Selling property in Portugal as a foreign owner

You bought your place in Portugal years ago. Now plans have changed: you are moving back home, downsizing, or simply ready for the next chapter. The market is good and an agent has already found an interested buyer.

Then the questions start. Is the property registered correctly? Where is the licence of use? Why does the area in the deed not match the land? For foreign owners, a sale often stalls not for lack of a buyer, but because the property was never fully in order, and nobody noticed until now.

This guide explains what to prepare before you list, how the sale works, even from abroad, and what to expect on the tax side.

Before you list: get the property in order

Check the records. The property should be registered in your name at the Land Registry, and the Land Registry, the tax record and the cadastre or BUPi should describe the same property. If you bought years ago and the area, the buildings or the boundaries never matched, now is the time to fix it.

Gather the documents. A buyer, their lawyer and their bank will normally ask for:

Clear any charges. If there is a mortgage, plan with your bank how it will be paid off and cancelled at completion.

Check whether others have rights. For some rustic plots, neighbours have a legal right of preference, and tenants may have similar rights. Where they apply, they must be formally notified before the sale.

Keep your tax details up to date. Your Portuguese tax number and your address with the Tax Office should be current. Owners living outside the EU may need a tax representative.

The sale, step by step

1. Pre-sale check. Records, buildings and land are reviewed and any problems fixed, so the property is ready to sell.
2. Listing. Most owners sell through a local estate agent. Agree the commission and the terms in writing.
3. Promissory contract (CPCV). When you have a buyer, you sign a promissory contract and receive a deposit. If you later back out without a valid reason, you may have to return double the deposit, so make sure you can deliver what you promise.
4. Completion. The sale is signed before a notary, at a Land Registry office or as an authenticated private document prepared by a solicitor or lawyer. You receive the balance of the price.
5. After the sale. The buyer registers the property in their name. You cancel utilities, notify the Tax Office where needed and deal with the tax on the sale.

Selling from abroad. You don't need to fly back. You can sign a power of attorney at a Portuguese consulate, or before a local notary with an apostille, giving someone you trust the powers to sign the promissory contract, complete the sale and receive the price. Choose an independent professional, never someone acting for the buyer.

Taxes when you sell

Capital gains in Portugal. If you sell for more than you paid, the gain on a Portuguese property is normally subject to tax in Portugal, even if you live abroad. It is declared in the Portuguese income tax return for the year of the sale. How the gain is calculated, and how much of it is taxed, depends on factors such as when and how you acquired the property, the costs of buying and improving it, and your tax residence.

Tax where you live. Your country of residence may also tax the sale or ask you to report it. Double taxation agreements often prevent you from paying twice on the same gain, but the rules vary from country to country.

Taxes until completion. You remain responsible for the annual municipal property tax (IMI) according to the rules in force, until the property changes hands.

The key is timing: have the tax side assessed before you agree a price, not after you have spent the proceeds.

Sell with everything in order

At MGPS International, the practice of Portuguese solicitor Francisco Gomes Pereira, we prepare properties for sale and complete sales for owners who live abroad. Because Francisco is also a cadastral technician and a qualified BUPi technician, we fix the land as well as the paperwork.

We can:

• check the records, the buildings and the land before you list, and fix what needs fixing;
• prepare the BUPi map outline for rustic and mixed plots;
• gather every document the buyer and the completion will require;
• review the promissory contract and represent you at completion with a power of attorney;
• have the tax side assessed by our in-house tax specialists, with accounting services available through our partners.

Thinking of selling your property in Portugal? Book a call and tell us where it is and what documents you have. We'll tell you what needs doing before it goes on the market.

This article is for general information only and is not legal or tax advice for any specific case.