Obtaining a Fiscal number - Número de Indentificação Fiscal

To purchase property in Portugal you must first obtain a Fiscal Number (Número de Indentificação Fiscal).  Applications for a NIF number (Número de Indentificação Fiscal) can be made by tourists, holidaymakers and residents at the local tax office (finanças) on presentation of a valid passport and payment of a small fee. Your fiscal number is issued to you immediately.

 

Opening a Bank Account in Portugal

To open a bank account in Portugal you must first obtain a Fiscal Number (Número de Indentificação Fiscal).  Opening a bank account is a simple process, you will need your passport and fiscal number and some money to deposit into the new account, usually €50 Euros is enough.

There are many banks in Portugal and who you choose is down to personal preference or location. Banking hours in Portugal are from 08:30 - 15:00 Monday to Friday and most banks are closed on weekends and public holidays.

Below is a list of the major banks in Portugal:

Banco Espírito Santo (BES)
Banco Internacional do Funchal (BANIF)
Banco Popular
Banco Português de Investimento SA (BPI)
Caixa Geral de Depositos (CGD)
Credito Agricola (CA)
Millennium (BCP)
Santander Totta

Transferring Funds to Portugal

Once you have opened your new bank account you may want to transfer funds to Portugal.  With your new account details you will be given an IBAN number (International Bank Account Number) and a SWIFTBIC (Bank Identifier Code).

IBAN's are the standard format for account numbers across Europe.

When entering European cross border bank transfer details you will be required to provide both the IBAN and SWIFTBIC details.

A SWIFTBIC is usually a series of letters which identify the receiving bank and country.

The IBAN is usually 25 digits long, 2 characters and 23 numbers. The IBAN identifies the receiving account country, branch sort code and bank account number.

Purchasing Foreign Currency - Forex

Your local bank in your home country can arrange cross border transfers and foreign currency but when transferring large sums of money you can get a better rate of exhange by using a foreign currency specialist, a couple of cents more on the pound can make a big difference when transfering thousands of pounds.

      

Companies such as the Foremost Currency Group and MoneyCorp can talk you through the process of purchasing foreign exchange and will work with you to get you the best rate.

Opening a foreign exchange account is free, there are no obligations whatsoever in opening a foreign trading account. Once an account is opened, you can begin to take advantage of their services, giving you immediate access to the most competitive exchange rates available, market knowledge at your disposal and fast, efficient worldwide transfers.

The Promissory Contract
Contrato de Promessa de Compra e Venda

Once you have found your dream home in Portugal it is normal for a deposit of between 10% and 20% to be paid and a Promissory Contract (Contrato de Promessa de Compra e Venda) prepared by a Lawyer (Advogado) or Solicitor (Solicitadora) to be signed by both buyer and seller. Promissory contracts are a legally binding contract between buyer and seller and it is signed on licensed premises or in front of a notary.

A promissory contract will identify both parties (buyer and seller), the property (it's registration and tax numbers), the property sale price, the amount of deposit paid and the date of completion (signing of the final deed Escritura).

Once the promissory contract has been signed and the deposit payment has been passed over should the seller withdraw from the sale he/she must, by law, pay the buyer double the deposit amount.

There are many licensed estate agents throughout Portugal but it is also quite legal to buy a property direct from the owner. When purchasing property abroad it is recommended that you retain the services of an independent Portuguese Solicitor. Legal fees vary but are in general much cheaper in comparison to the UK.

Completion
Escritura de Compra e Venda

The completion takes place in front of a Notary and is signed by both parties (buyer and seller). At this stage the buyer must pay the remaining balance of the purchase price (purchase price less the deposit paid at Promissory stage). In addition to this the buyer must also pay the notorial fees and tranfer taxes (Imposto de Sisa).

Once the registration documentation is in your name you (or your solicitor) must register it at the Land Registry (Conservatoria do Registo Predial) and the Tax Office (Reparticão de Finanças).

Property Purchase Tax - Imposto de Sisa

Property purchase tax (Imposto Municipal Sobre Transmissão Onerosa de Imóveis) must be paid before you complete and proof of payment must be shown to the notary.

Purchase tax is paid on a sliding scale based on the purchase price. The percentage paid varies based on Permanent Residence and Non Permanent Residence.  Below is an example of purchase tax (2011):

%  Purchase Price

Less Reduction

0% - Up to €92,407

2% - €92,407 – €126,403

5% - €126,403 – €172,348

7% - €172,348 – €287,213

8% - €287,213 – €574,323

6% - Higher than €574,323

€ zero

€1,848.14

€5,640.23

€9,087.19

€11,959.32

€ zero

Estimating Property Tax

Using the above percentages as a guide, if you purchase a house for €150,000 euros you would be required to pay 5% of the sale price less a reduction of €5,640.23:

€150,000 x 5% = €7,500 minus €5,640.23 = €1,859.77

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