0 % 0,00 from 92.407 to 126.403 euros 2 % 924,07 from 126.403 to 172.348 euros 5 % 4.716,16 from 172.348 to 287.213 euros 7 % 8.163,12 from 287.213 to 550.836 euros 8 % 11.035,25 Over 574.323 euros Single Rate 6% Single Rate 6%

IMI exemption if it is a property devoted to residences

As a general rule, the IMI exemption (Imposto Municipal sobre Transmissão Onerosa de Imóveis) must be applied for prior to the act or contract, which gave rise to the transfer and always prior to the return that is required.

Exemption is applicable if it is a property’s acquisition exclusively destined as a main permanent dwelling, and if the taxable patrimonial value or the property’s declared value does not exceed ceiling applicable set out in the article 9 of the CIMT, that is, in 2015, € 92.407 euros.

These benefits or reductions are also applicable to property permute, if the property obtained is exclusively destined as a main permanent dwelling, or if it is a property devoted to residences, and if the taxable patrimonial values’ difference or the declared value difference (whichever is greater) between the property delivered and the obtained one does not exceed the ceiling applicable set out in the article 9.

The exemption’s benefit is also applicable to urban properties exclusively destined as a main permanent dwelling, but not to the lands destined to those properties’ construction. When the property is used in a different way from that on which the benefit was given, within a period of six years from the date of acquisition, except in the case of sale;

when the properties are not used exclusively as a main permanent dwelling, within a period of six years from the date of acquisition or when there is any other property evaluation with effects the IMT (Municipal Purchase Tax), the VPT (taxable ratable value) exceeds the amount set out in no art. 9 of the CIMT (Código Imposto municipal sobre Transmissões)

When signing the public deed, the purchaser shall present to the notary or the lawyer or solicitor the settlement guides of the taxes due by the purchaser: IMT (Imposto Municipal sobre Transmissão Onerosa de Imóveis) and the stamp duty (I.S) with the proof of payment, except if it is an IMT exemption case (Imposto Municipal sobre Transmissão Onerosa de Imóveis). Generally, the IMT (Imposto Municipal sobre Transmissão Onerosa de Imóveis) must be payed through same day or next workday settlement. If the act or contract is concluded abroad, the tax must be settle and paid by the end of the month following the transmission.

### Payment of the stamp duty on the acquisition value

The stamp duty on the property acquisition value has a variate incidence, including all the acts, contracts, documents, books, papers or any other facts set out in the Stamp Duty General Table.

The economic interest belongs to the acquirers if it is an onerous acquisition of the property rights (ex: urban property’s acquisition) or parts of this right (ex.: acquisition of independents unit of a urban property The taxable value of the tax duty are described in the Stamp Duty General Table, reporting also the applicable rates, at the time they are due.

Stamp Duty must be paid by the responsible agents on the 20th day of the month following that in which the taxable event occurred, in the treasury departments of the Finance Office or in any other authorized place under the terms of law.

The stamp duty is settled by the purchaser when signing the public deed and it is according to the taxable patrimonial value or other value agree by the parties, whichever is greater.

#### On the acquisition value: 0,8%.

On the loan value: Stamp duty on the granting of credit (Verba 17.1 da TGIS):

• Up to 1 year, for each month or fraction: 0,04%;
• From 1 to 5 years: 0,5%;
• Over 5 years: 0,6%.

#### Legal fees of the public deed or of the particular document and land register:

The legal fees of the public deed or the particular document depend on the notary or the lawyer or the solicitor responsible for writing the document.

#### Land register of the acquisition in favor of the purchaser

The lawyer or the notary must require the acquisition registry in the name of the purchaser, within ten days from the public deed or particular document conclusion. The acquisition’s land register at the Land Registry Office is 250,00 euros, if it is delivered at the office, or 225,00 euros, if it is delivered online.

#### Acquisition endorsement at the Finance Office, in favor of the purchaser:

After the public deed, the Notary or the Lawyer provide the endorsement at the tax office in favor to the purchaser. From the acquisition day, the new owners are responsible for paying the taxes and property fees.

## 7 – Property Taxes after purchase IMI (Imposto Municipal sobre Imóveis)

IMI is an annual Council Tax on properties in portugal, based on the taxable patrimonial value of the property. This value is defined by evaluation and according to several criteria.

IMI tax is annual and it is based on the taxable patrimonial value described on the matriz predial and it is calculated:

Multiplying that amount by a percentage from 0,4% to 0,7% (urban properties) or from 0,2% to 0,4% (urban properties evaluated according the IMI rules). Properties destined as a main permanent dwelling (or rental property during the first transmission) may be exempt from paying the IMI, for a period from 3 to 6 years, depending on the taxable patrimonial value of the property.

This exemption must be required the latest 60 days after após a afectação do imóvel a habitação própria, and it shall occur 6 from the public deed.

 IMI Exemption Table (*) Taxable patrimonial value Exemption period (years) Exemption period (years) 8 Over 157.500 to 236.250 euros 4

(*) Urban housing properties, built, extended, improved, or purchased against payment for permanent habitational purposes of the owner or his/her household.

## 8 – Civil Duties

The purchaser’s identity card must be updated with the new address at the Civil Registration Office or Loja do Cidadão. The new address must also be presented at the Car Registration Office, in the IMTT or Loja do Cidadão, in order to update o registo de propriedade of your car.