Information

Buying a property in Portugal

Buying a property in Portugal

 

The acquisition of property in Portugal, because it is subject to the payment of taxes, requires that you register with the Tax Authorities to obtain the corresponding taxpayer identification number;

Residents abroad, as well as those who, although resident in Portuguese territory, leave for more than six months, should appoint a representative residing in Portuguese territory for tax purposes.

If you are a resident or if you are leaving for a member state of the European Union or the European Economic Area, the designation of this representative is merely optional.

The place of residence for tax purposes is the place of habitual residence or, in the case of citizens resident abroad, the place of residence for tax purposes corresponds to that of the tax representative.

 In order to finalise the purchase of your house you must submit various documents that identify the property and that confirm the legitimacy of the owner and the buyer:

 

1. Land Registry Certificate (Certidao do Registo Predial)

The information made available by the land registry tells you about the composition of a certain building, the legitimacy of the person intending to sell the property and the types of encumbrance that may affect it (mortgages, collateral, etc).

The land registry certificate may be requested in the following ways, in hard copy or in digital format:
  • In person, at any land registry office (Conservatória do Registo Predial) (see list). This entity holds full descriptions of properties;

  • It is possible to request a permanent land record certificate and simplified land information through the Predial Online website.

 

2. Title Certificate (Caderneta Predial)


This document may be requested from any tax office. It contains information about the property's tax situation and can be used to find out which entity is responsible for meeting fiscal obligations related to the property.
  • Property owners can get the title certificates for their properties from the tax authority website;

  • A title search of an article in the land registry may be requested instead of a title certificate (this is only valid for one year);

3. Usage Licence (Licença de Utilização)

The purpose of the Usage Licence is to certify the intended use of the property, and that it is suitable for its licensed purpose. This licence must be requested from the City Council of the district where the property is located. However, proof of the licence request may be submitted along with the purchase agreement if the licence is yet to be issued.


4. Housing Technical Datasheet (Ficha Tecnica de Habitação)

The Housing Technical Datasheet is a document that describes the main technical and functional characteristics of a property. It must be requested directly from the City Council of the district where the property is located.

 

Tax regime for non-habitual residents in Portugal


Competitive advantages:

  • For a period of 10 years, taxation related to IRS (personal income tax) on labour income in Portugal is at a fixed rate of 20%
  • No double taxation for pensions or for employment and self-employment income obtained abroad.
 
How can you acquire Non-Habitual Resident Status?
  1. Having not been a resident in Portugal for the last 5 years;

  2. Register at the local tax office as a tax resident in Portugal (to do so you must have remained in Portugal for more than 183 consecutive or non-consecutive days, or having remained for less time, having, at 31st December of that year, a home in such conditions that would lead to the assumption that it is intended to be kept and occupied as your habitual residence);

  3. Request that the status of Non-Habitual Resident be attributed at the time of registering as a tax resident in Portugal, or by 31st March of the year following that in which you become a resident in Portugal.
 
Once Non-Habitual Resident Status has been obtained, what is the taxation rate and incidence applicable to domestic source income?

In the case of employment or self-employment, the applicable taxation rate is 20% (with an additional 3.5% surcharge in 2015).

Taxation applies to income derived from high added value activities of a scientific, artistic or technical nature:
  • Architects, engineers and similar
  • Fine artists, actors and musicians
  • Auditors 
  • Doctors and dentists, teachers and psychologists
  • Liberal professions, technicians and similar
  • Senior managers
  • Investors, directors and managers, when part of companies covered by the contractual regime provided for in the Investment Tax Code.
Registration as a Non-Habitual Resident confers the right to be taxed as such for a period of 10 years as from the year of registering as a tax resident in Portuguese territory.
 
Once Non-Habitual Resident Status has been obtained, in which cases is foreign income obtained by Non-Habitual Residents in Portugal exempt from taxation?
 
In the case of pensioners and retired people when:
  • Income is taxed in the source State, in accordance with the convention to eliminate double taxation, signed by Portugal and that State; or
  • Income is not considered to have been obtained through a Portuguese source, according to the criteria provided for in the IRS Code (personal income tax).
In the case of income derived from employment, when:
  • Income is taxed in the State of origin, in accordance with the convention to eliminate double taxation, signed by Portugal and that State; or
  • That income is taxed in another State with which Portugal has not signed any convention to eliminate double taxation, as long as the income is not considered to have been obtained in Portuguese territory, in accordance with the criteria in article 18 of the IRS Code (personal income tax);
In the case of income from self-employment (through the provision of services of a high added value, of a scientific, artistic or technical nature, or through intellectual or industrial property, investment income, rental income, capital gains income or other increases in equity), when:
  • The income may be taxed in the source country, territory or region, in accordance with the convention to eliminate double taxation, or;
  • When no convention to eliminate double taxation has been signed, the OECD model convention may be applied (taking into consideration the observations and reservations made by Portugal) and as long as the source country, territory or region does not have a privileged tax regime, and as long as the income is not considered to have been obtained in Portuguese territory, in accordance with the criteria in article 18 of the IRS (personal income tax).

Golden Residence Permit Programm

New legal provisions open up the possibility of applying for a residence permit for pursuing investment activities to those who have entered the country regularly (v.g. holders of valid Schengen Visas, or beneficiaries of Visa exemption), by transferring capital, creating jobs or acquiring real estate.

The holders of Golden Residence Permits for Investment Activity have the right to family regrouping, and may gain access to a permanent residence permit, as well as to Portuguese citizenship in accordance to the current legal provisions.

Who can request a residence permit for investment activities?
Third country nationals who either carry out investment activities personally or through a company that lead to, as a rule, at least one of the following situations in Portuguese territory for a minimum period of five years:
  • The acquisition of real estate with a value of 500 thousand Euros or more
  • Transfer of capital worth 1 million Euros or more (including investments in company stocks or shares)
  • The creation of at least 10 jobs

How should a request to acquire real estate be filled in?
  • By demonstrating full ownership of real estate through the presentation of property transfer deed or a property purchase undertaking. These documents should include a declaration from a financial institution, authorised to carry out activities in Portuguese territory, stating that a transfer of 500 thousand Euros or more has effectively been made for its acquisition, or as a signal of a purchase undertaking. and 
  • by submitting an up-to-date certificate from the property register, which, in the case of a promissory contract, provided that it is legally viable, should always include the respective entry.
Property may:
  • be acquired under a co-ownership scheme, provided that each co-owner invests 500 thousand Euros or more, or through a promissory sale-purchase agreement indicating an amount of 500 thousand Euros or more; the respective transfer deed should be submitted before requesting the renewal of the residency permit for investors;
  • be encumbered starting from a threshold in excess of 500 thousand Euros;
  • be leased and exploited for commercial, agricultural or tourism purposes.

How can I request a residence permit for investment activities?
 
You can make a request online at www.sef.pt. Requests can also be made at Portuguese diplomatic posts and consulates overseas, or at the central or regional offices of the foreigners and borders service.
 
Family Reunification
The holders of Golden Residence Permits for Investment Activity have the right to family regrouping, and may gain access to a permanent residence permit, as well as to Portuguese citizenship in accordance to the current legal provisions.
 
Minimum permanent residency periods
For the purposes of renewing a residency permit, you may have to show that you have resided in Portuguese territory for a minimum period of 7 days, either consecutively or non-consecutively, during the first year, and 14 days in subsequent two year periods.
 
THIS INFORMATION IS NOT INTENDED TO BE A SUBSTITUTE FOR CONSULTING THE APPLICABLE LEGISLATION