Market overview
Portugal’s property appeal is just as strong as Spain thanks in no small part to a single place: The Algarve. The southern region of the country is known for boasting some of the best golden beaches in the world, with over 100 miles of sandy coastline and hours of sunshine from its Mediterranean climate to treat tourists and holiday home owners.
As well as beachfront apartments in hotspots such as Albufeira and Tavira, Algarve has also built up a strong reputation among the golfing community thanks to professional facilities, world-class courses and luxury resorts. The combination of sunshine, sea and sports has guaranteed the Algarve a position at the top of the wish list for second home buyers and investors alike.
The Selling Process
Market your property
The normal means of marketing a property in Portugal is via an estate agent who can also value your property. If you used an agent to buy your Portuguese home, it would make sense to use the same one to sell it as they will already know the property. Alternatively, you could try to sell your property at auction.
Hire legal representation
Once you have found a potential buyer, the next thing to organise is legalrepresentation. There are three professionals you would be advised to deal with:
- A public notario who unlike traditional lawyers, are neutral government legal representatives who act as witnesses to and registrars of property transactions. Outside of the Algarve, Lisbon and Porto you are unlikely to find an English-speaking notario.
- A reputable English-speaking Portuguese solicitor (advogado) to represent your interests and offer impartial legal advice.
- An UK solicitor versed in Portuguese property law, as Portuguese solicitor who speaks good English will probably not be versed in UK law.
Negotiating a reservation contract
Once you are ready to start negotiating over price, you should be sure of your minimum requirements and be willing to walk away from a deal if they are not met. If you have already identified alternative buyers you would be equally happy to sell to this will be easier to do. In Portugal, there is a practice where some of the purchase price is paid ‘under the table’ meaning some of the purchase price is paid to the vendor in cash and undeclared to the authorities In spite of apparent financial benefits, this can be risky as it is illegal and you may have difficulty hiding such a large cash sum from widespread anti-money-laundering regulations. Once you are happy with the price you might accept £2,000 to £3,000 from the buyer for the property to be taken off the market while your lawyer draws up a contract.
Preliminary agreement
Once all the necessary legal checks have been completed to the satisfaction of the buyer, you will be ready to sign an initial promissory contract (contrato promessa de compra e venda).Before this stage you should have had the contracttranslated into English and ideally have English-speaking assistance on handduring the signing. The contrato promessa details the finer points of exactly what you are selling, and includes all the fundamental information about the sale such as the purchase price (including how and when it should be paid), the list of fixtures and fittings included in the sale, and the completion date when the deeds will be signed and the property transferred into your name.
Deposit
At this point, the buyer must pay 10% of the purchase price as a deposit. If the buyer walks away from the deal subsequently, the deposit will be forfeit; if you, the vendor, walk away, you are liable to pay the buyer twice the value of thedeposit in compensation.
Completion
After all the legal paperwork has been completed, the buyer will be ready to sign the title deeds (escritura). This is the moment of truth when ownership of the property will pass from vendor to buyer.
The notario must be present at this event to formally witness and register the transfer of ownership on behalf of the Portuguese government. Both parties will need to provide passports or other proof of identity and unless you speak good Portuguese, the notary will insist that a translator is present to ensure you understand the full implications of the contract you are entering into.
Upon completion, the buyer must pay the balance of the purchase price, all professional fees, transfer (IMT) tax and notary fees.
Land Registry
The seller has, as a rule, a more secure position than the buyer.The seller has to make sure that his property rights are entered in the Land Register in accordance with the law, and that the real estate is also correctly described therein.
The description of the real estate in the Land Register must correspond with the description of the real estate at the tax office or in the caderneta predial. Should this not be the case, then the entries must first be harmonised before theconclusion of the purchase contract. The seller also has to comply with the legally stipulated notification requirements toward those having rights of pre-emption.
Average selling prices
1 Bed Apartments
£87,835
2 Bed Apartments
£110,079
3 Bed Apartments
£139,689
2 Bed Homes
£132,481
3 Bed Homes
£225,190
4 Bed Homes
£359,051
Once you can tick off all of these items, you have paid to sell your home.
Estate agent’s fees Property transfer tax CGT
Photos: Melenama, Images_of_Money, AJC1 / Diana Parkhouse
