The Costs of Buying a Property
Whether considering a cash purchase or financing the property through mortgage borrowing, there are several costs which have to be met by the purchaser.
• The Deposit (Entrada) - usually between 10% and 20% of the purchase price
• The Portuguese Government Property Tax (Imposto Municipal sobre Transmissoes).Generally, the amount of tax is different for each type of property and depends of course on the amount that was paid for it. For example, in the case of an urban property for permanent residence the marginal rate varies from 1 to 8%, except for properties valued up to 92,407 euros, which are exempt from IMT.
For urban buildings for secondary residence and rental, the rate applied is the same, 1 to 8%. The government also establishes for rustic buildings: 5%.
• The purchaser will also be liable to Notary Fees and Land & Property Registration Fees, which vary according to the purchase price of the property. A lawyer acting on the purchaser's behalf will usually sort this out but a list can be obtained from the local municipal or town council (Camara Municipal)
- A useful place for information and advice on Notaries are the Citizens' Shops (Lojas do Cidadao)
With our experience, we generally calculate that the costs for the buyer is around 6% of the value of the property. But, we always advise that you have a lawyer or legal representative for these issues, as they are always changing.
• Stamp Duty (Imposto de Selo) - The tax is levied on the purchase price, check the IRS website for more information.
• The costs of the mortgage (Crédito Habitação)
With our experience, we generally calculate that the cost for the buyer is around 6% of the value of the property. But, we always advise that you have a lawyer or legal representative for these issues, as they are always changing.