SIGNING FOR YOUR QUALIFYING GOLDEN RESIDENCE
PERMIT INVESTMENT PROPERTY
The process of buying property in Portugal to secure a Golden Residence Permit need not be a daunting task as the legal procedures are both simple and secure.
Overseas investors are generally surprised at how simple and fluid the process can be, with dual language contracts and lawyers who speak English.
Unlike many other countries the process of buying property is not buried in bureaucracy. In January 2009 the Portuguese government embarked on a reform programme to simplify the affairs of state.
The resulting initiatives have further been streamlined of late in order to properly accommodate the requirements of the Golden Residence Permit programme too.
The government has implemented reforms referred to as SIMPLEX, an ongoing programme designed to cut the bureaucracy, modernise the public services and lower the administrative burden on companies and citizens.
Various reforms are already implemented, such as the Law n°116-2008 by which Notaries (Notários), Lawyers (Advogados), Solicitors (Solicitadores), Chambers of Commerce and Industry (Câmaras de Comercio e Indústria) and Registry Offices (Serviços de Registo) now have the authority to deal with, authentications, check and control the legality of the acts and contracts of any real estate or mortgage transaction.
In practical terms SIMPLEX has made the process of property registration transparent, safe and secure meaning that the entire process of purchase and sale can be completed in a single day from purchase contract to title deed.
The process of purchasing a property in Portugal may vary but in general terms these are the steps that will be followed by your Portuguese lawyer.
Offer & Reservation (O&R)
Having selected the property the buyer seeking approval for a Golden Resident Permit will present an offer to the real estate agent who will mediate the negotiations with the seller.
The negotiations may be verbal or reduced to writing in the form of an offer and reservation (O&R), to secure the selling price and reserve the property while the contract of purchase and sale is prepared (CPCV).
The O&R is normally secured by the buyer with a non refundable reservation fee agreed with the seller and signed by both parties.
Contracto Promessa de Compra e Venda (CPCV) (contract of purchase & sale)
The terms agreed to in the negotiations are reduced to writing in the Contracto Promessa de Compra e Venda (CPCV), which both parties sign. The buyer is normally represented by his legal representative (lawyer) whom he has appointed to act on his behalf.
The CPCV is a private contract between buyer and seller which may be dispensed with should the parties be in a position to proceed immediately to deeds.
Unless otherwise agreed between the contracting parties the buyer will normally make a deposit payment with the signing of the contract (20% – 30%), the outstanding balance to be paid with the completion of the deed.
The buyer’s interests are protected in the general law and more specifically in Article 830 of the civil code which defines the rights and obligations of both parties.
Should the seller default on his obligations, the buyer is entitled to a refund of double the deposit and if the buyer defaults on his obligations he will forfeit the deposit.
The CPCV prepared by the contracting parties will generally include the following:
- Details of Buyer & Seller
- Property details
- Purchase price
- Payment Terms
- Deposit (20% – 30%)
- Completion date
- Hand over
- Title Transfer (Escritura)
- Signed by both contracting parties.
The process should be accompanied by a local lawyer who will then begin the conveyance process in preparation for the Title deed (escritura).
The buyer need not be present in Portugal to complete this process it can be done by proxy (Power of Attorney) appointing the lawyer as the buyer’s legal representative who will attend to the legal and administrative process.
Certifications and Documents
The conveyance process includes a numbers of certifications and registrations which will be conducted by the lawyer on the buyer’s behalf:
Certidão de Registo (CR) (registry certificate)
Properties in Portugal have a unique registry certificate (CR) which details the properties entire legal history from its initial registration documenting ownership, licensing and registrations.
The CR includes current ownership details, legal description of the property and any liens or encumbrances.
The CR is a document of public record which can be accessed electronically or at the local land registry office. Electronic CR certificates are allocated a unique access code which is supplied by the seller.
The CR is constantly being updated and will be access at the deed prior to the transfer of ownership by the notary or registrar
Caderneta Predial (CP) (property docket)
This is a unique docket for Municipal tax purposes, often referred to in many countries as the municipal or council valuation. This docket is registered with the tax authority and defines the municipal valuation of the property, classification and tax matrix applicable to calculate the local property taxes (IMI).
Electronic CP certificates are allocated a unique access code which is supplied by the seller.
Licença de Habitabilidade (LH) (habitation license)
Buildings for habitation and commerce must have Habitation License (LH) for the transfer of ownership to proceed.
The LH confirms that the buildings is certified for the purposes for which it was intended, including complied with all building regulations and certifications. The habitation license is issued exclusively by the local municipal council and supplied by the seller.
Ficha Tecnica (FT) (technical file)
The Ficha Tecnica is a technical file which has been deposited at the local council for licensing purposes. The seller is also required to hand over a certified copy of the FT at the act of transfer of ownership.
The FT includes effectively the life story of your property, including:
- Architectural plans
- Technical Plans (water, gas, electricity, communication etc.)
- Building licenses
- Property registries
- Technical specifications
- Certifications by the various engineers
- Contacts of the various contractors
- Energy certification
- Habitation License
Numero Identificação Fiscal (NIF) (tax number)
The buyer’s lawyer will register his client with the Portuguese tax authority and in the case of non residents living outside of the European Union a tax representative, normally an accountant is appointed to submit the annual tax returns. The NIF is required for the completion of the deed.
Escritura (title deed)
When the conditions of the CPCV have been complied with and both parties are in a position to complete the deed they will mutually agree on a date for the deed.
Thanks to the new SIMPLEX programme, it is no longer necessary to exclusively conduct the deed in the presence of a Notary, a simpler procedure may be completed at the land registry or at a certified professional. “Casa Pronta” is an electronic service that will simultaneously attend to payment of transfer taxes and complete the transfer and registration of title.
The registrar will preside over the act as an independent witness certifying that all the legal conditions of purchase and sale are met.
The registrar will check the authenticity of documentation, certify the ownership status of the seller and property, confirm that taxes have been paid and that the final payment has been made by the buyer.
With all conditions met the registrar will proceed with the transfer of ownership and registration of title. The buyer is not required to be present at the deed as this process can be completed by his legal representative.
The formality of the process is conducted exclusively in Portuguese therefore if the buyer wishes to represent himself at the deed, the registrar will require that an independent translator be present.
Documents Required at the Deed
The documents necessary for celebrating the Escritura are:
- Identification documents of the contracting parties and their representatives
- Tax numbers (NIF) of the contracting parties
- Certidão de Registo (CR) (registry certificate)
- Caderneta Predial (CP) (property docket)
- Licença de Habitabilidade (LH) (habitation license)
- Ficha Tecnica (FT) (technical file)
- Certificado Energetico (Energy certificate)
Proof of payment of transfer taxes and revenue stamps
The registrar will simultaneously attend to the registration of the title deed at the land registry (Conservatoria do Registo Predial) and the tax authority (Repartição de Finanças).
The buyer can subsequently request certified copies of the title deed (escritura) electronically at his convenience.
And, finally, the application for the Golden Residence Permit can be submitted!
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