The aftermath of Britain’s vote to leave the European Union saw the value of the pound plunging, sending the pound to its lowest level against the euro in six years. Now might be a good moment to sell your overseas property and reap the rewards of a poor currency rate and rising Portuguese property values following the global financial crisis.
In this guide, we will provide you specific instructions for selling a home in Portugal.
Getting Ready to Pitch
It is important to first check and make sure that all property taxes are paid in full and up to date. If you fail to meet these commitments, your assets may be liquidated at public auction to settle the debt. The property will be sold to the highest bidder, which may be far less than its actual value.
You should also settle any outstanding utility bills before selling, including those for gas, water, and electricity.
Private Party or Real Estate Broker
Selling a Portuguese home begins with deciding whether to go it alone or hire an Agente Imobiliaroas (estate agent).
Private sales often net the highest prices, but they may be time-consuming and stressful for sellers since they put all the responsibility on themselves.
If you hire an estate agency, they will handle most of the legwork associated with selling your home, such as advertising and setting up Marcaçes e Visitas (property viewings), and they may also have access to a huge pool of potential buyers. However, estate agents often need a commission of 4-to-10% of the sale price to be paid.
You can also avoid signing an exclusivity agreement with an estate agency and promote the property either on your own or with their help.
Pricing in the Market
If you want to sell your home quickly and for a decent price, you need do some serious market research. While you want to get the most money out of the sale, you also don’t want to have your house sit on the market for too long.
Til (population density), Distrito (administrative division), Concelho (urban municipality), and Freguesia (parish) all have a role in setting prices in Portugal, as do the availability and quality of local amenities.
If you’ve hired an estate agency, they’ll probably handle the Avaliaço Imóveis (property assessment) for you. If you’re selling privately, though, you’ll need to hire both an Avaliador (evaluation agent) and a Vistoriador (visitor’s agent) (surveyor).
Boost Your Sales Success Rate
Amidst the dozens, if not hundreds, of other properties on the market, yours has to be highlighted in order to sell.
You should show potential buyers lots of professional-grade photographs of your home, since they will highlight its finest features and give them a good feel for its layout. Having a professional take pictures of your home is a must if you want to get the most money out of it.
Before showing your home, remove any unnecessary items and store most of your personal images out of sight. Having pictures of the previous owner’s family on display might make it harder for potential buyers to imagine themselves living in the house.
Formal Documentation
To sell a home in Portugal, you must, as in almost every other nation, gather a mountain of papers. Please find a list of necessary paperwork below:
The Caderneta Predial (Tax Registration Document) provides information on the property’s tax status, including its current owner, address, and tax identification number.
Certido de Teor (Document from the Land Registry) – This document verifies your ownership of the property and details any liens, mortgages, or other encumbrances on the land.
Any building constructed after 1951 must have a Licença de Habitabilidade (Habitation License), which is essentially proof that the building has been examined and is fit for human habitation.
You would have signed an Escritura (Deed) when you made the transaction.
Technical facts regarding the home, such as who built it and what kind of materials were used, are documented in the Ficha Técnica do Habitaço (House Technical Report).
You may get property plans (planos de propriedade) from the city hall; just have your attorney look them over to make sure there are no inconsistencies.
A Tax Identification Number, or Nmero de Identificaço Fiscal, may be obtained from the relevant tax authority and serves as a means of establishing your identity in the tax system.
Since 2009, it has been mandatory to present a Certificaço Energética Avaliaço (Energy Rating Certificate) when selling real estate in Portugal.
The services of an Advogado Propriedade (property solicitor) can be invaluable in ensuring that all legal requirements are satisfied and all necessary documentation is filed. If you are unable to be present for the course of the transaction, your lawyer can draught a Procuraço Publica (power of attorney) document that can be signed and recorded in the notary office.
Obtaining a Proposal
If you receive a fair offer for your home, you and the buyer will need to sign a promissory contract of purchase and sale (Contrato de Promessa de Compra e Venda) that lays out the terms of the sale, including a deadline for the final contract to be signed and the consequences for either party’s failure to do so.
Typically, a buyer will be required to put down a 10% deposit on the property’s worth, which will be lost if the buyer backs out of the deal. If the seller backs out of the deal or doesn’t follow the conditions of the contract, they’ll lose double the deposit.
Finishing the Deal
On the day specified in the promissory contract you signed earlier, you and the buyer’s legal representatives will meet at a notário pblico (public notary) to officially finalise the transaction by signing the public deed.
If you cannot be there to sign the documents, your attorney will need power of attorney to sign on your behalf and close the deal.
After verifying the payment of property transfer tax and the accuracy of the information included in the Contrato de Compra e Venda, the deed will be read aloud to the parties and signed.
The notary’s office will keep the original documents and bind them into official records, while the parties involved will get copies. In the meantime, the public notary will take care of getting the title deed recorded in the buyer’s name at the local Conservatória do Registo Predial (land registry office).
Taxes
Naturally, the proceeds from the sale of your property will be taxable, and you will be required to pay capital gains tax on any profit you made from the time you first purchased the property, with a 50% exemption for Portuguese tax residents.
The sale earnings are exempt from taxes if they are used to purchase another residence in Portugal or another EU member state within 24 months before the sale or 36 months after the sale.
How to Get the Best Exchange Rate
Once the sale of your Portuguese property has closed, you may want to send the money back to the UK. Depending on the method you use, you might save a significant amount of money.
When moving money internationally, you can use either your bank or a currency broker. At first look, dealing with your bank may seem like the simplest option; but, you may discover that working with a currency broker is more practical and economical.
When exchanging currency, most banks will charge a fee, however certain currency brokers may not. Brokers also provide access to a wider variety of specialised services, such as the option to lock in an exchange rate for up to two years in advance of a transfer, as well as more competitive exchange rates. This method of fixing the rate is especially helpful when buying or selling a property in a foreign country since it ensures you receive the return you anticipate and prevents you from losing money due to fluctuations in the exchange rate.
Your sale of Portuguese real estate might net you thousands more in British pounds by taking advantage of a favourable exchange rate and avoiding high transfer costs.
Find out more about your currency transfer choices if you plan on selling your Portuguese home soon.
A detailed plan for selling your home in Portugal is now at your fingertips. Keep these things in mind if you’re thinking about selling your home in Portugal soon.
