This article on Buying and Selling Real Estate in Portugal was written by Drª Rita Branco • Lawyer • CP nº 296-F, with competences for the act. It is a purely informative article, with a clarifying character the main initial issues in the process of buying and selling real estate. However, it is recommended to be clarified by a lawyer or solicitor. In Portugal, only a lawyer or solicitor can provide legal clarification on the purchase and sale process, and draw up contracts for the purchase and sale of real estate. Any other entity may be incurring an illegal attorney.
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1. What documents do I need to buy a property in Portugal?
Portuguese law establishes that the contract for the purchase and sale of a property must be entered into by public deed or certified private document by a lawyer or solicitor. The public deed can be carried out (1) at a Notary Office in the presence of a notary, (2) at “Casa Pronta”, a service provided by the services of the Ministry of Justice , or at a (3) location in the presence of a lawyer or solicitor with powers to act. In this deed or particular document, the buyer and seller normally intervene. In special cases, other entities may intervene, such as representatives of credit institutions, attorneys representing the buyer or seller, spouses who must give their consent to the sale, interpreters in case buyers or sellers do not understand the Portuguese language.
Regarding the documents necessary for the deed, we can distinguish between (1) documents relating to the interveners and (2) documents relating to the property.
The documents and information relating to the intervening parties, necessary for the execution of the purchase and sale deed, or private document, are as follows:
In the case of natural persons:
- Identity card, or citizen card, or passport
- Tax taxpayer number.
- Information about personal data:
- marital status (married, single, divorced, widowed),
- marriage regime (separation of property, community of acquired property, general community of property),
- place of birth and respective parish and municipality)
In the case of legal persons, and specifically in the case of commercial companies:
- Certificate of Business Registration, issued less than a year ago and legal person identification card (other documents may also be required, such as minutes of the board of directors or the general meeting, depending on the type of company, its corporate purpose and the form of connection).
- Identification document of the legal representatives of the company who represent on behalf of the company (Citizen card or identity card, taxpayer).
- The query code of the declaration of (RCBE) Central Register of Effective Beneficiary of the legal person
The documents relating to the property, necessary for the execution of the purchase and sale deed, are as follows:
- Certificate of Land Registry, or, access code to the Permanent Land Certificate: with issue date less than six months ago by the competent Land Registry Office. This document will contain the description of the property and its registration in the name of the seller, and allows you to check if there are any charges or charges registered on the property, that must be canceled by the date of the deed, such as: mortgages, liens, easements or covenants of preference.
- Landbook: issued or updated less than a year ago by the Finance Service of the property area or obtained via the Internet by the property owner, this document allows you to verify that the property is registered in the name of the owner, its areas, composition, confines and taxable patrimonial value (tax value of the property after evaluation carried out by the Finance Service)
- Usage license: issued by the Municipality of the property area (in certain specific situations, the usage license may be replaced by the construction license or even waived, in the case of a property built before August 7, 1951, that is, before the General Regime for Buildings and constructions came into force, or if the property has a matrix registration (at the Tax Office) in 1937. This document allows you to verify that the property is duly licensed by the competent entity for housing, trade or services.
- Permanent certificate: issued by the City Council of the property’s area, proof of provisional receipt of the urbanization works or proof of the provision of sufficient security to guarantee the completion of the urbanization works (only when the first transfer of properties built in lots or of autonomous fractions of these properties is in question);
- Documents proving the waiver of the respective preemptive rights: issued by the City Council and/or by IGESPAR – Institute of Archaeological and Architectural Heritage (only in cases where the law grants these preemptive rights to the said entities) or the adjoining ones in the case of a Rustico building.
- Energy and Indoor Air Quality Certificate in Buildings.
- The query code of the declaration of (RCBE) Central Register of Effective Beneficiary, in case the grantor is a legal person.
At the time of the execution of the public deed of purchase and sale, the buyer must deliver to the Notary or the Lawyer/Solicitor the settlement slips regarding the taxes owed by the buyer: Municipal Tax on Onerous Property Transfers (IMT) and Stamp Duty (IS) with proof of payment, except in situations where the acquisition is exempt from this tax (IMT)
If you want to use bank credit to finance the purchase, the buyer must confirm which documents are required by their bank. In these situations, one of the requirements usually required is the submission of records Provisional Acquisition and Mortgage.
