Buying Property in Portugal: Your Legal Questions Answered

In a recent live webinar, Dr. Sandra Gomes Pinto — immigration and property lawyer with over 30 years of experience — walked attendees through the full process of buying property in Portugal and answered live questions. Here is a comprehensive summary of the key Q&As.

What are the first steps to buying property in Portugal?

The process starts well before you sign anything. Step one: obtain a NIF (Número de Identificação Fiscal) — Portugal's tax identification number. We can arrange this online on your behalf. Step two: open a Portuguese bank account. While technically not mandatory, it is highly advisable — sellers expect payment by bank cheque at the deed signing, and the account simplifies paying taxes, utilities, and condominium fees later. Once you have your NIF and bank account, you can begin searching for a property through platforms such as Idealista.

What legal due diligence is required before making an offer?

Before committing to any purchase, your lawyer should check the permanent land registry certificate (Certidão Permanente) to verify ownership and identify any mortgages, liens, or ongoing litigation. They should also check with the tax authority (Finanças) that the property is properly registered, verify the usage licence with the city council (Câmara Municipal), and confirm that what physically exists matches what was licensed. The condominium manager should also provide a declaration confirming the seller has no outstanding debts to the building.

Should I hire an independent engineer to inspect the property?

Absolutely, especially for used properties. Portugal used asbestos in construction during the 1980s and we have had clients who purchased properties containing it — removal was costly and responsibility was not clear-cut. Your inspector should check for mould, damp, structural defects, electrical problems, pollutant materials, and any illegal extensions that don't match the licensed plans. This inspection is money very well spent before entering into any contract.

What is the reservation agreement and how does it work?

A reservation is an informal agreement to take the property off the market while your lawyer completes due diligence. You typically pay between €5,000 and €10,000 into a separate account. This is the window to complete legal and technical checks before committing. Only once all inspections are satisfactory should you proceed to the promissory contract.

What exactly is a promissory contract (CPCV)?

The promissory contract (Contrato-Promessa de Compra e Venda) is a fully binding agreement regulated by the Portuguese Civil Code. It identifies buyer, seller, and property; sets out all terms of the deal, the completion date, and payment structure; and includes seller declarations — for example, confirming there are no hidden defects, pollutant materials, or undisclosed encumbrances. Signatures must be notarised. If the seller backs out, they must return the deposit doubled. If the buyer backs out without cause, the deposit is forfeited. The contract can be tailored to your specific needs, including inspection contingencies or a financing clause.

Why is registering the promissory contract at the land registry so important?

This is one of the most critical steps buyers frequently overlook. In Portugal, the down payment goes directly to the seller — it does not sit in escrow. Once the seller has your money, registering the promissory contract at the land registry prevents them from selling the property to a third party and prevents any creditor of the seller from registering a new lien enforceable against you. We strongly recommend always registering the promissory contract. It is the fundamental protection for any buyer who has handed over a deposit.

Should I secure financing before signing the promissory contract?

Yes — we always advise clients to secure mortgage approval before signing the promissory contract, rather than including a financing contingency clause after the fact. If your bank's appraisal comes in below the purchase price, note that non-residents can typically borrow only 70–80% of the appraised value, so the shortfall is yours to cover. Confirm your financing is approved first, then sign the contract.

What taxes and fees should I budget for?

As a simple rule of thumb, add 10% on top of the purchase price to cover all acquisition costs. This includes: the property transfer tax (IMT), which runs at 6–8% depending on the property value and your residency status; stamp duty at 0.8%; notary and land registry fees; and legal fees. If you are under 35 and buying your primary residence for under approximately €330,000, you may qualify for a full IMT exemption — partial exemptions apply up to around €660,000. These thresholds are updated annually by the government, so always verify the current brackets.

What documents do Portuguese banks require for a mortgage?

Banks will typically ask for: your passport and NIF; the last three tax returns; recent payslips; the last three to six months of bank statements; and an overview of your overall assets and liabilities. Be aware that Portuguese banks generally will not lend beyond the borrower's age of 70–72, which surprises many American buyers. When transferring funds from abroad, allow five to seven working days — and build in extra buffer time. Arriving late to a deed signing because of a delayed transfer is a serious and costly problem.

What happens at the deed signing?

The deed (Escritura) can be executed by a notary or a lawyer. All legal documentation is verified a final time, and the title formally transfers from seller to buyer. Payment is made by bank cheque in the seller's name. We advise paying taxes on the day of the deed, but not before you are certain the deed will actually proceed — last-minute details occasionally cause delays. Immediately after the deed, the property is registered in your name at the land registry. Always request written confirmation of this registration.

What if the property has existing tenants?

Be very careful. Tenants in Portugal are strongly protected by law — and courts tend to be even more protective than the legislation requires. The existing lease transfers to you as the new owner. Tenants also have a right of first refusal: before selling to a third party, the seller must offer the property to the tenant on the same terms. Failing to do so gives the tenant the right to challenge and potentially void the transaction. This must be addressed explicitly in the promissory contract.

What is Dr. Sandra Gomes Pinto's most important advice for property buyers?

Hire your own independent lawyer — independent from the real estate agent and independent from the seller. The property market in Portugal is competitive and agents will often suggest using their affiliated legal team, but those lawyers work in the agent's interest, not yours. Your lawyer should conduct proper legal and technical due diligence, verify the usage licence, and ensure the promissory contract is both notarised and registered at the land registry. These steps together make buying property in Portugal genuinely safe and straightforward.

📩 Thinking of buying property in Portugal? Contact us at sgp@sandragomespinto.com or visit www.sandragomespinto.com. Our team provides full legal support throughout the acquisition process — from NIF and bank account to deed signing and beyond.