Skip to main content

WHAT ACTS OF DUE DILIGENCE ARE GENERALLY CONDUCTED WHEN BUYING A PROPERTY?

Due diligence is the act of an investigation of a business or person prior to signing a contract. When buying a property there are minimum checks that you must do.

Real estate registry
The registry has a record of property ownership, with a complete description of each property on a material, economic and fiscal level, being able any citizen to require information regarding an enrolled building in the Registry. Thus, to analyze the “history” of the property, it is necessary to require the emission, of a document certificate of the full record of the title and dealings regarding the property.

For that purpose the registration record number or the property's full address is required. Mainly the register is consulted to check whether:
- the property is registered in the name of the person or company claiming to be the owner;
- there are any liens;
- any seizure as been registered.

The land registry is where you can obtain copies of land registry certificates.

Tax office 
It is also common to seek information on the tax office of the property's area, to check if it is registered and if so, to obtain the following information:
- the property registration number;
- the estate value;
- to know if any rental contract has been declared (although there is a possibility that the owner did not submit a copy to the local tax office).

The properties are enrolled in accordance with a number. These numbers, assignment of articles, are called "matriciais". The document that demonstrates the fiscal situation of the property is named "Caderneta Predial". In Portugal the property is either rustic, urban, or mixed (rustic and urban).

Check whether the details on the "caderneta predial" are consistent with the land registry certificate - a final deed can not be signed without it.

City Council
It is also possible to go to the City Council in order to check if the property is licensed (housing, commerce or other) or if development is planned or what type of land are surround by and the likely level of building to take place in future.

Unit-holders Association 
If it is a flat you are about to buy, the following information could be obtained from the unit-holders association:
- the management and service cost;
- if there are any outstanding payments;
- the unit-holders association's regulations.
You will have to pay community fees for the maintenance of communal areas. The charges are calculted on the basis of each owner's share.
It is also wise to obtain the rules of the condominium.

POPULAR

WHAT IS THE PORTUGUESE NON-HABITUAL TAX RESIDENCE REGIME?

The non-habitual tax resident regime is a more favourable tax status, applicable to foreigners who became residents for tax purposes in Portugal.

Among the tax advantages associated with this regime is the possibility of a more favourable tax rate of income from work (20%) and exemption, under certain conditions, from paying in Portugal taxes related of income from abroad (e.g. pensions). In the latter case, however, most of the income from capital gains and some capital income are excluded from the exemption.

These advantages are granted for a period of 10 years, non-renewable, and benefit only citizens who have professions considered by the law as having added value, such as the professions associated with cultural activities, engineering, medicine, new technologies and management.

In order to benefit from this regime, it is necessary to reside in Portugal 183 days a year, to have a tax residence here and to register as such until March 31 of the following year.

This regime was crea…

I FOUND THAT THE PROPERTY I PURCHASED HAS DEFECTS, WHAT CAN I DO NOW?

Every consumer purchase is covered by a mandatory legal guarantee. As long as you are a consumer, no seller can claim otherwise.

Legally, the property must not suffer from any defect which has a negative impact on its value or which renders its regular use impossible. If these warranties are breached, the consumer can choose between repair, replacement, refund or a price reduction. However, the buyer must notify the seller of defects within one year of their discovery.

If the property is newly built, the purchaser will also benefit from a five-year warranty period. According to Art. 1225 of the Civil Code, the seller is liable for damages in respect of certain defects during five years, if he has also constructed, repaired or modified the building.

THE ART OF MAKING CONCESSIONS

A negotiation is a little drama, and each concession is a sacrifice made for the sake of the own negotiation. When was the last time you went to a street market? It is an excellent place to learn how to negotiate. See how the towels seller cries about the possibility of his own personal bankruptcy whenever he makes you a little discount. Have you small children? If so, you have already realised that you have little chances of winning any negotiation process. I usually do not. Children are better negotiators than anyone else. They don't hesitate to use whatever it takes to make us give up our position. A tantrum in the supermarket is a legitimate weapon. How can we be as much effective as children?

Try to devalue the concessions of your interlocutor and value yours as much as you can. This way it is possible that the other party will eventually make more concessions than those initially intended.  Don´t mention or make any comment on it, as if the other party´s concessions were so…

BANK VALUATION OF HOUSES CONTINUES TO RISE

The price of the square meter in the country was valued at 1,141 euros, the highest value since May 2011.

The banking valuation of houses has increased for seven consecutive months. The price at which banks evaluate households when granting housing loans doesn't stop rising. The trend of this indicator accompanies the upward trend in house prices in Portugal.

According to the official data, the average value of the bank evaluation of the homes in October was 1,141 euros per square meter. This figure corresponds to an increase of six euros compared to the value registered in the previous month and is also the highest level since May 2011.