2. When I want to buy a property, should I enter into a promissory purchase and sale agreement or not?
After analyzing all the documentation of the property and all the assumptions and constraints related to the acquisition of the property, the preparation of the promissory purchase and sale contract will be carried out, that is, the contract through the which the parties undertake, by mutual agreement or unilaterally, to enter into a certain future and definitive contract. Signing a promissory purchase and sale agreement is convenient in situations where there is an interest in securing the business, however the necessary conditions for the purchase and sale deed are not yet met. This situation can occur for several reasons, namely because the construction of the property has not been completed, because the constitution of the horizontal property is still pending, because the property does not have a license to use, or because the buyer does not have the amount necessary for the payment of the price or still awaiting approval of bank financing for the acquisition.
- By entering into a purchase and sale agreement, the parties can immediately bind themselves (at a time when they do not yet have all the necessary documentation, or interest in the conclusion of the deed) ensuring that, within the agreed period, they will formalize the purchase and sale. In this contract, the parties guarantee legal security in case of delay or breach of contract.
Usually, the decision to enter into a promissory purchase and sale contract is related to the need to urgently formalize a binding document between the purchaser and the seller, ensuring the reservation of future business with the formalization of a public deed of purchase and sale.
The decision whether or not to enter into a promissory purchase and sale agreement is an optional decision by the parties (buyer and seller of the property).
3. What are the essential elements of a promissory purchase and sale agreement?
The content of a promissory purchase and sale agreement may vary considerably depending on the specific circumstances of the parties, the situation of the property covered by the contract and the intended business model. Therefore, the promissory contract can and should contain all the conditions and obligations that were at the basis of the business, namely, essential and ancillary clauses, any suspensive or resolutive conditions that may have been defined, definition of price and payment terms and conditions, date setting for the deed of purchase and sale of the property, identification of applicable warranties and penalties, and all remaining clauses necessary to safeguard the interest of buyers and sellers of the property.
On the other hand, the analysis of the property documents may reveal circumstances related to the property that should be taken into account in the terms of the promissory purchase and sale agreement. It is common, for example, to include in the promissory purchase and sale agreement the obligation of the seller to regularize any non-conformities found in the property’s documents. Finally, the physical conditions of the property may also justify the inclusion of specific provisions in the promissory agreement. It is common to include in the promissory contract obligations of the seller to promote certain works or repairs to the property, before the signing of the public deed of purchase and sale.
In short, we can indicate the following essential elements that must be included in a promissory purchase and sale agreement:
- Full identification of the parties (for individuals: name, place of birth and nationality, marital status, residence, identity card/citizen card number and tax number; and, for individuals collectives: corporate name, registered office, capital, registration and legal person number and identification of who represents the company, mentioning the quality and powers with which it does so);
- Complete identification of the property object of the promise: (location and composition, description number of the property with the Land Registry Office, matrix article under which the property is registered with the Finance Service and number, date of issue and issuing entity of the license for use or construction or mention of its waiver);
- Stipulation of the promise, specifying: if it is a bilateral or unilateral promise and, whether or not the property is acquired free of liens, charges or other responsibilities, and free and unoccupied by persons and goods;
- Price and payment method, including the indication of the amount of the deposit and the respective reinforcements, if applicable;
- Deadline for the completion of the purchase and sale deed and indication of who should proceed with the respective appointment;
- Any conditions to which the parties intend to subject the purchase and sale of the property and the consequences of its non-verification;
- Indication of the guarantees and duties of the parties involved in the business, for example:
- Declaration for due legal purposes that on the date of the deed of purchase and sale of the property, the property will be duly demarcated under the legal terms for the purposes of the land registry, the areas contained in the property matrix coincide with the property description and the plans approved by the Municipal Chamber through the license of use;
- Declaration that in the preliminaries and in the formation of this contract, the Promised Buyers did not omit any information or fact that the Promised Buyers should have knowledge in considering their willingness to carry out the business, either as to the physical and legal state of the building , which may have direct or indirect implications on the present sale of the vacant property and free of charge or liability;
- Declaration that the property is duly registered at the Land Registry Office and registered in the matrix, in your favour;
- The existing areas and constructions will correspond to the areas and composition described in the respective documentation, matrix, building and City Hall, so in case of discrepancy it must be rectified before the date of the deed;
- That the property is free of any liens, mortgages or liabilities, and unoccupied;
- To the best of your knowledge, there is no notice, claim, arbitration or other proceeding pending or threatened by it, which would affect your right to the Building, before the Court, of any government department or local authority that in any way affects or will affect the fulfillment of the duties set forth herein;
- With the exception of the clauses of the promissory agreement, there is no promissory lease or other agreement, of any nature, related to the Building or part of it, which may materially restrict or limit the use or disposition of the same by part of prospective buyers;
- Proof that there are no debts to the tax authorities related to the properties, resulting from the acquisition or use by the prospective seller;
- That the building is in regular habitable conditions and with all its equipment and internal networks and installation of water, electricity, sewage, gas in normal operating conditions and has not undergone any type of change in its configuration and confrontations;
- If, on this date, there is any insurance policy on the property object of this contract, the Promised Sellers undertake to keep it in force until the date of the public deed of purchase and sale.
