The Legal Procedure

Fiscal number
Your Lawyer will apply for a fiscal number (numero de contribuinte) at the local Tax office (Finanças), this document is mandatory and you must have one to purchase a property. The fiscal number will come in the form of a card, which you will need for payment of annual property taxes, supply of services to the property or to open a Portuguese Bank Account.

The promissory contract of purchase and sale
This is a preliminary contract drawn up to cover the purchase of any property. It is known as “promissory” because both parties effectively promise to enter into a final contract to buy and sell the property signed and drawn up before the Notary. This is the vital binding document signed by both parties. It identifies the parties, regulates the terms and conditions agreed, the price, the completion date and all the other relevant conditions. The promissory contract of purchase and sale related to an urban property (a house or an apartment) is only valid if signed by both parties in front of a Notary who certifies that a valid licence of habitation or building licence has been issued and is still in force.

a) Deposit
A deposit is required upon signature of the promissory contract. There is no limit for this but experience shows that usually buyers are not prepared to put up front a substantial deposit. It may vary but be prepared to pay a minimum of 10%. It is advisable that this amount should never exceed 50%.

b) Breach of contract
If all the formalities mentioned above are fulfilled and the seller then decides he no longer wishes to sell the property, the buyer has two options:

• demand compensation equal to twice the amount of the deposit paid;
• force the seller to sell seeking for an order of “specific performance” of the contract. This is obtained by taking out legal proceedings against the seller in the Court and involves quite a considerable amount of time, patience and money.

If the buyer decides not to wish to proceed with the purchase, then the deposit is lost to the seller, who can also try and force the buyer to buy using the above mentioned system of “specific performance”.

c) Completion (Escritura )

Escritura means “deed” and is, in fact, the conveyance of a property. This document is prepared and signed before a Notary by you or your lawyer using a power of attorney, and the vendor. At this occasion the balance of the price is paid. An appointment with the Notary has to be organised for signing the “escritura”. This is subsequently drawn up in the notary book and he/she will then proceed to read this to you through an official translator, after the reading you are required to sign this same document, and the vendor has to state whether or not he/she has received the price in full. For the preparation of the “escritura” the Notary will require evidence that everything is legally correct and in perfect order.

The main documents required for this purpose are:
Certidão de teor da descrição predial (Certificate of land registration) – which proves the description and inscription numbers of the property at the local land registry office;
b) Certificate of Habitation;
c) Caderneta Predial – booklet issued by the Tax Department confirming that the property has been registered for tax purposes;
d) A receipt from the Tax Department showing that the IMT(Transfer Tax) has been paid.

d) Registration
The whole transaction is completed when the application has been filled out for the registration of the property in your name. This is done at the Land Registry Office. For this purpose a notarized copy of the Escritura will be required.