If you're planning on buying property in Portugal in 2022, it's important to know all of the costs that will be involved on top of the property price. Buying a house in Portugal requires financial planning in order to cope with the initial costs inherent to the purchase of a property in the country. It's not just a matter of thinking about how much the mortgage will cost. There's a whole range of fees, commissions and taxes that you can't avoid. What are the costs of buying property in Portugal?How much tax do you pay when buying property in Portugal? We explain everything with the help of specialists in personal finance in Portugal.
- Portuguese property market 2022
- These are the costs of buying property in Portugal in 2022
- Avoid the dream of buying a house in Portugal turning into a nightmare
- Buy property in Portugal
Portuguese property market 2022
The property market in Portugal remains dynamic in 2022, and there are already more transactions than before Covid-19. Despite rising house prices, people, both from Portugal and abroad, continue to buy property in Portugal. This is also seen in the most recent data from the Bank of Portugal, which shows an increase in the granting of new mortgages of 1.5% compared to the amount recorded in July 2020.
100% financing of mortgages in Portugal is a thing of the past and since July 2018 the Bank of Portugal has stipulated that banks should finance a maximum of 90% of the lower value between the purchase price of the property and the appraisal value.
These are the costs of buying property in Portugal in 2022
- The largest amount of money you will need to pay when buying property in Portugal will be for the down payment or deposit.A 10% minimum down payment i required for permanent home ownership in Portugal and must come from your own capital, i.e. savings. It is a mistake to ask for a loan or financing to reach this amount, as this can make the whole credit approval process unviable. If the purchase is for a secondary residence, the minimum deposit amount is 20%.
- Keep in mind that if you are applying for a mortgage in Portugal as a non-resident, banks will not give you as much financing (usually 60-70%) and the rest you will have to pay as part of the deposit.
- Another aspect to take into account when buying property in Portugal are taxes. What taxes do you pay on property in Portugal? Through the IMT and IS Simulatorby APEMIP it is possible to calculate the municipal tax on the transfer of real estate (IMT) and stamp duty (IS).
- Bank commissionsare another expense you should keep in mind, although they vary from bank to bank.Each bank in Portugal has its own price list in relation to the costs of property evaluation, taking out a mortgage and other costs.
- When it comes to the property deeds,there are also price differences and it is possible to save hundreds of euros, because it is not mandatory to do the deed where the bank proposes. Between notaries, registry offices (Casa Pronta) or authenticated private documents, it is possible to choose what best suits your situation.
As a reference, the cost of the procedure at the registry office has a fixed price of approximately 700 euros, plus certificates.
Avoid the dream of buying a house in Portugal turning into a nightmare
According to data from 2020, the average price of property bought by people in Portugal is 150,000 euros. In the case of mortgage covering 90% of the value of this value, the expected costs would be as follows:
- Deposit/Down payment: 15,000 euros
- Bank fees (approx.): 1,500 euros
- Taxes (approx.): 3,060 euros
- Registering of the deeds (approx.): 1,045 euros
- Total costs (+/-): 20,600 euros
Starting with visits to properties, the choice of the house you want to buy, dealing with the mortgage and all the documentation, buying a house in Portugal is a process that often becomes time-consuming and tiring, especially if you're moving from abroad.Therefore, financial planning is key and helps many people to make the right decisions.
Buy property in Portugal
If you're ready to make the move and have your financial planning and budgeting done, all that's left to do is find your dream home in Portugal. We're here to help, and on the idealista website you'll find the largest selection of property for sale in Portugal.