- Indication of the method of notification and location, mandatory mention of the intervention or non-intervention of real estate mediation.
- Consequences in the event of breach of contract, namely, subjection to the specific execution regime provided for in article 830 of the Civil Code.
- The competent court to hear any dispute arising from the contract. As a rule, the District Court will be competent for the location of the property object of the contract or the parties may opt for the Arbitration Court.
In the case of a promissory purchase and sale agreement relating to the execution of an onerous contract for the transmission or constitution of a real right on a building, or an autonomous fraction thereof, already built, under construction or with construction forecast, the promissory agreement of purchase and sale must contain the in-person acknowledgment of the signature of the promissory or promissory parties (depending on whether it is a unilateral or bilateral promise) and the certification, by the notary, of the existence of the respective license for use or construction .
4. What does it mean to “assign the contractual position” of a promising buyer in a promissory purchase and sale agreement?
The promissory purchase and sale contract may provide for the prospective buyer to assign its contractual position to a third party. If the promissory purchase and sale agreement does not provide for the possibility of assigning the contractual position, the assignment of the contractual position is subject to a prior authorization to be provided by the promising seller. Assigning the contractual position means transmitting to a third party the position of promising buyer in a given purchase and sale promissory contract, this third party becoming the holder of all rights and duties that emerge for the promising buyer of this promissory contract. The assignment of a contractual position, investing the third party in the position of promising buyer, results in the disengagement of the promising initial buyer. Both the assignment of the contractual position, as well as the simple possibility of assignment provided for in the promissory purchase and sale agreement, have IMT tax obligations. In fact, the tax law assumes the existence of an onerous transfer whenever there is an assignment of the contractual position (current or potential), taxing it as if it were a true transfer, that is, the tax is levied on the down payment amount paid by the buyer with the rate applicable to the total amount.
Whenever the definitive purchase and sale agreement is entered into, or the tax event occurs before the conclusion of the definitive contract that operates the legal transfer of the good, and the contracting party has already paid the tax due, there is only place for additional settlement when the amount that competes for the definitive transmission is greater than the amount that served as the basis for the previous settlement. If the purchaser benefits from a tax reduction or exemption, the tax will be partially or totally cancelled. The inclusion of clauses in the promissory contract that allow or foresee the possibility of the prospective buyer assigning its contractual position to a third party must always be carefully considered, taking into account the associated tax consequences.
5. What are the consequences of non-compliance with a promissory purchase and sale agreement?
The consequences of non-compliance with the promissory contract can be foreseen in the contract itself. In the absence of specific stipulations in the promissory purchase and sale agreement, the general rules provided for in the Civil Code apply.
The Civil Code establishes the following additionally applicable rules:
- In case of default on the part of the promising buyer, he will lose the deposit he has delivered in favor of the promising seller;
- In case of default on the part of the promising seller, this constitutes the obligation to return, in double, to the promising buyer the deposit that he has already paid; as an alternative to refunding the down payment in double, in situations where there has been transfer of ownership of the property, the prospective buyer can demand the value of the property objectively determined on the date of non-fulfillment of the promise, with deduction of the agreed price, which must still be you will be refunded the down payment and the part of the price that has been paid;
- In the promissory contract, the deadline must be indicated for it to be considered that there is a default and not just a delay (delay in the fulfillment). It may be indicated that a definitive breach will be considered whenever and when a party is in default (delay in compliance) the counterparty proceeds with an admonitory notice (send a written communication) of the latter, setting a reasonable period for the fulfillment of the obligation in question and the same repeats in the non-fulfillment of its obligation within the same.
- Therefore, the parties must immediately establish in the contract the period considered reasonable for compliance, under the terms and for the purposes of articles 801 to 808 of the Civil Code, after the expiration of the obligation to grant the deed so that this delay (delay) becomes definitive default.
- If the party fails to comply again on the date indicated, the counterparty must send a new written communication in the terms agreed in the contract indicating that the contract is considered definitively breached, losing the deposit or giving the party the right to receive what it paid in double.
