Now you’ve decided to sell, one of the top questions on the list is, how much will it cost?

As the famous saying goes “nothing is certain except death and taxes” and when selling your property there is no escaping it, there will be taxes to pay as well as estate agency fees.

Our commission

Let’s get our fees out of the way first.

Estate agents charge a fee based on a percentage of the price they sell your property for, and in the Algarve, this can be anywhere from 3% up to 10% - the industry standard is 5%. For higher-priced properties, agents are prepared to accept lower fees.

With us there are no hidden costs, all our services are included, and those services are:

• Valuation of your property based on local knowledge, area trends, and past sales combined with our online valuation tool
• Professional photos and video walkthroughs
• An enticing, well-written description
• Drumming up interest from our database of existing potential buyers
• Marketing your property to thousands worldwide on international and national, portals, showcased on our website, sent out as one of our monthly newsletters, featured on our social media channels
• Organising and managing viewings
• Negotiating the sale price

The commission percentage for selling your property is agreed upon at the start of the process and is written into the mediation agreement. The mediation contract will also state when the commission is due to be paid, and there are a few options:

• 100% once the promissory contract has been signed
• 50% at promissory and 50% on the deed
• 100% on the deed

The table above shows you what you can expect to pay when selling a property in Portugal (excluding IVA.)

Capital Gains Tax (CGT)

In a nutshell, capital gains is the tax you pay on the profit from the sale of a property that was purchased at a lower price. You or your representative (lawyer, accountant etc) will need to submit a report to the tax department with the following information to determine the tax to be paid:

• Selling price
• Original purchase price
• Deductible expenses
• IMT, notary and land registration charges at the time of purchase
• Property enhancements from the previous 12 years

As a non-tax resident in Portugal, individuals will pay a flat rate of 28%, non-tax residential companies pay 25%. For residents, only half the gain is taxed, and you will be taxed according to the tax bracket applicable to your overall income.

Exemption from CGT is possible in certain situations:

• If the property was acquired prior to 1989 
• If you use the full amount from the sale to buy another home (only applicable to tax residents and only on the sale of the primary residence,) to build a home or purchase land for construction. Reinvestment needs to happen within 36 months and can be done in any EU county

To ease the cost of CGT you can deduct certain things from the sale price of your property:

• The costs incurred with the purchase and sale e.g. IMT/land registry/real estate commission/energy certification etc
• Taxpayers can deduct costs incurred on the property over the previous 12 years such as property refurbishments or money spent to increase the value of the home

If the registered public deed price of the property is lower than the rateable value, the CGT will be calculated on the higher value. 

Legal Fees

When selling a property most of the work is done by the buyer’s lawyer. Legally you don't need to have a lawyer when selling, but it is advisable. By engaging the services of a Portuguese lawyer to represent you they will be responsible for making sure that all your paperwork is up to date and correct, they will check contracts and will confirm any responsibility for capital gains liability. For this, the average charge is 1% of the sale price of the property.

Debt-free

When you decide to sell it is important to make sure that you clear all your civic municipal dues and council taxes. If you live in an apartment you may have to pay service charges and final maintenance fees. It is also essential to pay any outstanding utility bills in full before the sale concludes.

Inheritance tax

If you are choosing to sell due to a death in the family, there is no inheritance tax to pay in Portugal for direct heirs of the deceased. If the property was transferred or gifted between spouses or to direct heirs there will be stamp duty to pay, a flat rate of 0.8% – usually based on the property’s rateable value.

Transfer of ownership to any other individual or corporate bodies will be subject to a flat 10% rate, plus 0.8% stamp duty.

These figures only apply to residents, non-residents may be subject to inheritance laws of their country of residence and should consult tax advisors for more information.