Buying Process

The process of buy a property in Portugal can be completed effortlessly and in absolute security, as the law covering property transactions is very specific and complete.

 

The first step to purchases one property in Portugal consists of written promissory contract containing the terms of the sale and a subsequent notarized sales contact.

When the promissory contract is entered into, the buyer pays a nonrefundable deposit of usually 10% of the purchase price. 

Subsequently, the remainder of the purchase price becomes payable when the notarized sales contract (Title Transfer ), is entered into.

 

When the conditions set out in the Promise of Sale and Purchase Contract have been met, the document of transfer of the title deeds, the Title Transfer, is drawn up at a Public Notary Office, where it is signed by the parties.
This Title Transfer is effectively the final Sale and Purchase Contract and is also often referred to as the 'promised contract' in the Promise of Sale and Purchase Contract.

 

In the event of a dispute, defined in accordance with the provisions of law No. 144/2015, of September 08, the second contractor can resort to alternative dispute resolution entity of competent consumption.

For processes of litigation in the autonomous region of Madeira, the second Contractor can appeal to the Arbitration Centre for consumer conflicts of the autonomous region of Madeira, with headquarters in the Rua Direita, 27 1st floor, Funchal, 9050-405 with the email address:

This email address is being protected from spambots. You need JavaScript enabled to view it. avaiable at www.srrh.gov-madeira.pt/In%C3%Adcio/tabid/292/Default.aspx.

 

  • Fiscal Representation

    The Portuguese Government established a scheme for tax residents. The tax level, residents with this Statute which obtain income from work as a result of activities considered to be of "high added value (appearing on a list published by the Portuguese Government), are subject to a special rate of 20%.

    This scheme provides a tax exemption for foreign-source income, including income from investments in buildings, capital gains, interest, dividends and other investment income, since verified certain conditions, as well as pensioners.

    The scheme is applicable for a consecutive period of 10 years.

    IMT 2013 - MADEIRA

    Property Tranfer Tax Rate For Madeira

    Value of Residential PropertyTaxAmount Deductible
    Up to 115,509.00 Euros 0 % 0.00 Euros
    From 115,509.01 Euros até 158,004.00 Euros 2 % 2,310.18 Euros
    From 158,004.01Euros até 215,435.00 Euros 5 % 7,050.29 Euros
    From 215,435.01 Euros até 359,016.00 Euros 7 % 11,358.99 Euros
    From 359,016.01 Euros até 717,904.00 Euros 8 % 14,949.15 Euros
    Over & Above 717,904.01 Euros 6 % Only 0.00 Euros

    For example: For a property price of 150,000.00 Euros:

    • 150,000.00 Euros x 2 % = 3,000.00 Euros
    • 3,000.00 Euros - 2,310.18 Euros = 689.82 Euros payable IMT Tax


    IMT TAX rates for 2013 in Madeira for Non-Permanent Residents
    (Residence in Madeira Island for less than 6 months)

    Value of Residential PropertyTaxAmount Deductible
    Up to 115,509.00  Euros 1 % 0.00 Euros
    From 115,509.01 Euros até 158,004.00 Euros 2 % 1,155.09 Euros
    From 158,004.01Euros até 215,435.00 Euros 5 % 5,895.20 Euros
    From 215,435.01 Euros até 359,016.00 Euros 7 % 10,203.90 Euros
    From 359,016.01 Euros até 688,544.00 Euros 8 % 13,794.06 Euros
    Over & above 688,544.01 Euros 6 % Only 0.00 Euros

    For example: For a property price of 150,000.00 Euros:

    • 150,000.00 Euros x 2 % = 3,000.00 Euros
    • 3,000.00 Euros - 1,155.09 Euros = 1,845.00 Euros payable IMT Tax

    Exceptions:

    • Other urban property, such as building plots or land to build an urban dwelling: 6.5%.
    • Rustic Property (agricultural land): 5.0 %.
    • When a company listed in one of the black-listed jurisdictions acquires a property in Portugal: punitive tax rate of 8%. (Note that if a company listed in a white-listed jurisdiction acquires a property, the same rates apply as shown in the table above.

    IMI Madeira 2013 - Municipal Property tax For Madeira Island

    The IMI is an annual tax on a property, owed by whoever owns the property on 31 December of each year. For this purpose, the owner is considered to be the person/persons/entity recorded as such in the Property Matrix, or whoever is in legal possession of the property at that time.

    The IMI rates, applied to the Taxable Asset Value of the property, are as follows:

    • 0.8% for rural properties.
    • 0.2 to 0.5% for urban properties (Villas, apartments, offices and commercial spaces) when the taxable asset value has been updated according to the new rules.
    • 0.4 to 0.8% for urban properties which have not yet been re-evaluated in accordance with the new rules.
    • 1% for any property owned by residents of the territories listed as "Tax Havens" or Reduced Tax Domiciles by the Ministry of Finance. This rate increases 2% if the property is left empty for periods longer than a year.

    Where a spread exists, the actual rate is determined annually by Municipality of the area in which the property is situated, and may exceed the limits under special circumstances.

    The IMI calculation is based on the values recorded in the Property Matrix on 31 December of each year, and is due at the end of April of the following year. If the amount exceeds 250 Euros it may be paid in two instalments, the first being due at the end of April, and the second at the end of September, of the year following that for which the tax applies.

  • Real Estate Valuation Madeira Island

    The Luxury Concepts provides, through a technician trained in the area of real estate appraisal visa, reporting services evaluation and real estate studies that serve as support for the proper decision-making and investment projects, consistent with the market value of the property.

    The assessment of a property can be done using three different methods:

    • Market comparison method: Based on comparison of the values of similar and comparable real estate transaction, obtained through the knowledge of the local market or prospecting.
    • Yield method: Determines the value of the property from the future income he manages or can come to generate, and a capitalization rate reflecting the expected profitability of the capital invested.
    • Cost method: The estimate of the value corresponding to the cost of construction of a building that meets the same characteristics of the property evaluation object.

    The customer is usually presented an assessment report that meets the standards set and regulated by the Securities Market Commission

    To get budget for a real estate appraisal of your property will send us an email to:

    This email address is being protected from spambots. You need JavaScript enabled to view it.

     

  • Fractional Real Estate For Sale

    Fractional ownership is a current model which allows a property to be acquired by several owners at reduced prices. The various owners of the property, usually the market looking for a second home, can thus enjoy and benefit from the use of property annually and for a stipulated period of time between the parties investors.

    The various owners of the property, usually the market looking for a second home, can thus enjoy and benefit from the use of property annually and for a stipulated period of time between the parties investors.
    A fractional investment models, the number of investors can vary depending on the type of property, but the concept is to have a number of days where the owner is entitled to exclusive use per year. Regardless of the type of model and number chosen, the fractioning allows several solutions, including:

    • Exclusive use of the owners
    • 50% use of owners and 50% tourism rentals

    Usually in a fractional operation is named a management entity to take charge of to administer the rules and regulations agreed between the owners. Every owner is guaranteed a prescribed quantity of access to active, the remaining part is commonly used or offered to the public in a car, being split income usually between the management company and the owner.

    In addition, each homeowner pays a part of the annual management and maintenance committees, in relation to their% ownership. Another of the advantages of this model is the possibility to share the maintenance costs of an asset that will not be used full-time by the owners.