As an alternative to the above-mentioned indemnities, the non-defaulting party may choose to request the court for the specific performance of the contract, with a view to obtaining from the court a judgment that replaces the business declaration of the defaulting borrower, thus obtaining the enforced performance of the contract -promise to buy and sell.
6.What is a provisional registration? When I want to buy a property, what registrations should I do?
The Land Registry Code provides for the possibility of making provisional registrations. The provisional acquisition registration is the registration of the acquisition in favor of the buyer, before the execution of the purchase and sale deed. The seller declares in the act of registration that he has promised to sell that property to the buyer for the price defined in the promissory purchase and sale contract. The provisional mortgage registration consists of registering a mortgage on the property before the respective mortgage deed is signed (which in most cases is signed together with the deed of purchase and sale). These records serve to guarantee registered priority in relation to any other records, that, by hypothesis, could be promoted by third parties up to the date of the deed (such as pledges or mortgages). The request for provisional registration of acquisition must be signed by the prospective seller (his signature must be recognized in person, or, alternatively, the registration request must be signed in person at the Land Registry Office). If there is a signed purchase and sale agreement and with the signatures recognized, the registration request can be signed by a lawyer/applicant or by the promising buyer, provided that the registration request is accompanied by the promissory agreement (or a certified copy the same).
Regarding the provisional registration of the mortgage, the respective application must be signed by the prospective buyer (his signature must be recognized in person, or, alternatively, the application for registration must be signed in person at the Land Registry Office), provided that he has previously submitted the provisional registration of acquisition in your favor (in practical terms, these registrations are presented simultaneously, and the acquisition will be registered before the mortgage). Provisional registrations expire six months from the date of submission, if they are not converted into definitive (although they can be renewed). After the granting of the notarized deed/private document of purchase and sale and mortgage, when applicable, the provisional acquisition and mortgage registrations must be converted into definitive (retroacting the effects of the acquisition and mortgage, for registration purposes, to the date on which requests for provisional registrations were submitted). While it is true that provisional registrations usually only take place when there is acquisition financing (because they are a requirement by the bank), the truth is that the provisional registrations of acquisitions even when no bank is involved constitutes an additional guarantee for the buyer.
In fact, a provisional registration of acquisition can give the buyer the security of knowing that, when making his deed of purchase and sale, he will be able to convert the registration of acquisition into definitive, removing the registration of other burdens or charges that may have been in the meantime. registered on the property. If provisional registrations are not made, neither of acquisitions nor mortgages, the registration of the acquisition must be carried out immediately after the granting of the public deed of purchase and sale. Finally, it should be noted that any application for registration must be accompanied by the land register or certificate of matrix content of the property.
7. What is the Housing Data Sheet?
The Technical Housing Data Sheet is a document that describes the technical and functional characteristics of the housing, and it is mandatory to present it on the date of the deed/private document for all properties whose application for issuing a license of use has been submitted after March 30, 2004. Whenever the acquisition of a new property for housing is in question, a copy of the Technical Data Sheet for Housing or the Provisional Technical Data Sheet for Housing must be requested if the property has not yet is complete. The law establishes that the Technical Housing Data Sheet cannot be handwritten (with the exception of the technicians’ signatures) and must be written in Portuguese in a clear and understandable way to the recipient. The Housing Technical Sheet must contain information on the main professionals involved in the project, construction, reconstruction, expansion or alteration, as well as information on the real estate developer, on the subdivision, on the urban building and on the autonomous fraction or single-family dwelling that is concerned.
The following are also mandatory information, which must be included in the Housing Data Sheet:
- Housing guarantee, as well as its activation mode in case of fault detection;
- Condominium operating rules, if any, and service contracts that have been entered into;
- Maintenance rules for installed equipment that require special handling.
The plans referring to the development, building and autonomous fraction, must be identified in the proper place of the Technical Data Sheet and constitute an annex that is an integral part of the document. The development of the Technical Data Sheet for Housing is the responsibility of the property developer, who, together with the technician responsible for the work, must sign this document, attesting to the veracity and compliance of the information contained in the Technical Data Sheet for Housing with the architectural and specialty projects related to the property. Deeds for the purchase and sale of properties for which a license for use has been requested after 30 March 2004 can only be carried out if the Technical Data Sheet for the property in question is shown to the notary/lawyer. This obligation applies to both first transmissions and all subsequent transmissions. The owner has the obligation to keep the Technical Data Sheet for the property while the property belongs to him and, in case of sale, he must hand it over to the new owner. In case of loss, loss or damage to this document, the owner may obtain a second copy of the Technical Data Sheet from the property developer or from the competent City Council. The promoter is obliged to keep the respective Technical Housing Data Sheet for a period of 10 years, given that the Housing Technical Data Sheet will also be filed with the competent Municipal Council.
