Buying Property in Madeira
All You Need to Know
The Real Estate Agency
Why choose a licensed agency
Always buy through a licensed agency where you are protected throughout the purchasing process by Portuguese law and not through your friendly taxi driver or private individual who knows a “relative or friend” who is selling a property or piece of land.
As an agency we have to pay a fee to renew our licence every year with a criminal record check of the owners and management before a renewal is issued.
For each property, be it a house, apartment, old building or land, we have to have on file all the registered documents and energy certificate, ID and tax numbers of the owners before we can advertise it for sale.
The Purchasing Process
A simulation of the purchasing costs is printed by the agency for the purchaser. This shows the amount due of the IMT (Municipal transfer tax) and the Imposto do Selo (Stamp duty) to be paid at the Notary on the signing of the “Escritura” (the deed). This simulation can be calculated on a budget that the client has to purchase a property so that they know the overall costs.
Once a decision to purchase has been made, a “Promissory Contract” is drawn up at the agency, where the details of the owner, purchaser and property are included, all under Portuguese Law. This means that the vendor (the owner) promises to sell the property to the purchaser and the purchaser promises to buy the property from the owner and the purchaser then pays a deposit (usually 10% of the purchase price) directly to the owner. In this contract a date between the two parties is agreed for the signing of the “Escritura” (the deed) at the Notary.
At the date for the signing of the “Escritura” at the Notary, the proof of payment of the IMT and Imposto do Selo at the Tax office (which is normally paid by the purchaser the day before) and all the up to date legal documents of the property, the ID and tax numbers for both the Vendor and purchaser are checked by the Notary and are included in the “Escritura” (the deed).
At this time the balance of the purchase price has to be paid either by a Portuguese Bank Cheque or approved bank transfer to the seller. The Notary’s fee and registration of the property fee is paid at the office of the Notary. These are around 300 euros each depending on the property.
At this point you are now the legal owner of the property!!