Source: Adobe Stock Author: Redaction The deed is an essential step in the process of buying and selling a house in Portugal, as it is the legal document that formalizes the transaction. The cost can vary depending on several factors, such as the value of the property, the location, and associated services. Main Costs: Municipal Property Transfer Tax (IMT): This is one of the largest costs associated with buying a house. The amount to be paid depends on the sale price of the property and its purpose (primary residence or secondary). IMT can range from 0% to 8%, depending on the propertys value. Stamp Duty: In addition to IMT, there is also Stamp Duty, which represents 0.8% of the sale price of the house. This tax is mandatory for all real estate transactions. Notarial and Registration Costs: The deed must be executed before a notary or a property registry office. The cost of notarial services can range from 300 to 700 euros, depending on the complexity of the transaction and the chosen entity. Bank Fees (if applicable): If the purchase is financed through a mortgage, there may be additional costs, such as the process opening fee and the loan formalization fee, which can vary from bank to bank. Example: For a house worth 200,000 euros, purchased as a primary residence, the buyer may incur the following additional costs: IMT: approximately 4,500 euros Stamp Duty: 1,600 euros Notarial and registration costs: between 300 and 700 euros. Thus, the total cost for the deed and other charges may exceed 6,000 euros. The costs of the deed for a house in Portugal involve a range of taxes and fees that should be considered in the overall budget of the purchase. To ensure that all expenses are accounted for, it is advisable to consult a lawyer or a solicitor specializing in real estate law, or even a mortgage intermediary, to avoid surprises during the transaction.
Source: Adobe Stock Author: Redaction Buying a house is one of the biggest investments most people make in their lifetime. For many, securing a mortgage is key to realizing the dream of owning a home. However, the process can seem complicated and intimidating. To help, we’ve outlined four essential steps to ensure you get the mortgage you need. Assess Your Financial Situation Before you start house hunting, it’s crucial to conduct a thorough review of your financial situation. This includes analyzing your income, expenses, and savings. The goal is to determine how much you can afford for a down payment and what monthly payments you can sustain. Use online mortgage calculators to estimate the amount you might be able to borrow based on your financial profile. Check Your Credit Banks and financial institutions will review your credit history when considering your mortgage application. It’s important to check your credit report in advance and ensure there are no errors or outstanding issues. If needed, pay off debts or resolve issues that could negatively affect your credit score. A strong credit history can increase your chances of securing better loan terms. Compare Offers from Different Institutions Don’t settle for the first mortgage offer you receive. Compare proposals from different banks and financial institutions. In addition to the interest rate, consider factors such as the loan term, fees, and additional costs. Request loan estimates to see which institution offers the best terms for your profile. A careful comparison can lead to significant savings over time. Prepare the Necessary Documentation Each financial institution may have slightly different requirements, but generally, you’ll need to provide a range of documents for credit analysis. These may include proof of income (such as pay slips or tax returns), identification documents, proof of savings, and information about the property you wish to buy. Ensure all your documentation is organized and ready to avoid delays in the process. Following these four steps can simplify the mortgage application process and make buying a home smoother and more efficient. With proper preparation and careful analysis, you’ll be better positioned to secure the ideal financing and achieve the dream of homeownership.