8. What documents should I require and what precautions should I take before signing the Public Deed/Certified Private Document for the purchase and sale of a property?
Prior to the purchase of a property, a series of checks must be carried out in order to confirm its legal status. Many of the issues associated with the legal status of the property can be verified through the documents relating to the property, which are usually provided by the seller, which have already been mentioned in connection with the answer to question No. 1.
In any case, the entities from which documents relating to a property can be obtained are indicated below, as well as the information that can be obtained from such entities.
At the competent Land Registry Office you can obtain a land registry certificate for the property and verify the following situations:
- If the building actually has the description indicated by the seller and if it is the same as the one indicated in the building passbook and in the Project approved by the City Council and use license issued by it;
- If the seller is the current and sole owner, he is therefore entitled to sell the property;
- If there are no mortgages or liens registered or pending registration, in favor of third parties;
- If there are no other rights registered or pending registration, which may restrict the use of the property.
At the Finance Service of the property’s area, you can obtain a land book or matrix certificate of the property and check the following situations:
- If the property description with the finances matches the property description contained in the land registry certificate;
- If the property is vacant (this confirmation is not absolute, as there may be lease contracts in an irregular situation, ie, which have not been declared with the Finance Department)
- If there are still no amounts related to the Municipal Property Tax (IMI) to be paid or if, on the contrary, there are tax debts of this nature for which the property may be liable.
- Verify if the Property has already been appraised according to the CIMI rules and what is the Tax patrimonial value of it (amount on which the municipal property tax will be levied)
At the competent City Council, certificates of use or construction licenses can be obtained and also check the following situations:
- If construction / use licenses have already been issued for a property and if what is built corresponds to the approved project.
- If the land is located in an area authorized for urban constructions, and if a subdivision permit has been issued, whichever is the case (in the case of land acquisition for future housing construction);
- What are the characteristics of the property that can be built (in the case of a property to be built on land with authorization for construction);
- If there are preemptive rights in favor of the City Council or the State, relating to the property.
The documents required for the deed/private document are those indicated in the answer to question no. 1 Purchase and sale of property in Portugal.
In addition to the documents mentioned above and in addition to the verifications indicated above, it is also important to verify if there are preemptive rights in favor of third parties other than the State (owners of adjoining buildings, in case it is concerned the transfer of a rural property, or owners of other rural properties located in the same area, in the case of a rural property included in a National Agricultural Reserve zone, tenants of the property, etc). If there are preemptive rights in favor of third parties, the seller must be required to provide proof that the holders of the respective preemptive rights have been notified to exercise such right and that they have renounced the exercise of the same (expressly or because they have allowed the deadline to pass for this purpose ). Finally, in the event of a mortgage on the property, the seller must be required to ensure the respective cancellation, presenting, at the latest on the deed date, a cancellation document. This situation is frequent, considering that it is usual for property developers to finance their promotions by offering the properties object of the promotion as collateral, subsequently proceeding with the cancellation of the mortgage for each autonomous fraction, plot of land or house, as they are being sold.
In addition to the legal aspects mentioned above, before purchasing a property, the buyer must always carry out a verification of the physical situation of the property (confirmation on site, areas, characteristics and delimitation of the property, its location, state of conservation, activities carried out by neighbors likely to harm the use of the property, etc).
9. When do I have to pay Municipal Property Transfer Tax (IMT)? How is the taxable amount calculated?
If this tax is not exempt, the payment of the IMT must be made to the competent Finance Service or via the internet (https://www.e-financas.gov.pt), before the purchase and sale deed is completed by the buyer. The value that serves as the basis for the settlement of the IMT is the taxable patrimonial value of the property or the transfer value, whichever is higher. The amount of the IMT is determined by applying the rates provided for in the IMT Code, which are distributed by brackets. Both the scales and the rates are usually changed annually, by the Law that approves the State Budget.
10. Is there an exemption from the Municipal Tax on Transfer of Property (IMT) in the case of acquisition of property intended for housing?
