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Buying costs property Madeira

 Buying costs property Madeira

When buying a property in Portugal, you have to pay tax and other expenses to complete the purchase.

overview purchase costs

  • IMT – “Imposto Municipal sobre Transmissões”  = Municipal Property Transfer Tax
    IMT is payable on the transfer of immovable assets located in Portugal, like the purchase of a property. IMT is payable at the tax department before the property transfer. The buyer or his lawyer (when having the power of attorney to purchase) is liable to correctly pay the IMT before the final deed. The IMT rates varies with the nature and value of the property; if you want to know more about how the IMT is exactly calculated, read the full article on IMT. This tax is not applicable to off-shore owned properties.
  • Stamp Duty – Imposto de Selo
    The “Imposto de Selo” (Stamp Duty) is 0,8% from the purchase price. When buying with a mortgage another 0,8% has to be paid over the value of the mortgage.
  • Lawyer’s fee
    Most lawyers will charge between 1% and 1,5% (+ VAT) on the purchase price. They will carry out all the necessary searches and prepare the documentation needed for both the promissory contract for purchase and sale as the Final Deed.
  • Notary and registration fees
    These will have to be paid by the purchaser after signing the final deed of conveyance, costs are around
    € 950. When buying with a mortgage or requesting extra services from the notary these costs will go up.
  • Agency’s fee
    The seller pays the agency involved.

The total costs associated with the purchase of a property  are from 6% up to 10%, depending on the value of the purchase price:

  • 1% to 1,5% lawyers
  • 1% to 3% notary, registration and stamp duty.
  • 0% to 8% (IMT) – property purchase tax.
 

Annual costs

If you own property in Portugal you have a council tax to pay each year.

IMI – Imposto Municipal sobre Imóveis  = council tax on Properties
This tax is paid to the “Câmra Municipal” (Town Hall) of the area where the property is located and the rate is calculated based on a percentage of the fiscal value of the property. This value may not coincide with the current market value as this register in the past was only updated when a public deed had taken place but currently Portugal is re-evaluating the properties fiscal value to have this value more in line with the actual market value.

 

Please note: This information is for guidance only and we cannot accept responsibility for any mistakes or misinformation. We strongly recommend Legal and Fiscal Consultations at all times prior to any transaction as the laws are constantly changing.

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