Visits to choose the ideal home, conversations with brokers or owners, trips to the bank, copies of various documents, rules and bureaucracies. There are many stages to conquer the dream of owning a home in Portugal.
The country, the main European destination for immigrants, offers possibilities for the purchase of real estate, including financing. In this case, however, the buyer must meet the requirements imposed by the chosen banking institution. In the case of cash acquisitions, the procedure is simpler, since the person can appeal directly to the real estate agency or to the owner of the property, by formalizing the business in a notary office.
According to the Portuguese Notaries website, it is necessary to bring an identification document, a certificate of registration of the property, which states who owns the house or apartment, and the so-called urban land registry, which is a document that proves the legal status of the property.
At the time, both the buyer and the seller must be present. If the person selling the property is married under the general community of property regime, the spouse must also participate in the formalization at the registry office.
Financing
If the immigrant does not have enough resources to buy the property in cash, he can resort to bank financing at a Portuguese institution.
“The part of the bank loan is bureaucratic, it is necessary to enter value, documentation that proves income and professional stability with a work contract and an income that is three times the value of the installment”, an agent explains. In addition, the customer needs to have a down payment for the purchase. The amount requested depends on each bank and varies between 20% and 30% of the total value of the property.
“Usually there is no big difference in the procedure, whether for immigrants or Portuguese. As the most bureaucratic is the loan, as long as [the person] meets the necessary requirements, it ends up being the same”, highlights Poliana. At the same time, the bank takes into account whether the client has other loans to approve or not the credit, the profession, the number of people in the family and whether it has guarantors, if necessary. By country rules, the monthly installment amount cannot exceed 1/3 of the buyer's net salary.
It is necessary to present some documents, such as the Tax Identification Number (NIF), copy of the identification document, last three paychecks with the salary, known in Portugal as "maturity", employment contract, income tax of the previous year (IRS). A bank statement for the last three or six months is also required. In some banks, a permanent Residence Authorization (AR) may be required for credit approval, but the rule varies by bank.
Financing can be requested for 20, 30 or even 40 years. Banco do Português updated, in April this year, the recommendation on the financing term according to the age group of the buyer. Those between 30 and 35 years old can get a maximum term of 37 years. Those under 30 can still finance the amount for up to 40 years. Finally, those over 35 can only apply for a loan with a term of 35 years. The numbers are usually revised annually.
The longer the financing period, the lower the installment amount, but the higher the interest rate to be paid. Portuguese banks work either with fixed monthly or annual rates, or by the Euribor (Euro Interbank Offered Rate), which is used as a reference in the euro zone, and can be calculated for three, six or 12 months.
The rate remained negative for six years, until last June, when it became positive. It currently stands at 0.162% for six months, the highest value since September 2014. Values vary depending on market conditions. With rising inflation in the eurozone, caused by the Russian invasion of Ukraine, the European Central Bank raised interest rates , influencing all credit conditions.
After the financing is approved, the next step is to carry out the deed of the property, which can be done in a notary's office. It is necessary to present the personal documents, NIF, use license (required for buildings built after 1951), energy certificate (issued by the Portuguese energy agency) and proof of payment of the Stamp Duty fee, which corresponds to 0.8% of the value of the acquired property, in addition to the Municipal Property Tax (IMI). This index varies depending on the location of the building and other technical factors.
insurance and fees
In Portugal, it is mandatory to have housing insurance, which covers damage caused by fire, for example. Residents can choose the insurance company with the most appropriate conditions and values for their financial situation. In addition, it is also necessary to pay an annual tax, which can be paid in one go or in installments. The collection is always made until April 30th and payment is mandatory, with a forecast of fines in case of delay. The value varies according to each property.
How much does a house cost in Portugal?
Several sites have online credit simulators , which can be good tools for analyzing the feasibility of buying a property in the country. According to the National Statistics Institute (INE), the average price per square meter in Portugal in the first quarter of this year was 1,454 euros. The value represents an increase of 17.2% compared to the same period in 2021, and 14.2% compared to the previous quarter.
According to INE, the price of real estate has increased in 22 of the 25 regions of the territory. The most expensive region is the Algarve, where the average value per square meter is 2,237 euros, followed by Lisbon, with an average cost of 1,986 euros. The institute also has a website that lists home prices by city
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