Finding an agency to sell your property in Portugal
The most important part of selling your property in Portugal, is finding the right agency. Different to some countries, in Portugal you are allowed to put your house up for sale through as many agencies as you want at the same time. You can also choose to sell your house through one agency exclusively (for a period of time) which will give you a discount on the agency fees.
The due diligence report
When the agency has found the right buyer for your property and a price has been agreed, you will take on a lawyer/solicitor. They will help you translate the contracts and documentation, and will translate for you at the notary at final deed. When documents from the list below are missing, your lawyer will help you obtain them. Taking on a lawyer is not a legal obligation but we definitely recommend it, they will save you time and money.
After a price has been agreed between you and the buyer, the buyer's lawyer will carry out a due diligence report on his behalf and draw up the promissory contract. This usually takes between 2-10 days but can be different depending on the situation.
Which documents do you need to sell your property?
What is a Promissory Contract in Portugal?
After the due diligence period, the first legal binding contract is signed. This contract is signed by you and the buyer, and is the first legal binding contract. On promissory contract, you will receive the deposit, which is usually between 10-30%.
As this contract is legally binding, the deposit is non-refundable. If either party changes their mind, they lose the deposit to the other (for you this means that if you change your mind, you will pay back double the deposit to the buyer. If the buyer changes their mind, you keep the deposit). This is Portuguese law, and hence will be the same with whichever agency has brokered the sale.
The Escritura/Final deeds in Portugal
About 30 to 60 days after the promissory contract, depending on the situation, the final deed – The escritura – is signed and the remaining balance is paid. This process involves the seller, the buyer, the seller's lawyer, the buyer's lawyer, the buyer's bank representative in case of a mortgage, and the notary. Your lawyer will be there mainly to check the contract on your behalf, and to translate into your preferred language. Both the promissory contract and Escritura are in Portuguese.
The deed is paid by cheque at the notary's office.
The notary guides the process for both parties at the final deed, after which you have officially sold your property!
Selling costs for property in Portugal
Both the buyer and the seller of a property in Portugal have costs to cover the process of the transaction. The costs for the buyer are explained in Buying Costs. The seller of the property is looking towards the following costs to sell a house in Portugal:
Capital Gains Tax for selling property in Portugal
In general, when you sell a property with a profit, you pay capital gains tax. This is a flat rate of 28% over the profit for non Portuguese residents. Portuguese residents are taxed as the rest of their income.
- Any property purchased in your name before january 1989 has 0% Capital Gain Tax.
Portuguese residents pay Capital Gains Tax over only 50% of the made profit.
When you sell your primary residence, and you reinvest the capital in a new primary residence in Portugal or the EU within 36 months after the sale or 24 months before, you pay 0% Capital Gains Tax. You will have to live in the new property at least 6 months a year to call it your primary residence.
The Capital Gain Tax on corporate acquired property in both white and black listed jurisdictions is 28%.
To Calculate the taxable amount:
Selling Price – (Acquisition costs + ownership transfer costs + improvement costs in the last 5 years of ownership)
Agency Fees for selling your property in Portugal
In Portugal, agency fees for the property transfer are paid by the seller. The agency fees are part of the Ownership Transfer Costs (mentioned above) and can be deducted from the taxable Capital Gains amount. For advice on selling your property, please contact us at firstname.lastname@example.org, at (+351) 912 488 155, or leave us a message here.