4 5

03 Final Deed

Completion of the development will take place on an agreed date after exchange,

normally between 12 and 24 months for off-plan developments. Unlike the UK practice

of buyers paying the purchase price balance upon building completion, you will be

asked to make stage payments throughout the construction process. The stage

payment amounts can vary depending on the individual developer and project.

Upon completion, a final deed shall be signed in the presence of a capable entity to legalise the deed. Both the seller and buyer are required to be present on that day.

Alternatively, both parties can be represented by their respective lawyer with a Power

of Attorney. If the property has been purchased with a mortgage financing, a bank representative will also be needed. Before the final deed signing, the transfer tax1 (IMT) must be paid, which normally can be done by the lawyer acting on behalf of the buyer.

Bear in mind, registering your new home at the National Land Registry Records is

the most important step of buying a property in Portugal, as ownership will only be

enforceable against third parties after this step has been completed.

EXCHANGE AND COMPLETION PROCESS

1 Refer to the acquisition cost section for more details

Acquisition costs are incurred at the point one purchases a property, in addition to the

purchase price.

Property Transfer Tax (IMT) - IMT is charged on transfers of the property and levied at different rates depending on

the value of the property, its use (e.g. a permant or second home, or a property to let),

and whether it is situated on the mainland of the country or the islands (e.g. Azores,

Madeira).

The calculation of IMT for the transfer of residential property rights is based on a

progressive rate, which varies from 1% to 8%, depending on the value of the property.

This means that the rate only applies to the amount of the purchase price that falls

within a particular band. It should be noted that a flat rate of 6% will be applied to properties with a value over a certain threshold. Specifically, for a property being used as a permanent residence, a flat rate of 6% will be applied if its value exceeds EUR574,323, while properties for non-permanent residency, i.e. if the property is used

for letting purposes or as a holiday home, the threshold value is EUR550,836.

Certain purchases are exempt from IMT. Each exemption may depend on certain

requirements and the below list should not be viewed as comprehensive. Consulting a

tax expert is advisable if an exemption is thought to be available.

Acquisition of properties for resale by Real Estate Trading companies;

Acquisition of properties intended for urban rehabilitation;

Acquisition of property or autonomous fraction of urban property intended to

install tourism complex to which has been attributed tourism utility;

Acquisition of real estate by Real Estate Investment Funds for Residential Letting;

Restructuring operations or cooperation arrangements;

Acquisition of buildings classified as of national/public/municipal interest;

Exemption or reduction of the IMT rate, regarding the acquisition of property that

constitute eligible investment under Investment Promotion Tax Regime (RFAI).

PURCHASE AGREED

LEGAL DUE DILIGENCE

EXCHANGE OF PRIMISSORY CONTRACTS

TRANSFER TAX PAID

SIGN & REGISTER THE DEED

ACQUISITION COSTS