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The process of buying a property in the Algarve

The legal provisions related to Property law are found in the civil code. The civil code treats Portuguese nationals and foreigners equal as far as the law is concerned.

The sale of real estate located in Portugal is always governed by Portuguese law.

The form of ownership of property is always absolute ownership. This is like freehold ownership in other countries.

In the case of an apartment, the owner of the apartment owns only a percentage of the entire building or the entire plot the apartment building is on. Usually the percentage includes a share of the garden and or swimming pool, garages, etc.


The general procedure for buying a property in Portugal is like the purchase of a property in the United Kingdom or in other countries.

Agree a price for the property after having seen the property and sign a promissory contract of purchase and sale. All checks of the property papers will be performed by the estate agency, in combination with a lawyer.


The Promissory contract is an agreement that commits both parties. The seller agrees to sell the stated property at a certain price to a stated person on the terms set out in the contract. The buyer must buy.

The Promissory contract is a definitive document, and therefore it is important that the conditions contained in the promissory contract are acceptable to both parties’ subject to the transaction.

Under Portuguese law, signing the promissory contract is the first step to becoming the owner of a property. The following step would be the signing of the deed of sale (Escritura).

The Promissory Contract consists of the following:

  1. The names and addresses of the seller and buyer are stated in full as well as their representatives (if applicable).
  2. The location of the property should be fully described, both the reference as known in the land registry details, as well as a general wording.
  3. A date for the signing of the deed of sale (escritura) will be determined.
  4. Once the price is determined, a deposit is paid by the buyer of 10% or higher to the seller.
  5. The property is sold with all charges, taxes, debts and burdens paid through the date of signing the deed.
  6. The promissory contract will state who is responsible for what costs.
  7. It will also state what rights and obligations both parties have in case either is unable to fulfill their part of the contract.
  8. It will establish the law to cover the contract.
  9. Should a buyer require the services of a mortgage provider, and should the mortgage not be provided by the bank or other mortgage provider, a clause in the Promissory contract will allow the buyer to withdraw the Promissory Contract and reclaim the 10% deposit without penalty.

If the buyer or seller fails to honour the promissory contract or otherwise breaks it, various arrangements may be made. A deposit (sinal) is payable by the buyer. This is typically 10%, occasionally more. If the buyer fails to complete, he will lose the deposit. If the seller fails to complete he should return double the deposit paid.

If the parties fail to comply with their obligations there is the ultimate remedy of seeking a court order, but as in most countries, this should be a last resort as this can be a lengthy and costly procedure.


Power of attorney (Poder Geral na Procuração)

It may be inconvenient to visit Portugal to sign the deed in person. This can be resolved by having a representative take care of the signing. This can be a lawyer or other representative who acts as the power of attorney.


To own a property in Portugal you will need to obtain a NIF (Numero de Identificacao Fiscal) - tax identification number. This is obtained from any Portuguese Tax office (Financas). You will need to fill in a form and present your passport for verification.


The IMT (Transmissão Onerosa de Imóveis) property transfer tax must be paid before the deed is signed. A receipt for the payment is produced to the notary who witnesses the deed.

THE DEED OF SALE (Escritura)

This must be signed in front of a Portuguese notary either by the parties in person as someone holding power of attorney from them.


Certain procedures follow on from the signing of the deed of sale. The parties are identified by their passports or identity cards. This will normally be done, initially, by the notary´s clerk and then also by the notary.

The parties will then be ushered into the presence of the notary. In addition to the buyer and seller, the group could also comprise the notary´s clerk, your lawyer, a translator, a representative of your mortgage lender, the estate agent and any sub-agent appointed by the estate agent.

After the deed of sale has been signed, your title and any mortgage should be presented for registration at the land registry, by either the notary, the lawyer or the estate agent.