Source: Adobe Stock Author: Redaction In recent years, the desertification of the interior and the growing demand for a better quality of life have led many people to consider moving to less populated regions of the country. To encourage this transition, the Government has created a series of tax benefits that make the interior an even more attractive option, especially for families, young people, and businesses. If you are considering moving to the interior, discover the main tax advantages that can significantly reduce your costs and improve your lifestyle. Reduced IRS for workers and retirees One of the main tax incentives for those moving to the interior is the reduction in IRS (Personal Income Tax). For workers who choose to live and work in the interior, the Government offers an increase in the IRS deduction for three years, with a maximum limit of 1,000 euros per year . This measure applies to employees and self-employed workers who change their tax residence to one of the regions defined as interior. IMI exemption for own and permanent housing Another relevant tax benefit for those moving to the interior is the IMI (Municipal Property Tax) exemption. In many interior municipalities, it is possible to benefit from an IMI exemption for up to three years for own and permanent housing, which can be extended in some cases. This measure represents significant savings for families who buy homes in less densely populated areas. Additionally, some municipalities have the freedom to apply further IMI reductions, particularly for large families or young people, as a way to attract more residents. This flexibility allows buyers to find unique savings opportunities, depending on the propertys location. Urban rehabilitation support with reduced VAT For those looking to invest in the renovation of properties in the interior, the Government offers significant tax benefits, including a reduction in VAT to 6% on urban rehabilitation works . This incentive applies to interventions aimed at the recovery of old buildings, preserving the architectural and cultural identity of the regions. These rehabilitation supports not only promote urban regeneration but also allow new residents to invest in properties at more affordable prices, transforming them into own housing or into local accommodation and rural tourism projects. Investment in rehabilitation is thus doubly advantageous, both for the reduced cost of works and for the potential appreciation of the property. Tax Incentives for businesses and startups in the interior Companies and startups that decide to establish themselves in the interior of Portugal can also benefit from a range of tax incentives. Newly created companies can enjoy reduced Corporate Income Tax rates and additional deductions on investments made in low-density areas. These advantages are particularly attractive to entrepreneurs and young business owners who wish to start their activity in less competitive areas with lower operating costs. Furthermore, the “Emprego Interior MAIS” program offers financial support for those accepting jobs in the interior, covering travel and installation expenses. This incentive, combined with tax reductions, makes the interior a promising choice for those looking to develop their career or business outside major urban centers. Why move to the interior? Tax benefits are just one part of the advantages of moving to the interior of Portugal. Regions such as Trás-os-Montes, Alentejo, and Beiras offer a high quality of life , with lower housing costs, less traffic, and closer contact with nature . Safety and tranquility are other strengths, ideal for families seeking a healthy environment to grow . The tax incentives for those moving to the interior aim to revitalize these areas, attract young populations, boost the local economy , and create a balance between the coast and the interior of the country . For real estate consultants, these measures represent an excellent opportunity to present new housing options to clients, promoting the financial and quality of life advantages that the interior has to offer. If you are considering a move, find out about the tax benefits available in the region you are interested in and take the opportunity to live in a quieter, more economical, and opportunity-filled Portugal. If you are looking for a house in the interior of the country, check out the SUPERCASA portal. If you are a consultant and have properties for sale in the interior, click here to promote your properties on SUPERCASA.
Source: Adobe Stock Author: Redaction The government has recently launched a set of support measures that promise to ease the tax burden on young people buying their first home, focusing on exemptions from IMI (Municipal Property Tax) and IMT (Municipal Tax on Property Transfers). These changes are part of a broader effort to support young people in acquiring their own home in an increasingly challenging real estate market with high prices. Learn about the new rules and the impact they will have on property purchases in Portugal. IMI exemption for young people up to 35 years old One of the main new measures is the IMI exemption for young people up to 35 years old who purchase their first home. With this measure, young homeowners can benefit from tax exemption. It is important to ensure that the Taxable Asset Value (VPT) is correct, as this is the basis for calculating IMI and is updated by the tax authorities every three years. This support applies exclusively to primary and permanent housing , meaning the property must be intended for the