Before putting in an offer on a house, be aware of the aggregate costs: buying Property in Portugal costs plainly explained.
Aggregate costs can ruin a good plan; accordingly, you should spend time familiarising yourself with the costs related to buying property in Portugal.
While costs are not the only pitfalls when buying property in Portugal, before putting in an offer on a house, it is important to be aware of the aggregate costs of buying a property in Portugal. The costs associated vary according to the price, location and type of the property. Some taxes that you should be aware of:
IMT – A rate is applied whenever there is a change in the title to the property. This rate can be found in the Portuguese revenue website (Finanças) and there are online simulators for this tax.
The calculation is levied on the greater of the two values: the patrimonial tax value of the property or the value declared in the deed of purchase and sale. For instance, a property in mainland Portugal to be used as the owner’s permanent residence, for the price of €200.000 euros is assessed at €4,912.78. It is important to note that this tax needs to be paid before the deed of purchase and sale is signed.
STAMP DUTY – This is levied at a flat rate of 0.8% of the selling price of the property.
IMI – Annual property tax, calculated based on the rateable value of the property, set by the revenue, to which a rate is applied. Please note the possibility of exemption from IMI, which applies to properties for personal and permanent habitation.
REGISTRATION COSTS – You can choose a lawyer to legally sign and register the deed (Escritura) of the purchase of the house. There is a cost involved to set up and registration of the final deed which varies between €400 to €800.
FISCAL REPRESENTATIVE until such time as you might become resident you will need to arrange a fiscal representative in Portugal in order to ensure that you are informed of tax matters that relate to you.
Being assisted by a local, expert lawyer in English is a good way to ensure a better landing for your conveyance plans in Portugal. Get in touch and make life easier.