The process for buying property in Portugal is not the same as in the UK and it is important to understand the differences to ensure your purchase can go ahead as smoothly as possible while keeping you and your money safe.
To avoid the many potential pitfalls involved in buying in Portugal, we strongly recommend getting help from a legal team who have decades of combined experience helping UK buyers to navigate Portuguese property law.
At Judicare, our UK-based property lawyers have vast experience helping clients with all of the legal issues involved in buying property in Portugal, including:
- Conveyancing for Portuguese property
- Obtaining Portuguese tax identity numbers (Número de Identificação Fiscal)
- Creating Powers of Attorney allowing someone else to safely complete the transaction for you while you remain in the UK
- Guidance on different ownership options (e.g. company ownership & fractional ownership)
- Notifying relevant authorities and organisations about your purchase
- Inheritance planning for Portuguese property
We know all of the ways in which Portuguese law interacts with UK laws, so can ensure you comply with the strict requirements of both. Having seen all of the problems that can arise for UK residents buying in Portugal, we can offer tried-and-tested solutions that work.
Whether this is your first time buying abroad or you are more experienced in these matters, our Portuguese property law experts can make the process easier for you, helping you to avoid problems and complete your purchase on schedule.
To help demystify the process of buying property in Portugal, we’ve put together a list of useful Portuguese legal terms and their English translations. You may also want to take a look at our Buying Property in Portugal Checklist.
For specific advice on buying Portuguese property tailored to your needs, please get in touch with our friendly, expert Portuguese property lawyers based in the UK.
How Judicare can help you with buying a property in Portugal
Clear guidance on Portuguese property law
Portuguese property law is very different to that in the UK, so it is important to get clear, practical advice on how it works and what you need to do. Our team can assist with this, as well as guiding you through Portuguese inheritance laws and any other legal issues you will need to consider.
We can also make sure you fully understand how laws in Portugal and the UK interact when you buy and own a property in Portugal, so you can be sure you are meeting your legal obligations in both countries.
Conveyancing for Portuguese property
Our UK-based Portuguese property team can handle the entire legal process for buying in Portugal for you, including:
- Reviewing promissory contracts of sale
- Carrying out essential property and Land Registry checks
- Raising any necessary queries with the seller’s lawyers
- Negotiating amendments to the sale contract where required
- Transferring the deposit to the seller
- Handling payment of the balance
- Making sure the property Title is correctly registered in your name
- Dealing with Transfer Tax (IMT – Imposto Municipal sobre as Transmissoes Onerosas de Imóveis)
- Organising and attending the Public Deed at the Notary
- Paying of all relevant Taxes to the various Authorities
- Organising and handling the transfer of utilities
If you wish to make the purchase without leaving the UK, we can create a Power of Attorney giving someone the legal authority to complete the purchase on your behalf.
Getting a mortgage to buy property in Portugal
There are two ways of financing your purchase in Portugal through a mortgage:
- Releasing equity from your UK assets
- Getting a mortgage on the property from a lender in Portugal
We can advise you on the advantages and disadvantages of each approach to make sure you are aware of how either option will affect you and which is likely to be the most cost-effective for your circumstances.
Our recommended international mortgage broker is Simon Conn – overseas mortgage broker – who will be able to assist you with this aspect of your purchase in Portugal.
In recent years, it has become harder to get a mortgage in Portugal than it used to be. If the property already has a mortgage on it, one option can be to take over that mortgage from the current owner. While this might seem like the easy choice, it is important to consider whether the existing mortgage offer a good deal for you – just because a particular mortgage deal made sense for the seller, that doesn’t mean it will work for you.
Our team will be happy to advise you on the terms of the seller’s mortgage and whether we believe taking it over makes sense for you or if you are likely to be better off seeking your own finance.
For more information, please take a look at our guide to mortgages on foreign properties.
Finding a currency dealer
Getting a good exchange rate when buying in Portugal can make a difference of thousands of pounds to the real cost of your purchase. It is therefore essential to spend some time making sure you are getting the very best deal for your currency exchange.
We are not a bank or currency dealer, but we do have a lot of experience in helping clients to find the best currency exchange deals for buying property in Portugal. Our team is regularly approached by a wide range of currency dealers and we have gone through a screening process to make sure our clients get the best service available. Foreign Currency Direct is our company of choice as they regularly beat their competitors and deliver a high-quality service.
Foreign Currency Direct have increasingly sophisticated products. You can agree rates for the future. You can get them advising you when to buy or agreeing to buy for you when the rate hits a certain level. You can even agree a fixed rate for longer periods of time if you make regular payments abroad (for example for a mortgage or moving your pension money).
