Buying in the western Algarve

The initial stage in property purchase in Portugal involves the Preliminary or Promissory Contract (Contrato Promessa de Compra e Venda), a legally binding contract between vendors and buyers signed before a public notary.

On signing, the buyer normally pays a 10% non-refundable deposit. In general, this contract outlines the buyer’s and vendor’s details, gives a description of the property, states the terms of payment and completion, and confirms that there is clear title. Both parties are advised to have local legal representation.

Upon completion, the Final Deed (Escritura) is signed before the public notary, who is charged with checking all documentation is present and that that the IMT (property transfer tax) has been paid. Completion normally implies the full payment of the purchase price. Occasionally, when both parties agree, a percentage of the purchase price may be withheld from the vendor until given aspects of the deal are met. This could be the resolution of items of a snagging list, for example. The buyer’s lawyer normally retains the withheld sum until all everything has been resolved.

With the deeds exchanged and all outstanding issues resolved, the buyer’s lawyer then registers the new owner of the property at the Land Registry (Registo Predial).