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Property purchase costs in Portugal

Property purchase costs in Portugal The total cost of buying a property in Portugal includes the purchase price and the closing costs, which average 6-10 percent of this price. So how does it add up?

Buying an overseas property is an exciting thing to do and Portugal is a great place to choose. However, it is important to be cautious throughout the process and equip yourself with as much information as possible before setting your sights on that dream house. 

Property law in Portugal

The first thing to consider is that the Portuguese legal system is not the same as the UK’s. Although you don’t necessarily need a lawyer to oversee your purchase, we’d advise you to seek out a reliable independent lawyer who really knows Portuguese law. They will be able to assess whether the contract is OK to sign, if you should pay the deposit, advice on who should own the property, and so on.

Another essential person to help with your house buy is the Notary, who will get involved at the end of the transaction. Their role will be to carry out some basic checks on the property, attend to the signing of the title deed and in some cases register the property. 

Budgeting for property in Portugal

The total cost of buying in Portugal could be higher than in the UK and it is important that you consider this from the beginning of your house search. Purchase costs include IMT (Imposto Municipal sobre as Transmissões onerosas de Imóveis), “Imposto do Selo”, and usually Notary Public Fees. In addition, you may also be asked to sign a reservation contract or a Promissory Purchase and Sale Contract and pay a small deposit, which is called a “Sinal”.  

Signing this contract is the most important sign that you wish to proceed with your purchase, and will effectively take the property off the market. After signing this, you’ll then work towards a full purchase contract (which commits you to buying the property) and pay a deposit, typically 10%. 

Property surveys in Portugal  

As is standard in the UK, we’d also recommend you obtain a survey when buying your Portuguese home, as it will reduce the chance of discovering any defects or nasty surprises about the property’s condition after you’ve bought.  And if there any structural problems, this will help you to negotiate the price or insist certain works be carried out before the house is purchased. 

FAQs: Property purchase costs in Portugal

How much does it cost to buy a house in Portugal?

In addition to the purchase price, buyers should budget around 7%–10% of the property’s value for taxes, legal fees, and registration costs. This includes property transfer tax (IMT), stamp duty, notary fees, and lawyer fees.

What is IMT in Portugal?

IMT is the property transfer tax paid when buying real estate in Portugal. The rate depends on the purchase price, property type, and whether it will be your primary or secondary residence. Rates range from 1% to 8%, with higher-value properties taxed at higher bands.

Do you pay stamp duty when buying property in Portugal?

Yes. Stamp duty (Imposto de Selo) is 0.8% of the purchase price and is payable at the time of signing the final deed.

What are notary and land registry fees in Portugal?

Notary and registration fees are typically between 0.2% and 1% of the purchase price. These cover the formalisation of the deed (Escritura) and updating the Land Registry to reflect the new ownership.

How much are legal fees when buying in Portugal?

Legal fees usually range from 1% to 2% of the purchase price, or a fixed fee agreed in advance. Hiring an independent lawyer is highly recommended to protect your interests.

Do buyers pay estate agent fees in Portugal?

No. Estate agent fees, usually 5%–7% of the property’s value, are paid by the seller. However, these fees may be reflected in the advertised property price.

Are there extra costs for new-build properties in Portugal?

Yes. VAT at 23% is charged on some new-build properties instead of IMT. Buyers should confirm with their lawyer whether VAT or IMT applies.

How should I budget for additional costs when buying in Portugal?

It is wise to set aside 10% of the purchase price to cover all fees and taxes. If you are transferring funds from abroad, remember that exchange rates can affect the final amount you pay. Money can be transferred to Portugal using international bank transfers or specialist foreign exchange providers — get in touch with A Place in the Sun Currency today to see how we can help.

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