No hidden costs or surprises here

We know that you have been thinking about buying property in Portugal for a while. We also know that it is a big step, one of the biggest investments you will make, and that investing your money in a different country can seem daunting. But by finding out as much as you can about the purchase process and using a great real estate agency - Triennial Properties - for example, things start to seem a little less daunting and a little more exciting. 

When it comes to splashing the cash, we all want to know what we are spending and don't want any nasty surprises. When you start looking to buy, we know you will have a budget in mind, but it's important to know what extra costs you will have to pay so that you can adjust your expectations accordingly. 

Luckily, we have collected all the associated costs together so that you can make all the calculations in the comfort of your own home. However, as a general rule of thumb,if you budget an extra 10% to cover the buying costs that will be more than enough to cover everything.  

Here are the one-off costs you pay when purchasing property in Portugal:

These costs are usually transferred to your lawyer seven to 10 days prior to deeds as they have to make the payment 24 hours in advance. You cannot complete the deed without proof that these costs have been paid.

The costs are determined by a number of different factors:

• Price of the property
• Permanent residence or second home
• Type of property 

IMT - PROPERTY PURCHASE TAX: Imposto Municipal sobre Transamissoes

This is the largest of the buying costs and is based on the higher value of either the purchase price or patrimonial value (assessed value) of the property.

IMT is calculated using the following rates - prices correct as of 2023

For rural and agricultural plots a flat rate of 5% is applied, for other purchases such as commercial or building plots a flat rate of 6.5% is applied, and for offshore properties in blacklisted jurisdictions, a 10% rate is applied.

You can also visit the APEMIP website here and calculate the tax rate yourself using their online calculation tool. 

STAMP DUTY: Imposto de selo

Many clients are surprised by how little the stamp duty is here in Portugal – just 0.8% of the purchase price.

There is 0% to pay on corporate property ownership transactions.


LAND REGISTRY & NOTARY FEES: Taxas de registo predial e notário

Every action associated with a property, be it a sale, addition of a pool or extension has to be recorded in the Land Registry. When you buy a property and become the new owner you must also have this change recorded.

Don’t worry, this is all part of the job that your lawyer undertakes for you, they will ensure that all changes are completed on time. Fees for the Land Registry are around €350.

Moving onto the Notary. In Portugal, you cannot become the lawful owner of a property without you, or your chosen representative, signing the final deeds in the presence of a notary. Notaries are highly trained lawyers qualified to draft and legalise contracts and transactions within the Portuguese legal system and will oversee both the signing of the Promissory contract and the final Deed. Once they have gone through all the paperwork they will legalise the documents with their signature and stamp.

Notary fees are regulated and are around €850. Together with the land registry, fees are around €1,200.

LAWYER FEES: Honorários dos advogados

You don't have to use a lawyer when you buy a property, but we strongly advise you do. By using one you know exactly what you are buying, without falling into any traps. There are many law firms to choose from in Portugal and we recommend that you choose a lawyer based here to represent you. Each country has its own laws and protocols, even if your lawyer in your home country is the best of the best, if they are unfamiliar with Portuguese property law it could become very expensive and inefficient for you to use them rather than a lawyer who is based in Portugal and knows the system.

Lawyer fees vary from firm to firm, their costs will also depend upon how much or how little they do for you. Legal costs are usually 1 - 1.25% of the purchase price.

Legal fees are usually paid in two parts, half at the Promissory contract stage and half on completion of the Deeds.

SURVEYOR FEES & MORTGAGE FEES: Honorários de agrimensor e taxas de hipoteca

Surveys are not mandatory, however, it is better to be safe than sorry, so we always recommend our buyers obtain a survey prior to purchasing. The cost of a survey will depend on the size of the property, the condition it is in as well as the type of survey you require. The survey will show any faults and defects in the construction and you will receive a full written report which will assist your lawyer to identify any planning illegalities within the property prior to contracts being signed. In terms of pricing, we recommend to budget between €500 - €1,300.

Many clients choose mortgages to assist them with purchasing their perfect property in Portugal. If you choose to take out a mortgage the banks will usually charge an application fee, which can vary from €250 to €500 if your application is accepted. There will be a valuation fee of around €500 and you will also need to take out life insurance.

That's the one-off costs covered, here are the running costs to consider now that you are a homeowner:

IMI - PROPERTY TAX: Imposto Municipal sobre Imóveis

This is Portugal’s equivalent of council tax and it pays for the ongoing upkeep and maintenance of the local area, including services such as bin collections and recycling. IMI is only applicable to the owners of the property, tenants are exempt.

IMI is charged by your municipality (council) based on the value of your property and the perceived wealth of the area in which you live. Each municipal sets its rate, which is decided by the municipal assembly. IMI varies from around 0.3% to 0.45% of the value of property in urban areas. In rural areas, it can be as much as 0.8%. Homeowners in urban areas with properties worth less than €125,000 can benefit from a three-year exemption on IMI, as long as they live in the property themselves. You can get a further deduction of around €20 for each dependant, and exemptions also exist for people with low incomes or those with energy-efficient homes.

AIMI: Adicional Imposto Municipal Sobre Imóveis

First introduced back in 2017, AIMI - Adicional Imposto Municipal Sobre Imóveis - regarded by many people as Portugal’s equivalent of a wealth tax, affects owners with a share in Portuguese property worth over €600,000. If you and your partner jointly own the property, you only pay AIMI if the value is over €1.2 million.

Regardless of residency status, AIMI rates applied are 0.4% on the total amount for properties held by companies, 0.7% for individuals, and 1% for those owning property valued over €1 million. 

RUNNING COSTS

You will have monthly bills to pay - water, electricity, maybe gas and of course internet and TV. Water and electricity will vary depending on usage and the size of the property as well as if you have a pool, big garden etc. Shop around for your internet provider as there are other options than just MEO and NOS! 

If you buy a property within a condominium then there will be condo fees to pay, either monthly or quarterly. These will vary from condominium to condominium, the main factors that go into the cost of these are the communal areas that need maintenance, pools, gardens, lifts and parking areas. These can vary from €30 - €200 per month.