ABREU ADVOGADOS
Can anyone (including foreigners) own and occupy real estate in your jurisdiction (including shares in property owning companies)? Are there any restrictions?
Yes, anyone can own and occupy real estate in Portugal. There are no restrictions.
Are there restrictions on lending for the purchase of real estate by foreign companies? If so briefly give an outline?
Foreign investment in real estate is granted with a level of protection like domestic investment, without regulatory measures applying.
Real estate transactions must comply with a range of information requirements aimed at enhancing clarity and transparency. These include measures to combat money laundering and terrorism financing, as well as obligations to identify the ultimate beneficiaries who hold direct or indirect control over legal entities.
Buying
Please provide a short summary of the fees and costs (including tax) relating to buying real estate in your jurisdiction.
The acquisition of the right of ownership over a property is subject to Municipal Property Transfer Tax (“IMT”), to be paid by the buyer, prior to the execution of the final deed.
The rates are as follows:
- Urban property for habitation purposes: maximum rate of 7,5% (rates vary according to the price of the property).
- Urban property for commercial or services purposes: 6,5%.
- Rural property: 5%.
A rate of 10% will be applicable if the buyer is an entity with its tax residence or is an entity dominated or controlled, directly or indirectly, by an entity with its tax residence in a country, territory or region subject to a more favourable tax regime, listed by Portuguese Government. Rates will be applicable over the tax value of the property or the value of the sale, whichever one is higher
Stamp Duty (“IS”) is also payable on the transfer of property by the purchaser at a rate of 0.8% of the purchase price.
Conveyancing fees (notary) and emoluments for the registration of the property are also due. These values can vary but usually do not surpass € 1,500 on a plain vanilla acquisition.
Owning
Are there taxes applicable to owning real estate and can the burden of the taxes be passed to someone else (e.g. a tenant or an occupier - not being the owner
The purchaser will be subject to Municipal Property Tax (“IMI”), at a rate varying between 0.3% and 0.5% over the taxable value of the property, in case of urban property, and at a rate of 0.8%, in case of rural property. A rate of 7,5% will be applicable if the owner is an entity with its tax residence or is an entity dominated or controlled, directly or indirectly, by an entity with its tax residence in a country, territory or region subject to a more favourable tax regime, listed by Portuguese Government.
Tax Breaks
Are there tax breaks or other incentives for foreigners to buy real estate in your jurisdiction? If so, what are they?
Yes.
Under Portuguese law, certain IMT exemptions on the purchase and sale of real estate may apply, provided certain conditions are met, such as the acquisition of properties:
- by real estate trading companies for the purpose of resale;
- for rehabilitation purposes,
- people under 35 buying their first permanent home; and
- under company restructuring operations.
How is the ownership of Real Estate evidenced in your jurisdiction?
Ownership is evidenced by the registry certificate issued by the Real Estate Registry. This is a public entity.
Is it possible to keep the identity of owners of real estate confidential in your jurisdiction?
No. The property registry is public.