The public deed represents the final step in the property purchase process, where the buyer makes the payment, and the seller hands over the keys. In this guide we tell you everything you need to know about the deed process.

What is the Deed of Purchase?

In Portugal, a “deed of purchase” 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 signed before a notary or a lawyer who is authorized to perform such transactions. Typically, it occurs on the date specified in the promissory contract.

Here are the key aspects of a deed of purchase in Portugal:

  1. Location;
  2. Parties Involved;
  3. Documentation;
  4. Reading of the Deed;
  5. Payment;
  6. Signatures;
  7. Registration.
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1. Location

This formal and legally binding event typically occurs in a notary’s office, where a certified notary public plays a central role in overseeing the proceedings.

Notaries in Portugal are legal professionals with a specific focus on real estate transactions. They ensure the legality, accuracy, and fairness of the process. Notaries are impartial third parties who protect the interests of both the buyer and the seller. They conduct due diligence on the property’s legal and fiscal status, review all documentation, and verify that the terms of the transaction are in compliance with Portuguese law.

However, it’s important to note that while the notary’s office is the most common venue for the signing of the deed, it is not the only option. The parties involved, meaning the buyer and the seller, can agree to hold the signing at the office of the seller’s lawyer or another location that both parties find mutually convenient. This flexibility is intended to accommodate special circumstances or preferences and is subject to agreement by all parties involved.

In some cases, a seller may opt to have their legal counsel present during the signing to ensure their interests are adequately represented. Such arrangements are typically established well in advance of the signing to avoid any last-minute complications.

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2. Parties Involved

In a real estate transaction in Portugal, the signing of the deed of purchase is a meticulously orchestrated process that involves several key parties, 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 buyer’s primary responsibility is to ensure they have the necessary funds or financing in place to fulfill their obligations under the deed.

The Seller: The seller, on the other hand, is the entity or individual relinquishing ownership of the property. They must be prepared to provide a clear title to the property and fulfill any obligations specified in the sale agreement. Their primary role is to transfer the property to the buyer in accordance with the agreed-upon terms.

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. Lawyers may also be involved in the process, particularly when representing the seller’s interests or handling specific legal aspects of the transaction.

Power of Attorney: In some cases, the buyer or the seller may not be able to attend the deed signing in person. In such situations, they have the option to grant power of attorney to a legal representative who can act on their behalf. This representative, who may be a lawyer or another trusted individual, has the authority to sign the deed and fulfill the necessary obligations on behalf of the absent party. It’s important to note that granting power of attorney involves specific legal documentation.

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3. 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 extended perspective on the significance of these documents:

Seller’s Legal Documents

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. It serves as an official record of the property’s legal status, ownership history, and any encumbrances or restrictions that may apply. 

Legal Description of the Property (“Caderneta Predial”): it is a detailed legal description of a property in Portugal. It includes essential information such as the property’s fiscal identification number (NIF), location, area, use classification, and any existing mortgages or charges. This document is essential for tax purposes and serves as a reference for property assessment. 

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. It is typically issued by local municipal authorities. This document is crucial for confirming that the property is habitable and can be used for its intended purpose. 

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. This sheet is vital for understanding the quality and technical aspects of a property, making it essential for both buyers and sellers. 

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). This certificate helps potential buyers and tenants understand the energy consumption and sustainability of a property. It also offers recommendations for energy improvements. 

Buyer’s Legal Documents

Identification Card: Buyers should be prepared 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. This draft serves as a secure and verified payment method, assuring the seller of the buyer’s ability to fulfill their financial obligations. 

Receipt for Transfer Tax (IMT) and Stamp Duty (IS) Payment: Prior to the deed signing, buyers are required to pay property transfer tax (IMT) and stamp duty (IS). To verify payment, you should be prepared to present the ‘Guia’ (payment form) and ‘Talão de Pagamentos’ (payment receipt) for both of these taxes. 

Payment for Notary Fees: Traditionally, these fees were paid by cheque, but it’s increasingly common to make payments via ‘multibanco’ (ATM) or card. The buyer should be prepared to cover these fees, which can vary depending on the complexity and value of the transaction.

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4. Reading the Deed

The role of the notary or lawyer in the deed signing process is multifaceted, and one of their pivotal responsibilities is to facilitate a clear and thorough understanding of the deed’s content and implications for both the buyer and the seller.

Reading the Deed Aloud: The act of reading the entire deed aloud serves a crucial purpose. It ensures that all parties involved have a comprehensive understanding of the document’s terms and conditions. The notary or lawyer is usually fluent in Portuguese, which is the language of legal transactions in Portugal. This means that the deed is typically written in Portuguese, and the signing meeting itself will also take place in this language.

