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How to purchase your Portuguese dream home...

Steps to buying a property in Portugal with a Portuguese mortgage.

Here is some helpful advice for buying a property in Portugal and securing your Portuguese mortgage.

Even before you find your Portuguese property, we can assist you by obtaining an agreement in principle from our Portuguese panel of lenders. This will give you confidence knowing that a panel of underwriters has already briefly assessed your situation before you even go to Portugal, and has agreed in principle to provide you with a mortgage for your Portuguese property purchase.

1. Documents required at the early stages

When you select the property in Portugal that you want to purchase, you need to obtain:

Registration certificate for the property (Certidão de Teor).You can obtain this from the local land registry in Portugal, and it confirms that the seller has the right to sell the property.
Tax documentation for the property (Caderneta Perdial). This can be obtained from the local tax office.
Please be aware that due to Portuguese law, a birth certificate containing both parents’ names is required in order to process a mortgage application, although this regulation may be removed soon.

2. Portuguese Fiscal Number, or Número Fiscal de Contribuinte

The next thing you will need is the número fiscal de contribuinte, or Portuguese fiscal number.
This can be obtained in Portugal at the local tax office where you are purchasing the property or from the Portuguese Consulate in London or Edinburgh. Alternatively we can assist you in obtaining your Portuguese fiscal number. It generally only takes about 24 hours to be issued by the Portuguese authorities, but without it a bank account can not be validated or a mortgage application formally processed.

3. Portuguese bank account

The next step is to open your Portuguese bank account. We can assist you with this from our London office. Please remember that you will require your Portuguese fiscal number before your Portuguese bank account can be validated.

4. Additional documentation you will need to provide

The following is a list of the usual documents that are required with your Portuguese mortgage application. All Portuguese mortgages need to be supported by proof of income documentation, as non status mortgages in Portugal are not available.

Certified copy of passports
Birth certificate
Portuguese fiscal or tax number (Numero Fiscal de Contribuinte)
Previous two (but preferably three) tax returns. This can be in the form of P60’s if you are employed, or audited accounts if self employed.
Previous six months bank statements
Signed copy of the sales purchase contract (Contrato Promessa de Compra e Venda)
Credit report
Copy of the planning permission (if you are constructing or renovating the property)
Letter from your employer confirming your employment with the company and salary plus three months pay slips if you are employed, or a letter from your accountant confirming your last two years net profit figures if you are self employed
Confirmation of any other stated income
Confirmation of any stated liabilities (e.g. latest mortgage statement)

5. Stage payments are available if you want to construct your Portuguese property.

Generally the payment structure for stage payments is as follows:

The client pays the first 25%
The bank will fund the next 60% (in 4 stages 15%)
The client pays the final 15%

If you are looking to rent your Portuguese property:

Some items to be aware of if you are planning to rent your Portuguese property.

You may not be able to find a tenant for your Portuguese property all year round. You will need to take this into consideration when working out the affordability of the property you are considering
Costs you may incur include cleaning and maintenance.
You may be liable to tax on your rental income. You should always seek independent advice from a tax expert.