According to the Portuguese law, any individual or legal person has the right to purchase residential or commercial property. This applies to foreigners as well. 

Normally the real estate agencies work as mediators during the process of buying or selling property in Portugal. Working with an agency is more advantageous than working with an individual seller, because an agency provides a lawyer who leads and controls the negotiation and has a big experience in such a work, in fact being specialized in this juridical area.  After the contract is signed the agency registers the new owner in the respective authorities without charging extra. On request the agency also provides the professional services accompanying the ownership: housekeeping, renting, remodelling and construction. And, last but not least, you can always contact your agency after buying if you need help of people who know local peculiarities, customs and traditions.      

The process of buying starts with visiting the real estate objects with the aim of choosing the house that corresponds to the buyer's requests of condition, price and location.

After the house is chosen and the decision to buy it is taken, preliminary Agreement of Purchase and Sale (CONTRATO DE PROMESSA DE COMPRA E VENDA) is made. This agreement is a commitment to sign the main Purchase and Sale Contract - the Title Deed (ESCRITURA PUBLICA) afterwards and specifies its main conditions: property description, price, payment terms and conditions, the initial deposit. Different terms of payment exist, for example, it is possible to take a mortgage which normally is 50 - 60% of the total amount for non-residents.  All this is stipulated in the Contract before it is signed. The first deposit is normally 10 - 30 % of the property value, but it can be changed if both sides agree. The first deposit is paid to the seller.  Thus the real estate object is finally booked by the buyer. If the preliminary Agreement does not contain special items about the deposit return in case of negotiation being cancelled, then:

• if the Contract is not observed through the future buyer's fault, the seller has the right to keep the deposit;
• if the Contract is not observed through the seller's fault, he is obliged to pay the buyer the double amount of the deposit.

Then the buyer has to get the Portuguese VAT number (NUMERO DE CONTRIBUINTE) in the financial department of the tax service (SERVICO DE FINANCAS) corresponding to the location of the property. The point of getting the number is to register the buyer as a tax payer in the Portuguese tax institutions for that he can pay the taxes related to the real estate purchase.

After that it is necessary to open a buyer's bank account in one of the Portuguese banks, which later on will be used to make all the payments related to the real estate purchase, and after that to pay household costs, taxes, insurances, etc.   
Not later than 3 days before closing the deal, the signing of the Title Deed, the buyer should pay Municipal Property Transfer Tax. (IMPOSTO MUNICIPAL SOBRE TRANSMISSOES DE IMOVEIS -IMT).

The next stage is signing of the main document - the Title Deed (ESCRITURA PUBLICA). On this stage the payment of the rest of the house's value is made and the Title Deed is signed by the seller and the buyer in the notary's office. For this procedure it is necessary to present the documents identifying the seller and the buyer, their tax cards and all the property papers:

• Property Register Certificate (CERTIDAO DE TEOR), confirming the lawfulness of existence and location of the property and containing information about all the activity that once happened in relation of the purchased property by the register entries.
• House-register (CADERNETA URBANA/RUSTICA PREDIAL) - a document, emitted by the financial institutions which confirms the property register for the tax purposes and contains the property tax number. The document also contains the region, the area and the lot type, its history and the amount of the annual taxes.
• Usage License (LICENCA DE UTILIZACAO) - is emitted by the local City Hall (CAMARA MUNICIPAL) and testifies the property correspondence to its purpose. Dwelling property should have a residence license; non-residential property should have a commercial or industrial license.
• The Tax department paper confirming that all the municipal taxes for the last 5 years were paid.
• The receipt confirming the Property Transfer Tax payment (IMT).

Normally the real estate agency prepares all these documents.

The final step is the registration of the new ownership. For this the notarized copy of the Title Deed is taken to the Land Registry (CONSERVATORIA DO REGISTO PREDIAL).

Purchase accompanying expenses

Additional expenses possible when buying property in Portugal are smaller than, for example, in Spain. You pay the Property Transfer Tax, Notary Duty (0,8% of the total amount) and Stamp Duty (€ 360). The Property Transfer Tax value is 0-8%, depending on the property value, and considering the tax deduction it is even less: 0-6%.

Property types

Apartment (Apartamento)

Firstly, it is important to mention that apartments in Portugal are classified not only by the quantity of divisions, but by the bedrooms quantity, for example:

• Т0 - is an apartment with one division, kitchen and bathroom.
• Т1 - is an apartment with one bedroom and a living-room.
• Т2 - means 2 bedrooms and a living-room, etc.
• Duplex - 2 level apartment.

Apartments in new buildings are sold with complete finishing, as well as often with all the home appliances. When buying an apartment still in project, sometimes one is offered to choose different finishing materials according to his / her taste. 

Houses (Moradia)

• Moradia Geminada - a house that shares one wall with a neighbouring house. Can have a plot of land, a swimming-pool, a garage.
• Moradia em Banda - a house sharing two walls with neighbouring houses. Can have a plot of land, a swimming-pool, a garage.
• Moradia Isolada - Detached House - a house not sharing any walls. Can have a plot of land, a swimming-pool, a garage.

Condominium

 - a complex of properties (a plot of land and properties located on it) which includes:

• private properties;
• common properties of shareholders.

Villa

- a separate private house with a garden, a swimming-pool and a garage situated in a privileged city or town area or in a resort zone.

Plots of land (Terreno)

• Terreno rural - agricultural land.
• Terreno urbano - urban lands with construction permit.
• Lote moradia - plot of land for building a private house.
• Lote predio - plot of land for building an apartment block.
• Quinta - a plot of land bigger than 10 000 m2 with a house.
• Quintinha - a plot of land smaller than 10 000 m2 with a house.

Commercial real estate

Property that is solely used for business purposes such as hotels, restaurants, bars, shops, cafes, discos, etc.