We will normally receive a commission for introducing them to you. This does not cost you anything more as they pay us part of what they make. This commission is costed into our overall charges for providing our services.
Obtaining your NIF (Número de Identificação Fiscal)
Your NIF (Número de Identificação Fiscal) is your Tax Identity Number in Portugal. The literal translation is ‘Foreigner’s Identity Number'.
There are several times when you are likely to be required to produce your NIF number;
- When you buy a property
- Opening a bank account
- Dealing with the utility companies
- Taking out insurance
- Dealing with the tax authorities
- Buying or selling shares, bonds and stocks
- Buying a car
At the moment, you can apply for your NIF personally, by your representative or business manager. We will therefore advise you how this is working at the time that you contact us.
Creating a Power of Attorney to buy property in Portugal
As part of the legal process of buying property in Portugal, the Title Deeds will need to be signed in Portugal. This is obviously not always convenient, so a Power of Attorney can be used to allow someone else to complete the purchase for you, meaning you do not need to leave the UK.
Using a Power of Attorney to complete your purchase offers several advantages:
- Avoiding the time and expense of travelling to Portugal to sign the Title Deeds
- It normally works out cheaper than travelling to Portugal yourself to sign
- You can choose whoever you want to act as your Attorney – it is common to pick a solicitor so you can be confident all of the legal details will be handled correctly
You should only give a Power of Attorney to somebody that you trust as they allow that person to do things legally on your behalf.
An important point to understand is that Portuguese Powers of Attorney give much broader authority to the named Attorney that is the case with UK Powers of Attorney. Our team will use our expertise to limit your Power of Attorney as much as possible whilst ensuring your Attorney is able to carry out the role you require of them effectively.
We typically charge £250 plus VAT for drafting a standard Power of Attorney.
For more information, please take a look at our guide to using Powers of Attorney.
Deciding how your Portuguese property will be owned
This is probably the most important decision that you can make. Getting this right can save you thousands in costs and taxes. Getting it wrong can be an expensive mistake.
The way that you would buy a property in your home country is not necessarily the best way to buy in Portugal, so don’t assume that you can adopt what you have done here to your purchase in Portugal. Acquiring a property in a different country is always different and the rules for that acquisition may also be different.
There are many options – ranging from personal ownership to company ownership but there is no “one size fits all” solution that works for everybody.
Your circumstances and priorities are different from the next person. We are able to look at your circumstances and your priorities and advise you who should own the property based on that information. The solution may not necessarily be immediately obvious.
When deciding on the best form of ownership we would need to take into consideration both Portuguese and UK tax and also a range of other circumstances such as your plans for the property in the future.
We can also work with your own tax or wealth management advisors to ensure a joined up and tailored approach to your purchase.
Notifying the relevant people about your Portuguese property purchase
There are various organisations, companies and official bodies you will need contact when you buy a Portuguese home, including:
- Residents Association (Associação de Proprietários)
- Water and Electricity
- Land Registry (Registo Predial)
- Title Certificate (Caderneta Predial)
- Town Hall (Câmara Municipal)
To find our more, take a look at who to tell when you move into a property in Portugal.
Inheritance planning for Portuguese property
Portugal’s inheritance laws are quite different to those in the UK, so it is generally a good idea to make a Portuguese Will in addition to your UK Will. Failure to do so can significantly increase the cost of inheritance for your beneficiaries.
Many people who inherit a property abroad do not understand what the legal requirements are, whether they wish to keep the property or sell it. We can advise you on your options and make sure all of the necessary issues are taken care of, allowing you to make the most out of your inheritance.
To find our more, please see our guide to inheriting Portuguese property.
What is included in our services for buying property in Portugal
We always work on a fixed fee basis so you are able to budget effectively for your purchase from the outset. If your purchase raises substantial or unexpected problems which need to be resolved and require additional work, there may be additional charges. We would inform you before incurring this cost. However, our experience of Portuguese property enables us to anticipate most issues so that we can deal with many unexpected problems without any additional charge.
Our services include:
- Legal advice on the terms of your offer to purchase
- Searches at the Town Hall
- Searches at the Land Registry
- Obtaining certificate from the Community of Owners (if appropriate)
- Checking the legal status of the property and the seller’s right to sell
- If appropriate, checking the guarantee provided by the vendor
- Preparing a report on our searches and advising you on the purchase
- Arranging the signature of the Title Deed
- Arranging payment of the relevant taxes
- Arranging registration of the property at the Land Registry
- General hand holding and advice throughout the transaction