How to Buy Property in Portugal

Seven stages, from first decisions to registration of the property in your name.

Before viewing properties, define what you are buying and why. The intended use of the property influences the taxes, the documentation to review, the type of property that fits and even the regions worth shortlisting.

Set an approximate budget that includes acquisition costs, not only the asking price, and decide early whether the purchase will be funded in cash or with financing, because financing changes both the timeline and the contractual protections you should ask for.

Next: Prepare to buy

Most of the practical groundwork can be completed before you find a property. International buyers normally obtain a Portuguese tax identification number (NIF), arrange a way to make payments in Portugal and, where financing is involved, start the mortgage conversation early.

If you will not be in Portugal for key moments, arrange representation in advance rather than at the last minute, and confirm which requirements apply to your specific transaction.

Next: Search and compare

Narrow the location before narrowing the property. Regions differ in price, seasonality, rental demand, accessibility and the type of stock available, and a property that suits a permanent home may not suit occasional use.

Compare new-build and resale carefully: they differ in condition, documentation, warranties, timing and the checks that should be carried out before any payment.

Next: Make an offer or reservation

The commercial sequence usually starts with an asking price, followed by negotiation and a written offer. Where a reservation is used, the property is taken off the market for a defined period, often against a reservation payment.

Reservation documents vary widely. Some are simple confirmations of interest; others contain binding commitments, deadlines and conditions for the refund of the amount paid.

Next: Carry out due diligence

Due diligence is the stage where the property is verified rather than assumed. The appropriate checks depend on the transaction, and off-plan or tourist developments normally require additional documentation.

Depending on the transaction, the checks may include:

Next: Review and sign the promissory purchase agreement

In most Portuguese transactions the parties sign a Contrato-Promessa de Compra e Venda (CPCV) — a promissory purchase agreement — before the deed. It records the agreed terms and the deposit, and it governs what happens if either party fails to complete.

A CPCV normally addresses:

Next: Complete the purchase

Completion brings together the final checks, the payment of purchase taxes and the signing of the deed or equivalent authenticated instrument, at which point the balance of the price is paid.

After signing, the acquisition is registered and the keys are handed over. Ownership passes under the deed or equivalent authenticated instrument; registration gives the acquisition publicity at the Land Registry and is what allows it to be relied upon against third parties, so it should not be postponed.