There are a number of costs involved in buying property in Portugal, including the property taxes and legal fees. The following is a breakdown of these costs, so you can have a better idea of what to expect when purchasing a Portuguese property.
Portuguese property taxes
There are various tax considerations when buying property in Portugal, including specific taxes you will need to pay when you buy, own or sell a Portuguese property.
Stamp Duty (Imposto do Selo)
When buying a property in Portugal, you will generally pay 0.8% of the purchase price for the Portuguese equivalent of Stamp Duty.
Transfer TAX (IMT—Imposto Municipal sobre a Transmissão Onerosa de Imóveis)
This is payable if the property is a resale (second transfer). This is paid by the buyer to the Portuguese Tax Authority within 30 days of the date of signing the title deed and is needed in order to register the property
This is payable by the purchaser where the vendor is considered a developer who pays IVA and / or this is the first time that the property has been sold / transferred.
The VAT rate is a flat rate of 23%.
Capital Gains Tax (Mais-Valias)
This tax is based on the increase in the value of the land since the last transfer. Technically the vendor pays this although often it is agreed that the buyer will pay this. For Portuguese property, this is not normally a huge amount.
IMI (Imposto Municipal sobre Imóveis)
This tax is annually due by the owner of the Portuguese property and is paid between the months of April and November, depending on the total amount of the tax. It is paid to the Portuguese Tax Authority.
IMI is charged at a rate of 0.3%.
Legal costs for buying property in Portugal
There are two parts to the legal costs involved in buying Portuguese property:
- Solicitors’ fees
- Third-party fees
Our solicitors’ fees for buying Portuguese property
For straightforward property purchases, we charge 1.5% of the purchase price, with a minimum fee of £2,250 plus VAT.
There may be additional charges if the property title is found to be defective or any other unexpected additional work is required, however, we will always inform you before carrying out any work that involves any such additional cost.
Third-party fees for buying property in Portugal
This includes costs payable to professionals and public bodies, such as Notary fees, Land Registry fees and the like, which cannot be avoided. These costs are determined based on the value and nature of the transaction, so we will be able to give you a clear picture of these costs once we have a full understanding of the purchase you are undertaking.
These third-party costs are set by the relevant professionals/public bodies, so will be the same no matter which firm of property lawyers you use.
Need help buying property in Portugal?
Our UK-based team of property lawyers are highly experienced in helping clients to buy and sell property in Portugal, as well as handling a whole range of related issues, such as advice on Wills and inheritance.
With a thorough understanding of both UK and Portuguese law, we can provide clear, reliable legal guidance in plain English, giving you the confidence to deal effectively with property in Portugal.