Owner in Portugal

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To become an owner in Portugal you have to consider several options and particularities. Below is some information that we consider pertinent and which is a starting point for this process.

 

Advantages to Buy and Invest in Portugal
 

Since a few years that Portugal offers a number of investment advantages quite attractive for those who choose to buy a property in Portuguese territory. The two most attractive incentives currently available to investors are:
 

1) The Golden Visa and the Residence Permit for Investment Activity ("ARI") - The Residence Permit is intended for any non-European citizen who wishes to have access and free movement to the countries of the European Union and the Schengen Area. The "Golden Visa" is awarded under certain conditions, including:

 

The acquisition of a property in Portugal of € 500,000.00 or more; The buyer must remain in Portugal for a minimum period of 7 days in the first year; The buyer must remain in Portugal for a minimum period of 14 days in the following 2 years; After the fifth year the buyer / owner can apply for a permanent residence permit that will allow the requisition of Portuguese citizenship.
 

2) Non-Habitual Resident (NHR) and Tax Regime for Non-Resident Residents - This tax regime allows tax exemption on almost all sources of income earned abroad and a fixed income tax rate of 20% on earned income Earned in Portugal.

 

Some of the benefits of this special scheme include the following exemptions: payment of pension taxes; Payment of taxes on inheritance; Payment of income taxes; Of payment of Taxes on interest and dividends.

 

 

The Process of Buying a Property in Portugal - The Initial Steps
 

Here are some important steps to follow in the process of buying a property in Portugal:
 

1º Which property best suits your needs and budget (apartment, townhouse, housing or land);
 

2º What is the objective of the purchase of the property (permanent residence, vacation home or lease);
 

3º If you are going to buy a property through a company, for tax benefits, analyze well the pros and cons;
 

4º The most common mode of transmission of a property is the deed of purchase and sale, which, as a rule, is granted in a notary public or a land registry office.

 

Property Ownership
 

There are several ownership options available. Always keep in mind that it is crucial to analyze the different options available and to obtain legal and tax advice on them. The decision you make at this stage will be very important in the future.

 

The main ways to acquire a property are: on behalf of the acquirer singular person; In the name of a company, national or international. But due to some tax restrictions, we do not advise buying on behalf of companies listed in the "list of countries, territories and regimes with more favorable preferential taxation regimes" periodically updated by the Portuguese Government.

 

Taxes and costs associated with the purchase of a property
 

All acquisition costs may be discounted in future capital gains, provided that they are properly documented and in compliance with certain legal requirements.

 

The fees and costs of Notary and Land Registry are fixed although they may vary according to the type, number and complexity of the acts practiced or their registration, however the Municipal Tax on the Real Estate Transfer (IMT) and the Stamp Tax Are calculated on the declared sale price of the property.

 

Stamp duty is calculated according to the fixed rate of 0.8%, while the IMT is calculated based on a table, updated annually, with a scale of 1 to 8% of the declared value of the acquisition. In lots for urban construction the applicable rate is 6.5% of the declared value.

 

The Municipal Property Tax (IMI)
 

The IMI is charged annually, and can be paid up to three monthly installments, depending on the value.

 

The tax is calculated on the Tax Patrimonial Value (VTP) of real estate.The IMI rate is set by the Municipal Assembly for the following year. The applicable rate varies between 0.3 and 0.5% for urban buildings.

 

The Mortgage Loan

The Housing Credit in Portugal normally grants up to 75% of the value of the bank evaluation of the property.

 

In general, 25% of equity capital is required and income proof is required. The criteria for granting credit as well as interest rates, spreads or associated costs, etc. Depending on the credit institution.