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Buying property in Portugal? One of the most important legal steps is signing the Deed of Purchase and Sale (Escritura Pública de Compra e Venda).
This final contract officially transfers ownership from the seller to the buyer and is signed in front of a notary.
Understanding how the deed works, what documents you need, and the role of the notary is crucial to avoid delays or legal issues.
In this guide, we’ll walk you through everything buyers must know before signing the deed in Portugal.
What is the Deed of Purchase and Sale?
In Portugal, a “deed of purchase anda sale” refers to a legally binding document that finalizes the sale of a property.
This document is known as an “Escritura Pública de Compra e Venda” is a public document and it is typically signs before a notary or a lawyer who is authorize to perform such transactions. Typically, it occurs on the date specific in the promissory contract.
Here are the key aspects of a deed of purchase in Portugal:
- Location;
- Parties Involved;
- Documentation;
- Reading of the Deed;
- Payment;
- Signatures;
- Registration.
1. Location
The certification notary public typically oversees this formal and legally binding event in a notary’s office, where it occurs.
In Portugal, legal professionals, known as notaries, specialize in real estate transactions.
They ensure the legality, accuracy, and fairness of the process. Notaries, impartial third parties, protect the interests of both the buyer and the seller.
And conduct due diligence on the property’s legal and fiscal status, review all documentation, and verify that the terms of the transaction comply with Portuguese law.
While the notary’s office is the most common venue for signing the deed, it’s not the only option. The buyer and seller can agree to hold the signing at the seller’s lawyer’s office or another mutually convenient location.
This flexibility accommodates special circumstances or preferences and requires agreement from all parties involved.
In some cases, a seller may choose to have their legal counsel present during the signing to ensure their interests are adequately represented.
Such arrangements are typically made well in advance of the signing to avoid last-minute complications.
2. Parties Involved
In a real estate transaction in Portugal, several key parties meticulously orchestrate the signing of the deed of purchase, each with specific roles and responsibilities.
The Buyer: The buyer is the individual or entity acquiring the property. This party is a central figure in the transaction, as they are making a significant financial commitment.
The Seller: On the other hand, the seller, whether an entity or an individual, relinquishes ownership of the property. They must prepare to provide a clear title to the property and fulfill any obligations specified in the sale agreement.
The Notary or Lawyer: The notary or lawyer, often referred to as the ‘notário’ or ‘advogado,’ plays a critical role in the process. They are impartial and responsible for overseeing the deed signing.
Power of Attorney: In some cases, if the buyer or seller cannot attend the deed signing in person, they can opt to grant power of attorney to a legal representative who can act on their behalf. It’s important to note that granting power of attorney involves specific legal documentation.
3. Property Documentation
In any real estate transaction, the completeness and accuracy of documentation are paramount. Ensuring that all necessary documents are in order is a foundational step in the property purchase process.
Here’s an extensive perspective on the significance of these documents:
Seller Documentation
Identification Card: Seller should be prepared to present valid identification. This can include a passport, a ID card or other.
NIF Number: “Número de Identificação Fiscal”, or fiscal identification number, is a fundamental requirement for any financial transaction in Portugal.
Property Registration Certificate: often referred to as the “Certidão Permanente,” is a vital document in the property buying process in Portugal.
Legal Description of the Property (“Caderneta Predial”): It serves as a detailed legal description of a property in Portugal, including essential information such as the property’s fiscal identification number (NIF), location, area, use classification, and any existing mortgages or charges.
Real Estate Property Documents
Permission to Use (“License of Use”): also known as the “Licença de Utilização,” is a document that certifies that a property complies with all necessary legal and safety requirements for occupancy.
Housing Technical Sheet: or “Ficha Técnica de Habitação,” is a document that provides detailed technical information about a property. It includes data such as the property’s construction features, materials used, and energy efficiency specifications.
Energy Performance Certificate: (Certificado Energético) is a document that evaluates a property’s energy efficiency and environmental impact. It assigns an energy efficiency rating to the property, ranging from A+ (most efficient) to F (least efficient).
Buyer Documentation
Identification Card: Buyers should prepares to present valid identification. This can include a passport, a European ID card, or a Cartão de Residência (residence card), depending on the individual’s immigration status.
NIF Number: The NIF, or fiscal identification number, is a fundamental requirement for any financial transaction in Portugal, including property purchases.
