We made a overview for you of the expenses involved when buying a property in in Portugal. Please keep in mind that laws and rates are subject to change over time. Always ask for a detailed quotation of all costs involved before starting the buying process to know exactly what to expect.
There are two types of taxes that you pay with the purchase:
Transmission Tax (IMT) and Stamp Duty Tax (IS).
IMT: Houses are taxed at 1% of the purchase value until € 93,331 any value above that is charged with a scaling system between 2%-7,5%. If you buy a house for your permanent living in Portugal, you are exempt of this tax.
Rural land is charged with 5% of the purchase value.
Urban registered buildings that are used for storage are charged with 6,5% of the purchase value. If you buy a mixed property (both with a registered house and land) the notary will assign a value to the house and the land and charge the accompanying taxes.
IS: This tax is 0,8% of the purchase value.
Your property need to be registered on your name after the deed. Costs of this registration depends on the number of articles the property exists of. For properties with 1 article sold with a value under € 10,000, the registration costs € 100. For all other properties, the first article registration is € 250 and all the other articles are € 50 each.
The solicitor / notary assembles all paper work and makes the promissory contract (if needed) and final purchase contract. He executes the official process of signing the deed with the seller and buyer. The costs per deed are between € 300 and € 500,- In all cases it is advised to ask a lawyer to help you with your property purchase. Ask him to find out if there is a mortgage on the property, if there are any issues with registration/owners, unpaid property taxes, illegal buildings, etc. Make sure the lawyer speaks and writes in good English so he can translate the contracts and all other important documents for you.