buyers residence and not for rental or as a second home. This measure aims to encourage property purchases by young people, helping to reduce the annual costs associated with homeownership and facilitating access to housing. IMT exemption on first home purchase Another relevant measure is the IMT exemption on the purchase of the first home, a tax usually paid at the time of signing the deed and which is based on the propertys purchase value. Under the new rules, young people up to 35 years old can benefit from this exemption for properties up to a limit of €316,772 , alleviating a significant portion of the initial acquisition costs. If the propertys value exceeds this amount, the exemption is partial, meaning the young buyer will only pay the proportional difference, making the purchase more affordable even for higher values. This measure aims to reduce entry barriers into the real estate market and facilitate homeownership. Tax benefits for young people with mortgage loans In addition to the IMI and IMT exemptions, young people who take out a mortgage for their first home can also benefit from additional deductions on income tax (IRS). These benefits, combined with advantageous financing conditions offered by some banks, help reduce monthly costs and make mortgages more accessible for young people, encouraging property purchases by a generation facing increased challenges in the housing market. Impact of the new measures on the real estate market These new rules come at a time when property prices continue to rise, making it increasingly difficult for young people to buy a home. The IMI and IMT exemptions, as well as the tax benefits associated with mortgage loans, aim to ease the financial burden on young families and encourage new buyers to enter the market. These measures may also have a positive impact on the dynamics of the real estate market, encouraging property purchases in peripheral areas and less densely populated cities, where prices are more affordable. On the other hand, the new rules may increase demand for properties within the exemption limits, contributing to greater market turnover. What to consider when buying a house with the new exemptions To make the most of these measures, it is important for young people to learn about the requirements and limits set for each benefit. Choosing the right property, properly using mortgage loans, and verifying eligibility criteria are essential steps to ensure access to exemptions. Real estate and tax consultants play an important role in guiding buyers, helping them navigate the new rules and make informed choices. Knowing all the exemption possibilities and the necessary procedures to obtain them can make all the difference at the time of purchase. The recent changes to IMI and IMT taxes represent a significant effort to support young people in buying their first home, making the dream of owning a home more accessible. For real estate consultants, these changes open up new opportunities to attract young clients by adjusting their communication and advisory strategies. These measures not only provide immediate relief from initial purchase expenses but also encourage more balanced financial management in the long term, promoting the sustainability of the real estate market in Portugal. If you are young and looking for a home, visit https://supercasa.pt/en-gb/
Source: Adobe Stock Author: Redaction With the growing interest of foreigners in purchasing property in Portugal, many financial institutions are offering mortgage loans tailored to international investors. However, to facilitate the financing approval process, it is crucial for foreign applicants to be aware of the necessary documents and be prepared to present them appropriately. To apply for a mortgage in Portugal as a foreigner, the following documents are generally required: Personal Identification: A valid passport or ID card from the country of origin. If residing in Portugal, a Portuguese tax identification number may also be required. Proof of Residence: Utility bill, rental agreement, or other document confirming current residence. Proof of Income: Tax returns, salary receipts, or proof of income from business activities. If the applicant is self-employed, additional documentation regarding their activity and income is essential. Employment Contract or Proof of Employment: A document confirming job stability, such as an employment contract or a letter from the employer. Bank Statements: Copies of recent bank statements, generally from the last three to six months, to demonstrate the applicant’s financial capacity. Property Documentation: Purchase or reservation contract, appraisals, and other documents related to the property being acquired. Portuguese Tax Identification Number (NIF): To obtain a NIF, foreigners must visit a tax office in Portugal or a Portuguese consulate in their home country. Proof of Down Payment: To ensure the buyer can cover part of the property cost, proof of available funds is required. In addition to these documents, each bank may have specific requirements, and it is advisable to consult directly with the financial institution to obtain a detailed and updated list. It is also recommended to seek the assistance of a financial or legal advisor specializing in international real estate transactions to ensure that all legal and financial aspects are properly addressed. With the proper documentation and careful planning, foreigners can successfully navigate the mortgage process in Portugal and achieve the dream of acquiring property in the country.