Language Assistance: Understanding a legal document written in a language one is not proficient in can be challenging. To address this, there are a few options available to non-Portuguese-speaking individuals. First, the buyer can engage a lawyer or a buyer’s agent who is proficient in both Portuguese and the buyer’s native language. This professional can provide real-time translation during the signing, ensuring that the buyer comprehends the content of the deed. Alternatively, the buyer can hire a separate professional translator to assist during the signing. 

Acknowledgment and Agreement: Importantly, both the buyer and the seller must actively acknowledge and agree to the terms and conditions of the deed. This acknowledgment is not merely a formality; it signifies the informed consent of all parties involved. It’s essential that both parties have a clear understanding of what they are agreeing to, as the deed represents a legally binding contract that outlines their respective obligations.

meeting or deed of purchase

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 extended perspective on this crucial step:

Legal Formality: When all parties involved in the transaction, namely the buyer, the seller, and the notary or lawyer, reach a mutual understanding and agreement regarding the deed’s content, the signing takes place. This signing, which often involves placing one’s signature on each page of the deed, is a formal declaration of intent. 

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 carried out correctly and that all necessary legal formalities are observed. The notary or lawyer acts as an impartial witness to the transaction, assuring the legality and authenticity of the deed.

Distribution of Copies: Following the signing, copies of the executed 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. The buyer receives a copy as evidence of their new property ownership, while the seller retains one as a record of the sale. 

Notary’s Official Record: The original deed, which bears the signatures of all parties, is retained by the notary or lawyer. This official record is securely stored and registered with the Land Registry and the Tax Authority to confirm the change in property ownership. 

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6. Payment

The signing of the deed in a property transaction represents a momentous occasion where the buyer is required 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. This amount encompasses the agreed-upon purchase price minus any initial deposits or prepayments made throughout the transaction. Being well-prepared to make this payment is vital, and buyers should ensure that the necessary funds are readily available.

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. It is a symbolic moment signifying the buyer’s acquisition of the property. The keys are handed over to the buyer, marking the commencement of their ownership and the beginning of their occupancy of the property.

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7. Registration

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 signed, it becomes the responsibility of the notary or lawyer to ensure the deed is registered. This involves a meticulous and legally mandated process that solidifies the change of property ownership. 

Land Registry: The first destination for the registered deed is the Land Registry. Here, the details of the property transaction are recorded in an official public database. This record serves as a legally recognized reference point and provides transparency regarding property ownership. 

Tax Authority: Simultaneously, the registered deed is submitted to the Tax Authority. This step is crucial for tax-related matters. The Tax Authority reviews the transaction and ensures that any applicable property transfer taxes or duties are settled in accordance with the law. 

Proof of Ownership Transfer: Registration is the definitive evidence of the property’s ownership transfer from the seller to the buyer. It provides legal certainty, assuring both parties that the transaction is complete and that the buyer is now the rightful owner of the property.

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Frequently asked questions about Sigining a Deed of Purchase in Portugal

What is a deed of purchase in Portugal?

A deed of purchase, also known as a “Escritura,” is a legally binding document that formalizes the transfer of ownership from the seller to the buyer in a property transaction in Portugal.

Where does the signing of the deed typically take place?

he signing of the deed usually takes place in a notary’s office, but it can also happen at the office of the seller’s lawyer or another location agreed upon by both parties.

Who are the main parties involved in the deed of purchase?

The main parties involved are the buyer and the seller of the property. Both parties, along with the notary or lawyer, are usually present during the signing. If the parties cannot attend in person, they can grant power of attorney to their legal representatives.

What happens during the signing of the deed?

The notary or lawyer reads the entire deed aloud to the parties involved to ensure they understand its content and implications. Both the buyer and the seller must acknowledge and agree to the terms of the deed.

What financial aspects are involved at the signing of the deed?

At the signing of the deed, the buyer is expected to pay the remaining purchase price for the property, as well as associated notary fees, property transfer taxes, and stamp duty. Payment is often made through certified checks or bank transfers.

What documents does the buyer need to deliver at the signing of the deed?

The documents needed from the buyers for signing a deed of purchase are:

  • NIF Number (Número de Identificação Fiscal);
  • Personal Identification (ID Card, Passport);
  • Banker’s Draft for Remaining Purchase Price;
  • Receipt for Transfer Tax (IMT) and Stamp Duty (IS) Payment;
  • Payment for Notary Fees.

Do I need legal representation when signing a deed in Portugal?

While legal representation is not mandatory, it is highly advisable to have a notary or lawyer oversee the process to ensure legal compliance and protect your interests.