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Portuguese Mortgage Information

Portugal boasts a record of over 300 days of sunshine each year. Throw in some of the best and most photographed beaches in Europe and you have a destination which has to be high on a list of places to buy property.

 

Despite being one of the smallest and least developed countries in European terms, Portugal has one of the fastest growing economies in the EU and as such, you can still obtain good value for money when purchasing a Portuguese property with the real possibility of an increase in property value.

 

As with most countries, when you purchase a property abroad, you will have a number of choices as to how to finance the deal. All Portuguese mortgages are full status and proof of income and outgoings will be required. Portuguese mortgages can be arranged for acquisition, renovation and construction and the mortgage is secured on the property in Portugal.

 

A deposit of 20% of the purchase price is required and you will also be liable for solicitor's fees. Euro mortgages are available, and the minimum loan amount you can borrow depends on the lender you use. Mortgages are generally Repayment loans and can be taken over a 5-25 year term, although some mortgage lenders will be happy to provide Interest Only loans. All mortgages should be fully repaid by the age of 75 and life cover is required.

 

Taxes & Other Costs

 

You will have to apply for a fiscal number, (numero fiscal de contribuente), the equivalent of a UK national insurance number, from the local tax office. Your solicitor can arrange this for you.

 

Once all conditions as set out in the original contract have been met, the final deed is drawn up and signed by both parties at a public notary office (the notario). You must pay a transfer tax called IMT (imposto municipal sobre transmissões onerosas) before the purchase goes ahead.

 

0% to €80,000
2% - 6.5% thereafter
5% for land.
If the buyer is in a low tax regime the rate is 15%.

 

Autarquica - annual municipal tax. The rates are based on valuations determined by tax authorities and as a general rule are much lower for older properties. The rates are fixed by each municipality 0.8% on land and 0.7% - 1.3% on buildings.

 

The notario will witness the signing of the final deed and the “escritura” is registered at (Conservatória do Registo Predial, the local land registry office, and at the local tax office (Repartição de Finanças).