Source: Adobe Stock Author: Redaction Many Portuguese are unaware that transferring their mortgage to another bank can result in significant savings over the course of the contract. With rising interest rates and financial pressure on families, mortgage transfers have become an effective solution to reduce monthly payments and, in some cases, save thousands of euros over the total loan. This process, also known as mortgage portability, allows the borrower to transfer their loan to another bank that offers more advantageous conditions, such as lower interest rates or the elimination of some fees. With increasing competition between banks, many institutions are offering more attractive packages to attract new clients, creating interesting opportunities for those looking to renegotiate their mortgage. Before proceeding with the transfer, clients should carefully analyze the conditions offered by the new bank, comparing interest rates (fixed or variable), repayment terms, and any associated fees. Changing banks may involve some initial costs, such as transfer fees and expenses related to the new deed, but these costs are often quickly offset by the savings generated in the medium and long term. Furthermore, the original bank may apply a penalty of up to 0.5% on the outstanding balance for variable-rate mortgages or up to 2% for fixed-rate loans. However, the accumulated savings from the reduced interest rates can outweigh these initial costs. According to financial experts, transferring a mortgage can be particularly beneficial for loans with high interest rates. Depending on the conditions, customers can save several hundred euros per year, and in long-term contracts, savings can reach thousands. In times of economic uncertainty, with inflation squeezing family budgets, exploring mortgage transfer options can be a smart strategy for those looking to reduce their financial burden and increase budget flexibility. Experts recommend that consumers seek information from various institutions and compare offers to secure the best possible deal. If you have an active mortgage, it’s worth reviewing its terms and considering whether transferring to another bank could be the key to substantial savings.
Source: Adobe Stock Author: Redaction Before approving a mortgage, banks in Portugal require the property to be appraised by certified experts. This bank appraisal, often unknown to buyers, is a mandatory step in the process of obtaining financing. The main goal is to ensure that the propertys value aligns with the amount of credit requested, ensuring that the property will serve as adequate collateral in case of loan default. The appraisal process begins after the credit application is submitted to the bank. The bank appoints an independent appraiser, who conducts a detailed analysis of the property, considering factors such as location, size, condition, and the prices of similar properties in the region. Based on these criteria, the expert determines the propertys market value. This value is crucial, as it determines the percentage of financing the bank will grant. Typically, financial institutions finance between 80% and 90% of the lower value between the purchase price and the appraisal value. If the property is appraised at a value lower than the purchase price, the buyer will have to cover the difference with their own funds. The appraisal has costs, ranging from €200 to €400, depending on the location and type of property. This fee is paid by the client, regardless of whether the loan is approved or not. Furthermore, the appraisal process can influence the banks final decision on granting the credit, potentially leading to the need to renegotiate the loan amount or terms. Although it is a mandatory step, the bank appraisal can be advantageous for buyers, serving as protection against purchasing an overvalued property. However, it can also be an obstacle for those who struggle to cover the difference when the appraisal falls short of expectations. The bank appraisal is an essential and mandatory step in the mortgage process in Portugal, ensuring that both the bank and the buyer are protected in a constantly evolving real estate market.
Source: Adobe Stock Author: Redaction Until the end of 2024, families with variable-rate mortgage loans will still be able to reduce their debts to the bank without incurring the 0.5% early repayment commission. However, if no new legislation is approved, this measure will end next year. The temporary suspension of commissions charged by banks in Portugal on early mortgage loan repayments is coming to an end without new legislation being passed to regulate the issue. The end of the suspension comes at a time when interest rates remain high, which may worsen the difficulties faced by Portuguese families with housing loans. In recent months, several consumer protection associations and political parties have pressured the government to extend the measure or create new legislation to limit the costs associated with early repayment. However, there has been no parliamentary consensus so far to approve a definitive solution. According to industry experts, with the end of the suspension, banks will once again be able to charge commissions on early loan repayments, ranging between 0.5% and 2% of the amount repaid, depending on the contract type. The absence of a new law may hinder the plans of many families who intended to reduce their debt to ease the impact of monthly payments, especially in a context of rising Euribor rates, warns João Ferreira, an economist specializing in the real estate market. The government, for its part, assures that it is working on a solution but has yet to present a concrete proposal. Finance Minister Marta Vieira stated last week that the executive is aware of families concerns and that it will be a priority to define a fairer and more transparent framework in the coming weeks. However, the opposition criticizes the delay and accuses the government of failing to address a problem that affects thousands of Portuguese. Until new legislation is approved, those who choose to repay their mortgage early will once again face associated costs, a factor that may discourage many families from reducing their debts. With uncertainty around future measures, consumers are once again at the mercy of banking practices.
