Portuguese Property Advice: Contracts, Funds, Deeds & Registration
Promissory Contract
Once all negotiations about the property or land have reached a satisfactory level to both parties, the process can move to the drafting of the contract. It is vital at this point that you are clear about all aspects of what you entering into, as if you back out once the contract is signed you will lose your deposit. If the vendor subsequently backs out, they will have to pay you double any monies you have already paid down. It is therefore abundantly clear that the closer contact you have with your legal aides at this point, the better for all concerned. Even if they have Power of Attorney for you, you must ensure you check the contract and are happy with what is laid out in it. There is very little comeback after it is signed. If you are in a part of Portugal where you have little access to English-speaking assistance, have the contract translated into English by a professional (English native translator) before you agree to sign.
Providing the Funds
You can pay for your purchase with cash, with a loan (possibly linked to a mortgage), or through an off-shore company. However, with recent changes to the property tax system in Portugal, the latter may no longer be an attractive option. At this point in the process you need to be able to pay your 10% deposit and have the funds available for the final payment on the property.
Deeds
The Escritura is the official Deed of Transfer from the vendor to you, the new owner. It is a document which is signed either by you or your solicitor at the office of the Notary Public, and stays in the hands of the Notary for records. The Notary reads aloud all the particulars of the deed before everyone signs it. If you do not speak Portuguese you may wish to check with your lawyer that you understand exactly what is going on at each stage.
You can purchase as many legalised copies of the deed as you wish, but this is the only form of property 'deeds' which exist in Portugal. Once signed, the Escritura gives you official ownership, but you still have to register the property under your name with as little delay as possible.
Registering the Property
New ownership of the property or land must be carried out at the local Land Registry office (Conservatdria do Registo Predial). You will need a legalised copy of the Escritura , the property tax certificate obtained by registering at the tax department, and you will complete a land registry form and pay a small fee. In due course, the new purchase details will be added to the property's title records.
