Other than the purchase price, if you wish to buy a property in Portugal, such as a house to live in or as a real-estate investment, it is important to know what all the other costs associated with this purchase, in particular the final deed costs and the related taxes.
It is important to know these costs because they can add up and influence the decision to buy.
In Portugal, the costs related with the purchase of a property have to be payed by the buyer and not the seller.
Public Deed Costs
The public deed is known as “Escritura” or as a buy and sell public contract. The costs of the deed does not have a fixed price. These costs are composed by 3 elements; all of them variable in nature. 1. IMT (Property Transaction Tax), 2. IS (Stamp Duty) e 3. Legal and Registry fees.
The IMT (Imposto Municipal sobre Transacções onerosas de imóveis) or Property Transaction Tax , varies between 0.0% and 6.5.% of the purchased or fiscal value of the property, depending on several factors:
- The highest value, either the sell value or the fiscal value.
- Location of the property in Portugal, either in the main land or in Madeira or Azores;
- Type of property, rustic (eg. a field) or urban (building or part of a building);
- If it is an urban property, then it depends on its use:
- First House;
- Second house or for rental;
- Other uses such as commercial, services, etc.
This tax has to be payed before the signature of the public deed. The payment slip can be obtained from a tax office, see map of Porto tax offices, or in some notary offices.
You can use our IMT e IS simulator here.
The IS (Imposto de Selo) or stamp duty, is easier to calculate because it is a fixed percentage of the purchase price: 0.8%. it too also has to be payed before the signature of the public deed. The payment slip can be obtained together with the IMT payment slip.
Legal and Registry Costs
The public deed contract , needs to be made by a recognized entity or person such as a public notary office, a lawyer or solicitor. A popular choice are the “Casa Pronta” (Ready House) notary offices, where the process can be more streamlined and cheaper than normal.
For this reason, the reference in terms of price are the Casa Pronta notary offices, where it normally costs 375,00 €, including both the preparation of the public deed contract and the registry.
The notary offices have their own fess, some times they vary as a function of the sale value. Take for example the following table of prices, as seen here.
|from 0€ to 25.000€||117,65€|
|from 25.000€ to 125.000€||132,35€|
|from 125.000€ to 200.000€||147,06€|
|more than 200.000€||195,59€|
To these legal values, one should add the registry fee of 225€, plus VAT.
Other alternatives are particular lawyers and solicitors. Their fees are set individually and can vary with sale price, number of parties, number of copies, etc.
Finally, if the sale is financed with a bank loan then the bank can set the place and price of the final deed.
Bank Fees (When Necessary)
If you sue a bank loan one must consider the bank fees, these are normally fixed and set, but vary between banks. Also, there is an IS or Stamp Duty for the loan, in the value of 0,6% of the loan value. If there is a loan one must also account for two registries fees, one for the property and another for the loan itself.
Real-Estate Commercial Fees
In Portugal the norm it for the seller to pay the total real-estate commercial fee, which is then divided between the selling and the buying agencies and agents. But, it is also possible to hire and pay the buying agent his fees directly.
a) You have decided to buy a house to live in, with an agreed final price of 120.000,00€. The fiscal value is 100.000,00€, the final deed will take place in a Casa Pronta notary and you will pay with your own capital.
The costs of buying this house are:
IMT = 120.000,00 x 2% (0,02) – 1848,14 = 551,86€
IS = 120.000,00 x 0.8% (0,008) = 960,00€
Final deed legal fee and registry = 375,00 + 100,00 (other costs) = 475,00
Total = 551,86 + 960,00 + 475,00 = 1.986,86€, representing 2% of the purchase value.
b) You have decided to buy a shop, with a final purchase price of 200.000,00€. A fiscal value of 220.000,00€. You will finance part of the purchase and loan 150.000,00€, and the final deed will take place at the bank’s lawyer.
The costs of buying this shop are
IMT = 220.000,00 x 6.5% (0,065) = 14.300,00€
IS = 250.000,00 x 0.8% (0,008) = 2000,00€
Bank Fees = 800,00€
IS of the loan = 150.000,00 * 0,006 = 900,00
Final deed legal fee and registry = 500 + 225 + 225 = 950,00€
Total = 14.300,00 + 2.000,00 + 800,00 + 900,00 + 950,00 = 18.950,00€, representing about 10% of the purchase price.
To simulate the influence of these costs in the performance of a buy-to-let investment purchase, visit our simulator here.
Portuguese version here.
To learn more about the documents nedded for selling and buying a house, check this article.
Ana Rio Remax
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