Source: Adobe Stock Author: Redaction With the rising cost of living and inflation putting pressure on the budgets of Portuguese families, the government has implemented various support measures for workers earning the national minimum wage. These aids aim to alleviate the impact of essential expenses such as food, housing, and energy, ensuring that those with lower incomes receive some financial relief. Salary supplement One of the main measures is the Annual Salary Supplement, aimed at low-income workers. This support consists of an extraordinary payment at the end of the year, calculated based on the number of months worked and annual income. The goal is to complement the minimum wage, providing financial reinforcement for additional expenses. Housing subsidy The Rent Support Program is another available mechanism. Intended for those who have difficulty paying their rent, this subsidy aims to support families living in rented accommodation who face financial difficulties due to rising real estate prices. Energy support Minimum wage earners can also benefit from the Social Energy Tariff, which offers a significant discount on electricity and gas bills. This measure is automatic, applied directly by energy providers, without the need for consumers to request it. Public transport discounts Another important support is the Social+ Pass, which offers discounts on public transport for low-income individuals. This measure is essential for workers who depend on public transport daily and helps to significantly reduce travel expenses. Food support With rising food prices, the government has strengthened support through the Food Support Program, in partnership with charitable institutions. This program distributes essential goods baskets to low-income families, supplementing their food budget. Child and education support For families with children, there are also support measures in education, such as the family allowance, which can be increased for minimum wage workers. Additionally, there is the possibility of exemption or reduction of costs in nurseries and public schools, easing the family budget for education and childcare expenses.
Source: Adobe Stock Author: Redaction According to information from the Bank of Portugal released this week, the average interest rate on new mortgage credit contracts and renegotiated contracts decreased in July by 0.03 percentage points and 0.09 percentage points, respectively. Thus, the interest rates for new mortgage credit contracts dropped to 3.56%, while the rates for renegotiated contracts decreased to 4.05%. There was also a decrease of 0.03 percentage points in the average value across other European countries. Portugal had one of the lowest interest rates (7th place) compared to other countries. Read more about: IRS: new tables in effect.
Source: Adobe Stock Author: Redaction The Bank of Portugal released statistics regarding new mortgage loans, recording a 74% increase in new loans contracted with a mixed interest rate in July. This means that more people are opting for a mixed interest rate, where they initially have a fixed-rate period followed by a variable-rate period. Since January of this year, the 6-month Euribor rate has been the rate that more Portuguese are choosing , representing 37.5% of mortgage contracts with a mixed interest rate. Read more about: Do you know how to evaluate loan conditions? We tell you everything.
Source: Adobe Stock Author: Redaction Payments are decreasing, and the market anticipates further declines until the end of 2025 . Portuguese households will only notice the reduction in the month of their contract review. The Euribor, the main benchmark used in mortgage loans, is expected to end the year below 3%, providing financial relief for both families and businesses. The outlook suggests that we are beginning a cycle of interest rate reductions. The next European Central Bank (ECB) meeting, scheduled for September 12 , will be crucial in setting the course for these declines. Banks have already started adjusting to this downward trend. The 12-month Euribor , which was above 4% between June 16 and November 29, 2023, even reaching 4.2%, has started to decline and currently reflects a 1% reduction. The same pattern is observed in the six-month rate, which also exceeded 4% between September 14 and December 1 and has been decreasing. According to the Bank of Portugal, in June, the most common variable rate was the six-month Euribor, representing 37.5% of all real estate loans. The 12-month Euribor followed with a 33.7% share, and the three-month rate accounted for 25.7%. Read more about: Local accommodation: extraordinary contribution revoked.
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