How to Buy Portugal Property
As with any property purchase, first determine your budget and exact requirements. Portugal may be a relatively small country, but from an old farm ready for conversion in the Douro valley to a golf villa or ocean-side apartment, there’s plenty of choice. There are many well publicised developments and English-speaking estate agents, but remember that outside the main tourist areas many properties are sold privately. So, look out for ‘For Sale’ signs – vende-se or para venda – and approach owners direct.
Before serious negotiations begin, appoint a lawyer (advogado), to work on your behalf. There are many English-speaking lawyers in Portugal and it is vital you fully understand all legal documents, so do get them translated. You should steer clear of lawyers recommended by developers – they are unlikely to be truly independent.
The better your research and the more you know about the local market, the more ammunition you will have at this stage. Many Portuguese vendors have had a relatively easy time selling to the British over the past decade, but with the market softening you are now in a position to bargain. There might be talk of paying part of the purchase price in cash ‘under the table’ so the seller avoids paying capital gains tax. The practice, although quite common, is illegal and attracts severe penalties. It is also disadvantageous to you when you come to sell, because you will face a higher capital gains tax bill.
Once there is a verbal agreement on price, a small deposit (about €1,600 to €2,400) is paid for the property to be taken off the market while your lawyer prepares the paperwork. Include a clause in the contract that this sum is refundable if your lawyer finds any problems and you decide to pull out. If you are buying off-plan (a new property before it is built) on a new development, normally you are required to pay the purchase price in stages.