As a general rule, exemption from IMT must be requested before the act or contract that gave rise to the transmission and always before the settlement that would be effected. You benefit from exemption if you purchase a property exclusively intended for permanent and own housing, and if the taxable patrimonial value or the declared value of the property does not exceed the value provided for in article 9 of the CIMT, that is, 92,407,000 euros . These benefits or rate reductions also apply to the exchange of real estate if the real estate you receive is intended for permanent housing, or is intended exclusively for housing, and if the difference in taxable equity values or the declared difference in values (the largest of the two) between the property that delivers and the one that receives, it does not exceed the value foreseen in article 9 of the CIMT. The exemption benefit applies only to urban buildings intended exclusively for permanent housing and not to land intended for the construction of these properties. If the property is given a different destination within six years from the date of acquisition, except in the case of sale, if the properties are not used as permanent dwelling within six months from the date of acquisition or if, if there is a place for the evaluation of the good that must take effect in the context of IMT, the VPT is higher than the value provided for in article 9 of the CIMT.
What are the IMT fees?
- Rustic buildings: 5%
- Urban buildings exclusively for housing: 1% to 7.5%
- Urban buildings exclusively intended for permanent housing: 0% to 7.5%
- Other buildings and other acquisitions: 6.5%
- Buildings acquired by entities that have tax domicile in a country, territory or region subject to a clearly more favorable tax regime, included in the list approved by order of the Minister of Finance: 10%
IMT Payment Deadline?
As a general rule, the IMT must be paid on the settlement day or on the 1st following business day. If the act or contract is entered into abroad, the tax must be paid and paid during the month following the transfer.
What other taxes and costs are levied on the purchase and sale?
About the purchase price: 0.8%.
This tax is paid by the buyer at the time of the deed of purchase and is levied on the taxable equity value or value agreed between the parties, whichever is higher.
About the loan amount:
Stamp Duty without credit grant (TGIS Budget 17.1):
- Up to 1 year, for each month or fraction: 0.04%;
- From 1 to 5 years: 0.5%;
- 5 more years: 0.6%.
Deed/Private Document and Land Registry Fees:
The fees for the deed or private document depend on the notary or lawyer/applicant who drafted the document. Land registration for acquisition at the registry will cost approximately €250 euros, if requested at the Repartição, or an approximate value of €225 euros, if requested online.
What steps to take after signing the deed of purchase and sale?
The responsible lawyer or Notary must register the acquisition in the name of the buyer within 10 days of signing the purchase and sale deed or private document. In addition to the registration of the acquisition at the Registry, the registration of the Acquisition must be made in the name of the new owners. From the date of acquisition, the new owners will be responsible for paying taxes and expenses for the property.
What taxes are due upon purchase of the property?
IMI (Municipal Property Tax)
This is the annual Municipal Tax, which is levied on the taxable patrimonial value of the housing. This value will be determined by evaluation against various criteria. IMI is an annual amount, it is levied on the tax equity value contained in the property matrix and is calculated by multiplying this value by a percentage that can range from:
- 0.3% to 0.45% (urban buildings)
- 0.2% to 0.4% (urban buildings assessed by IMI rules)
- 0.8% (Rustic Buildings)
In the case of mixed buildings in Portugal (comprising a rustic part and an urban part), the respective rate will be applied to the taxable patrimonial value of each part. Buildings that are owned by entities with tax domicile in a country, territory or region subject to a clearly more favorable tax regime, included in the list approved by Ordinance 292/2011, of November 8, commonly known as “offshore”, are taxed at rate of 7.5% regardless of the type of building they own. This increased rate is not, however, applicable to the building(s) owned by natural persons. Municipalities, upon deliberation of the municipal assembly, may increase or reduce the above-mentioned general fees in certain situations provided for in article 112 of the IMI Code.
Houses intended for permanent and own housing (or rental housing in the first transmission) may benefit from temporary exemption from this tax, for a period of 3 years, if the property’s taxable asset value is up to €125 000, as long as the household income do not exceed €153 300. There may be permanent exemption for low-income families (less than €15 295) with a VPT of less than €66 500.
This exemption must be requested, 60 days after the allocation of the property to own housing, which must occur within a maximum period of 6 months from the deed of the property at the notary or from the authenticated private document
(*) Urban residential buildings, built, expanded, improved or acquired for consideration, intended for the owner’s or household’s own permanent habitation.
This article is by Rita Branco • ALLAWYERS • Advogados
Rita Branco is a member of the Portuguese Bar Association, co-founder of the law firm ALLawyers, in Portugal • CP nº 296-F. For more information on legal matters relating to the above article, consult the contacts on the website https://allawyers.eu
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