Property Buying Costs In Portugal - Lagos

Property Specialists Algarve,buying costs,buying a property in algarve,taxes

All you need to know about costs when buying property in Portugal.

Portugal property buying costs percentageWhen buying a property in Lagos, the Algarve or anywhere else in Portugal for that matter it is important to take into account another 6-10% over the property price for additional buying costs. These are unavoidable costs such as taxes that make up part of the property buying process and costs. To understand what this percentage is made out of, please find below an overview of additional costs for buying a property in Portugal. The same principles apply for all types of property from small apartment to luxury villa, but the taxes on these buying costs vary with the price.

What are the Agency Fees for buying a property in the Algarve, Portugal?

The Agency Fees in Portugal are for the seller, not for the buyer.

 

What are the legal or lawyers fees for buying a property in the Algarve?

What are the legal or lawyers fees for buying a property in the Algarve?

A lawyer will check all the documentation and legal side of the property you want to buy. For example, a lawyer checks if there is no debt on a property, if no roads are planned to being built nearby, and if the property is legal. Using a lawyer, you know exactly what you are buying, without falling into any traps. Lawyer fees are an approximate additional cost of 1.25% + VAT. 

Notary Fees when buying a property

Notary Fees when buying a property

Every buyer needs a notary to legally sign the final deed of the purchase of the house. For a notary to set up the final contract and final deed service is a variable additional cost, but is typically around 800-1000 euro.

Stamp Duty as a Property Buying Cost

Stamp Duty as a Property Buying Cost Portugal

Stamp Duty is a tax paid on any property transfer, regardless if it's a beach apartment, a luxury villa, a farmhouse, etc. Stamp Duty is paid by the buyer of the property. Stamp duty in Portugal is a flat rate of 0.8%.

 

What is Property Transfer Tax (IMT)?

The property Transfer Tax is a cost, to be paid at the transfer of the property into your name. This is a cost for the buyer of the property. The percentage applied is property value dependent, and is shown in the table below. Two different percentage apply, there is a percentage of the property purchase of a 1) Primary residence, and 2) Secondary property, holiday property, or rental property.

 

1. IMT Property Purchase -  Primary Residence 

Value of property% appliedDeducted value
< € 92,407 0 % € 0
€ 92,407 to € 126,403 2 % € 11,848.14
€ 126,403 to € 172,348 5 % € 5,640.23
€ 172,348 to 287,213 7 % € 9,087.19
€ 287,213 to 574,323 8 % € 11,959.32
> € 574,323 6 % € 0


2. IMT Property Purchase -  Secondary, Holiday, Rental Residence

Value of property% appliedDeducted value
< € 92,407 1 % € 0
€ 92,407 to € 126,403 2 % € 924,07
€ 126,403 to € 172,348 5 % € 4,716.16
€ 172,348 to 287,213 7 % € 8,163.12
€ 287,213 to 574,323 8 % € 11,035.25
> € 574,323 6 % € 0

 

The total additional costs of buying a property in Portugal is a maximum of 10%

Stamp duty and transfers tax and laywer fees and notary fees are the total buying costs

 

Example calculation

Mr Smith buys a holiday home of 300,000 euro, that is valued at the council tax at 300,000 euro as well. His total costs for buying the property are therefore:

CostCalculatedAmount
Property price x  € 300,000
Stamp Duty 0.8 * € 300,000 € 2,400
Lawyer Fees* 1.25 * € 300,000 + VAT (23%) € 4,612.5
Notary Fees* Variable, around: € 800
IMT € 300,000 * 8% - 11,035.25 € 12,964.75
-------------------- -------------------- --------------------
Total Costs Property price + 6.9 % € 320,777.25
Added up, Mr Smith pays an approximate additional 6.9% buying costs, adding up to a total of € 320,777.25 necessary for the purchase of the property priced at € 300,000.*
*Please note that these prices are an example, and may vary depending on other factors. 

More information

To find out more about the buying process, please click here. 
For more 'personalised' information about taxes, the buying costs and/or the buying process in Portugal, please contact us on:

Email:  info@propertyspecialistsalgarve.com

Phone: (+351) 912 488 155 

Or leave us a message here.

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Telephone +351 912 488 155

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info@propertyspecialistsalgarve.com
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