Sunday, January 13, 2008

Financial & buying process information

Here are some tips and information about the process for a buying a property in Portugal

Use a Portuguese licensed estate agent like Pedras D'Agua

We will arange your fiscal number free of charge for resident owners, non resident owners need fiscal representation, however, allways ask for a quote as some companies charge a high fee.

Find a regulated qualified solicitor or use our selected solicitor and we will pay the his fee.

Make a reservation offer to take the property off the market. This is normally refundable, held by your solicitor and made on the basis that a 'Promissory Contract' will be drawn up in the next 30 days.

As we check all the house documents in advance of showing to clients we simply give copies to your solicitor for him to check everything is in order.

If you are applying for a Portuguese mortgage it is advisable that you get an offer from the bank before the Promissory Contract is made.

The Promissory Contract is drawn up by your solicitor and signed by the seller and the buyer. The conditions are negotiable, if you are taking finance it is reccommended that the contract is made for 90 days until the deed of purchase.

Provisional Registration is only made when a mortgage is being used for financing the purchase. This means that the bank will make their first legal charge on the property at the local notary.

Property Transfer Tax (IMT): this tax is paid normally by the lawyer on your behalf a few days before the final deed.

The Final Deed is made at the local notary and the seller and buyer (or the lawyer with a power of attorney) are present along with a bank representative (only when there is a mortgage).

Property Taxes

Property Transfer Tax (IMT)
>85,500 1%............0
85,500 – 117,200 2%............855
117,200 – 159,800 5%............4,371
159,800 – 266,400 7%............7,567
266,400 – 511,000 8%............10,231
511,000 + 6%............0

Example: Property price is €200,000 therfore....
200,000 x 7% = 14,000
14,000 - 7,567 = €6433

Stamp duty = 0.8% x purchase price

Mortgage stamp duty = 0.6% x loan amount

Legal Fees

Provisional Registration (notary & registration of banks first legal charge, mortgage only) €650 approx.)

Final Deed Registration (notary & registration of final deed) - €750 (approx.)

Lawyers Fees 1% - 1.5% or paid by us if you use our designated solicitor

Bank Fees (applicable for mortgages only)........
Valuation & arrangement fee €300 (approx.) We do not charge an arrangment fee, otherwise known as Broker fee's. Bank legal fee €250 (approx.)

Some examples of costs

Property value from€100,000 - €150,000 5% Buying costs (including mortgage)
Property values from €150,000 - €200,000 5.5% - 6%buyingcosts (incl. mortgage)
Property Values from €200,000 -€250,000 6.5% - 7% buying costs (incl. mortgage)
Property valuesfrom€250,000 - €350,000 7.5% - 8% buying costs (incl. mortgage costs)
Propertyvalues from €350,000 - €500,000 8% - 10% buying costs (incl. mortgage)

No comments: