Buying Property in Portugal : Costs

Alcino,  Wednesday, 8 January 2014


This article is part of a series of 8 articles about buying property in Portugal. The other articles in the series cover the following topics:

As would be expected almost anywhere in the world, the agreed sales price is not the only expense to consider when purchasing a property. In Portugal, the buyer is liable for all the purchase costs. In order to avoid unpleasant surprises, you need to have a good understanding and be able to budget for all the expenses involved in acquiring and maintaining a Portuguese property. All acquisition costs can also be offset against Capital Gains tax liabilities in the event of a future sale; so it is important and wise to keep and file all documentation and records carefully.

The costs involved in purchasing a property will vary depending on the price of the property.

Below we will list and briefly explain all the costs you should be prepared to incur when buying a house in Portugal:

The Deposit

Once you have found a property and a price has been agreed upon with the seller, you will usually be asked to sign a binding Promissory Contract and put down a deposit. Although amounts may vary, it is common practice for a buyer to place between 10% and 30% of the purchase price as a deposit. In accordance with the law that governs Promissory Contracts, if either party forfeits the other is guaranteed compensation.

Property Transfer Tax

Property Transfer Tax (or IMT – discussed in detail in the article entitled will most probably be the largest expense you will face over-and-above the price of the property you plan to purchase. Depending on the value of the property, and your intended use for the same, the Property Transfer Tax will set you back somewhere between 0% and 6% of the agreed price or the Taxable Value (see aforementioned article) – whichever is greater.

This tax must be paid at a Tax Office (or Finanças, as it is referred to locally) before completion of the final deed (escritura) at the notary’s office.

Stamp Duty

In addition to the Property Transfer Tax, Stamp Duty (Imposto do Selo) must also be paid at a fixed-rate of 0.8% of the purchase price.

Notary and Land Registration Fees

These fees will usually sum up to around €600 in total (it varies from notary to notary) and include the administration work to be completed and the official registration of the property in your name at the Land Registry.

Legal Fees

It is highly advisable for foreign individuals that are not fluent in Portuguese and have little knowledge on Portuguese law, customs and the processes involved in purchasing a property, to contract the services of a bilingual and experienced lawyer. Fees will typically range from 1% to 2% of the purchase price, but will most definitely help ensure that your best interests are safeguarded and that you avoid problems along the way. The exact amount will depend on the amount of work involved, although there is usually a minimum fee, e.g. €1,000.

Fiscal Representation Fees

By law, all Portuguese non-residents, that are citizens or residents of countries outside of the European Union, must appoint a natural or legal person, resident or established in Portugal, to represent them in all tax related matters and ensure compliance with all their fiscal obligations. Although no longer legally required to do so, non-residents from other EU countries may still wish to appoint such a representative, as the Portuguese Tax Office does not send any correspondence or tax bills outside of the country, and taking care of matters as they arise may prove to be impossible otherwise. There are also numerous advantages to having someone (person or business), that is fluent in the language and experienced with the law, handle these issues on your behalf. A basic service, that includes receiving your tax bills and notifications, keeping you up-to-date, and settling your yearly Municipal Taxes, typically costs anything between €100 and €300 per year.

Mortgage-Related Costs

If you require financing to complete the purchase of a property in Portugal, you will have to budget for mortgage arrangement fees. Certain expenses, like Stamp Duty charged by the government, will vary in relation to the amount being borrowed, but other costs charged by the bank, such as the property valuation service, administration fees and contract commissions, usually have fixed prices. You should budget for around 1% of the loan amount to cover these costs. Mortgage brokers have different ways of doing business, but if you decide to take this path and appoint the services of someone to assist you in this matter, some may ask you to pay a commitment fee.


In short, over and above the price of the property itself, you should account for up to 10% of the purchase price to be incurred in expenses associated with the process of acquiring a property in Portugal. Other than miscalculating or underestimating costs related with the property purchase process, one of the biggest mistakes made by non-Eurozone buyers is failing to realise the impact of exchange rates on the final purchase price of a property. Always make sure that you fully understand how fluctuations in currency exchange rates can affect your plans and, if possible, appoint the services of a specialised company that can help you minimise the risks.

House in Portugal
All types of property for sale in Portugal by private sellers and estate agents. Find your perfect villa, condominium or apartment in the Algarve or the Silver Coast. 

beach portugal Portugal’s property market caters for almost every budget and taste, and its wide diversity of regions, landscapes, climates, traditions and ways of life, make it a suitable destination (long or short term) for many. 
More articles