Written By Jessica Baker – email@example.com
There are many different reasons why people move abroad. Whether it’s to pursue a new career opportunity or have a better quality of life, the process can be very complicated. This article has been written in association with Triton Cottage, and will give you an idea on what procedures are involved if you’re thinking about relocating to mainland Portugal.
Update: this post has been provided by Brenda O’Brien
When you have found a property you must appoint a lawyer to carry out checks and ensure it’s structurally sound. The lawyer you choose should also determine who legally owns the property by contacting the tax department and the land registry (Repartição de Finanças).
If you are a non-resident you must obtain a Fiscal Number from the local tax office. This nine digit number is used on all of the legal documents related to property sales. To receive a Fiscal Number you will have to pay both an upfront and annual fee.
Before you pay any money for the property a Promissory Contract should be drafted which outlines the terms of the sale. When this document has been signed by both parties a 10% to 30% deposit should be paid.
After the Promissory Contract is signed a provisional registration of the property is administered by the Land Registry. This will include the full details of the property such as the location and proprietors, etc.
IMT Transfer Tax
When the property is provisionally registered your lawyer will have to pay the IMT Transfer Tax. This amount is based on a percentage of the property purchase price. At this point Stamp Duty (Imposto de Selo) is also required.
A Notary (Notário) is required to authorize the purchase and sale contract. This Deed will identify both parties and the terms of the sale. If the transaction involves the transfer of a mortgage, another Stamp Duty must also be paid.
When the Deed has been signed the registration should be completed at the Land Registry. In addition, the local Tax Office must be informed of ownership change. They will require a copy of the Deep, IMI and Municipal Property Tax return.
The first IMI Municipal Tax bill will be issued during the calendar year that follows the Deed date. This is based on the rateable value of the property – which is usually substantially less than the property value. Expect these bills at least twice per year in the months of April and September.
In Portugal, all of your income from renting out a property must be administered, even if the transaction was conducted abroad. Your local tax office will then liaise with you to determine whether or not it will be possible to offset the tax in Portugal.
Algarve, Portugal is a very popular location among British expats. While there are a lot of legal processes involved when moving, the beauty of the area alone is worth the hassle.