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When you buy a property in Portugal in your name, the first step is the Preliminary or Promissory Contract (Contrato Promessa de Compra e Venda). This is a legally binding contract between vendors and buyers signed before a Notary. Upon this signature the buyer generally pays a 10% non-refundable deposit. The contract usually states exactly who the buyers and vendors are, a description of the property, confirmation that there is clear title, and the terms of payment and completion. Both parties should be represented by a local lawyer.
Upon completion, the Escritura (Final Deed) is signed in front of the Notary who checks all the documentation and sees that the IMT (property purchase tax) has been paid. At this stage, the full purchase price is also paid. From time to time and with the agreement of both parties, a part of the purchase price may be withheld from the vendor until certain aspects of the deal are fulfilled. For example, there may be a snagging list to deal with. In these circumstances, the buyer’s lawyer generally holds the ‘retention’ until all paperwork and other outstanding issues are resolved.
Once the deed and all other associated transactions are completed, the buyer’s lawyer registers the new owner of the property in the Land Registry (Registo Predial). Buyers should request a copy of this registration for their files. |
