Mortgages for non-residents in Portugal.
The developed juridical basis and stable economy always positively influence the mortgage market. Nowadays it is quite easy for a non-resident to get a mortgage because the demands are quite formal, and the decisive factor in your relationships with a bank will be the level of your solvency.
The mortgage system is very convenient. You are offered a credit on the security of the purchased property of 50 - 60 % of the total amount, with 3-4 % annual interest rate, for the term up to 30 years. You need the following documents to get the credit :
1. ID
2. Portuguese VAT number card
3. The last income statement and / or the last financial balance of the company
4. Last three salary payment receipts
5. Bank account excerpt (last 6 months)
The documents must be translated into English or Portuguese and notarized by Portuguese Embassy Consulate department. If the bank decides to give a credit it is obligatory to open an account in this bank. You need the following documents to open an account:
1. ID
2. Portuguese VAT number card
3. The last salary payment receipt
4. Confirmation of address in your native country
5. Birth certificate
6. Minimum 250 € to deposit on your account
Some documents must be in Portuguese, which can be easily done here.
After taking a preliminary decision about giving credit, the bank evaluates the property for purchasing which it gives the credit. This procedure is paid by the client. The evaluated amount must be at least equal to the credit amount or bigger.
It takes 15-20 days to get the credit (including property evaluation by the specialist invited by the bank)
Mortgage is applied to real estate. The property serves as a security of the loan given to the buyer of property. These relationships between the bank and the property owner are registered in the State Real Estate Register.
If the bank concludes that the case satisfies both sides, the final decision about giving the credit is made, and the client receives two documents: the first one contains the conditions of the credit; the second contains the conditions of the preliminary registration (registos provisórios). These documents are emitted in the local Real Estate Register Department.
Then you have to pay the IMT tax. This "Municipal tax over property transfer" (Imposto municipal sobre as transmissões - IMT) is paid over any real estate transactions. The purchaser pays the tax. It is necessary to pay the IMT before the transaction is done. The notary register of the contract cannot be done without the document certifying that this tax is already paid (this can be done in any finance department in the tax service). The tax value depends on the type and price of the property. The tax service itself evaluates the property taking into consideration not only the construction costs, but other factors as well, for example the quality of construction and finishing materials, level of comfort, the district where it is situated.
One of the most important issues of purchase / sale contract is that it should be registered at the notary (por escritura pública). The final contract register is performed in the notary office, normally the one closest to the bank or with which the bank collaborates. For this procedure it is needed as usual to demonstrate the identification documents and the VAT number cards. Besides this all the property documents must be demonstrated, as well as the document confirming that the purchased property is residential - licença de habitação.
Two contracts are signed and authenticated in the notary:
- sale / purchase contract between the buyer and the seller that gives the buyer the right to own the property;
- the mortgage contract between the buyer and the bank, that specifies all the credit conditions (term, annual interest, etc.)
When the contract is signed the duty of 0,8% of the property price and of 0,6% of the credit amount is paid (this duty and IMT are already included in the bank conditions simulation).
The final stage of this process is a substitution of the preliminary register by the permanent one. It is made in the Real estate register department. Only after that you are finally considered to be the property owner.
Normally you are notified about all the expenses before the process begins, at the very moment of being notified about the preliminary credit acceptance decision.
Becoming a property owner you have to pay an Annual Municipal Real Estate Tax (Imposto municipal sobre os imoveis - IMI), which is paid over any real estate. The Tax service sends the corresponding notifications every year in March, and the tax should be paid in April. This tax annual value is of 0,4 to 0,8 % of the property cost registered in the House Register (normally this cost is 2 times less than the real property cost), the percentage changes depending on the region, city and zone.