Banker’s Draft for Remaining Purchase Price: The remaining balance of the property purchase price should be provided in the form of a banker’s draft.
Receipt for Transfer Tax (IMT) and Stamp Duty (IS) Payment: The buyer should provide the remaining balance of the property purchase price in the form of a banker’s draft.
Payment for Notary Fees: Traditionally, these fees were paid by cheque, but it’s increasingly common to make payments via ‘multibanco’ (ATM) or card.
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4. Reading the Deed of Purchase and Sale
The notary or lawyer plays a key role in the deed signing process, ensuring both buyer and seller clearly understand the document’s content and implications.
Reading the Deed Aloud: The deed is read aloud in Portuguese, the official language of legal transactions, so all parties fully grasp its terms.
Language Assistance: Non-Portuguese speakers may rely on a bilingual lawyer, a buyer’s agent, or a professional translator to follow the process accurately.
Acknowledgment and Agreement: Finally, both parties must formally acknowledge and agree to the terms, confirming informed consent.
5. Signatures
The moment of signature during the deed signing process is both symbolic and legally significant. It represents the final act that formally binds the buyer and the seller to the terms of the transaction. Here’s an extend perspective on this crucial step:
Legal Formality: When all parties involve in the transaction, namely the buyer, the seller, and the notary or lawyer, reach a mutual understanding and agreement regarding the deed’s content, they proceed with the signing.
Notary or Lawyer’s Role: The presence of the notary or lawyer during the signing is paramount. Their role is to ensure that the signing process is carries out correctly and that all necessary legal formalities are observes.
Distribution of Copies: Following the signing, copies of the execute deed are provided to both the buyer and the seller. These copies are more than just records; they serve as essential proof of the transaction and ownership transfer.
Notary’s Official Record: The original deed, which bears the signatures of all parties, is retain by the notary or lawyer. This official record is securely store and register with the Land Registry and the Tax Authority to confirm the change in property ownership.
6. Payment
The signing of the deed in a property transaction represents a momentous occasion where the buyer is require to fulfill their financial commitment by paying the remaining purchase price for the property.
Paying the Remaining Purchase Price: The remaining purchase price signifies the outstanding balance owed by the buyer to the seller, in accordance with the terms and conditions outlined in the purchase agreement.
Exchange of Keys: Simultaneously with the payment of the remaining purchase price, the exchange of keys takes place. This represents the transfer of physical possession and access to the property from the seller to the buyer.
7. Registration of the Deed of Purchase and Sale
The registration of the deed is a pivotal step in the property purchase process, as it holds the key to officially transferring ownership from the seller to the buyer.
Responsibility of the Notary or Lawyer: Once the deed is sign, it becomes the responsibility of the notary or lawyer to ensure the deed is register.
Land Registry: The first destination for the register deed is the Land Registry. Here, the details of the property transaction are record in an official public database.
Tax Authority: Simultaneously, the register deed is submitted to the Tax Authority. This step is crucial for tax-relate matters.
Proof of Ownership Transfer: Registration is the definitive evidence of the property’s ownership transfer from the seller to the buyer.
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Frequently Asked Questions About the Deed of Purchase and Sale in Portugal
What is a Deed of Purchase and Sale in Portugal?
It is the final legal contract (Escritura Pública de Compra e Venda) that officially transfers property ownership from the seller to the buyer, signed before a notary.
Who prepares the Deed of Purchase and Sale in Portugal?
The deed is usually prepared by the notary or lawyer overseeing the transaction, based on information from the buyer, seller, and land registry.
Do I need a lawyer to sign the Deed of Purchase and Sale in Portugal?
While not legally required, hiring a lawyer is strongly recommended to review documents, explain terms, and protect your interests.
Can the Deed of Purchase and Sale be signed in English?
No, the deed must be signed in Portuguese. Non-Portuguese speakers should use a bilingual lawyer, buyer’s agent, or professional translator.
What documents are required to sign the Deed of Purchase and Sale?
Typically: ID/passport, Portuguese tax number (NIF), proof of funds, land registry certificate, and property tax certificate.
How much are notary fees for the Deed of Purchase and Sale in Portugal?
Notary fees usually range between €500 and €1,000, depending on the property value and complexity of the transaction.
Can I grant power of attorney to sign the Deed of Purchase and Sale?
Yes. If you cannot be present, you may authorize a lawyer or representative through a notarized power of attorney.
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