H09E - Property Buying & Selling

afpop strongly recommends that you take professional advice before entering into any agreement to buy or sell property, such as Lawyers, financial advisors, bureaucratic assistants. 

Property agents, lawyers & banks 
In order to sell/buy a property, either privately or through an agent, the following documents must be provided: 

• “Certidão de Teor Predial or Certidão Permanente Predial”, which allows the buyer to know if there are any outstanding mortgages or other burdens on the property and also if the person selling is the actual owner, if the property is registered in his/her name. This document is valid for 6 months. Make sure you have a valid one for the Deeds. 

• “Caderneta Predial”, which is the document held in the Tax/Fiscal Department (Finanças) and tells you the size of the property, its location and boundaries, as well as a brief description. 

• “Licença de habitabilidade ou utilização”, which is the licence issued by the City Hall if the building was built after 7th August 1951, or a Certificate from the City Hall if it was built before that date. 

• “Certificado de Eficiência Energética”, Energy efficiency certificate, issued by a certified entity/ specialised technician which can be found HERE (by selecting the property area, district and municipalty) and valid for 10 years. 

• “Escritura pública de habilitação de herdeiros”, notarisation and registration of new owners – applicable when the property was acquired by Inheritance and it is issued by the “Notário” (Notary’s Office) 

• Building licence (when applicable) 

• Building Contract (when applicable) 

• Legal Invoices of the constructor (fatura) (when applicable) 

• Complete building project (when applicable) 

• Statement from Tax Department confirming that all the rates bills are paid. The IMI tax is the only tax that will follow the property no matter how many times it is sold, unlike other debts, like electricity, telephone, etc. that will follow the owner for payment, this tax will always go with the property and the present owners. 

• Proof of payment of IMT (Bulletin T05). This is a property transfer tax and has to be paid before the Deeds are signed. Original of the proof of payment must be presented to the Notary. 

• Proof of payment of Stamp Tax (IS). This has to be paid before the Deeds are signed. Original of the proof of payment must be presented to the Notary.

• Plans of the property, of the plot and of the Urbanisation (if applicable). These plans, first of all, allow the surveyor or buyer to identify all parts of the property as planned and registered at the City Hall. 

• Houses built or altered after 25th March 2003 shall have “Ficha técnica de habitação”. This is a document for dwellings only, that compiles all information about the property, such as builder's details, type of materials used and who provided them, etc. 

• Copies of Identification document and Tax/Fiscal number of the owners. This should be provided to the Real Estate Agent, Solicitor or Lawyer and originals must be shown to the Notary when the Deeds are signed. 

• Power of attorney (if one of the parties is using a legal representative). This should be provided to the Real Estate Agent, Solicitor or Lawyer and the original must be presented to the Notary when the Deeds are signed. 

• Copies of Identification document and Tax/Fiscal number of the legal representatives (if applicable). Same as the last two above 

If the seller or purchaser is a company, you will also need to provide: 

• “Certidão Comercial”. A document issued by “Conservatória do Registo Comercial” (the business registration office) which identifies the partners as well as what powers they have in the company. 

• Identification Documents and Tax/Fiscal Numbers of the company. This should be provided to the Real Estate Agent, Solicitor or Lawyer and originals must be shown to the Notary when the Deeds are signed. 

• Power of attorney from the other shareholders to the one signing the Deeds (if applicable). This should be provided to the Real Estate Agent, Solicitor or Lawyer and original must be presented to the Notary when the Deeds are signed. 

Once all these documents are available (in the case of a Real Estate Agent they should already be there) both buyer and seller may sign a promissory contract, in which the buyer will pay a deposit and promises to buy and the seller receives the deposit and promises to sell. 

Promissory contract 
This contract shall contain everything agreed between buyer and seller such as the price, conditions of payment, dates of payments and the deadline date for the deed or even any outstanding procedures. All items agreed should be specified clearly in this contract to avoid problems in the future. This contract should be drawn by a Lawyer or at least approved by one. This contract should be done in Portuguese and the signatures of both parties should be certified. 

A basic promissory contract will include: 

• The identification of the buyers and sellers and their representatives in case they have one

• The identification of the property, its registration number, a complete description, and the number of its habitation licence or construction licence

• The price agreed for the sale, including the form of payment

• The deposit (sinal), whether further amounts will be paid before the final contract is signed, and confirmation of payment of the first deposit

• The deadline (prazo) for signature of the final contract 

• Usage of the property by the buyer and seller before the final contract is signed

• Whether interest is payable on any delays to the completion of the sale

• Whether the buyer may build on the property before completion of the sale

• Who will pay the property rates (IMI) tax

• The conditions for default on the contract

• Any other conditions that the seller or buyer must meet before completion of the sale

Deposit and refund 
Usually the deposit will be 10 - 20% of the sales price but can be more by agreement of both parties. Normally, should the buyer default on the contract the deposit remains with the seller; if it is the seller who defaults they are required to refund twice the amount of the deposit. Alternatively, when article 830 of the civil code is mentioned in the promissory contract, the property transfer may be executed by the Court when one of the parties fails to complete. 

Final contract - Deed 
The final contract should be prepared by the Notary or a Lawyer. A few days before the date of signature the property sales tax (IMT – Imposto Municipal sobre as Transmissões Onerosas de Imóveis) and the Stamp Tax (IS - Imposto de selo) should be paid. The contract will signed by both parties in front of the Notary. If either the buyer or the seller does not understand Portuguese a translator should be present or their lawyer should be provided with a power of attorney to sign the escritura on their behalf.

After completion date you should make sure that the sale is registered in the Land Registry Office (Conservatória do Registo Predial). 

As an advice, make sure that after the Deeds the buyer receives all important documents from the Notary or their own representative, such as a copy from the Deeds “Escritura”, “Caderneta Predial”, Registration Document, “Licença de Habitação/Ocupação”, keys and information about the Condominium Management (if applicable). 

In the case of ready-made contracts (generally provided by Real Estate agents), whether it is for a preliminary contract or the final deeds, we recommend that you look for a lawyer you trust to clarify your doubts. If you want to close a deal, seek the professional help of a lawyer to draw up the contract in a way that gives you guarantee and legal certainty.

If you do wish to buy a land or an old house, Bulletin H/07 gives more information about planning procedures, which you should consider beforehand.