Registration of title in Portugal (2024)

Is real estate registered/does a reliable register of land ownership exist? Are transfers of title recorded? Is title insurance common?

In Portugal, the property rights that can be acquired are the following:

• Full ownership or freehold, consisting of full and exclusive right of possessing, enjoying and disposing of real property.
• Surface right, consisting of a right to build and maintain a building, using and enjoying the building, on, or under, a third party's land, or to plant any crops on said piece of land. Surface rights can be created for a defined period of time or can be perpetual. When surface right terminates, the owner of the land becomes the owner of the building incorporated in the land.
• Usufruct, consisting of a right to use and enjoy a third party's real property for a certain period of time, which cannot extend after the death of the beneficiary or be granted for periods longer than 30 years if the beneficiary is a legal person. The beneficiary can use the real estate in the same way as if he was the owner and collect natural profits, industrial profits or civil profits, provided the original economic function of the real estate is maintained.
• Right of use, consisting of a right to use a third party's property to meet one's own specific needs or the needs of one's family.

Last modified 3 Apr 2023

Is real estate registered/does a reliable register of land ownership exist? Are transfers of title recorded? Is title insurance common?

No, real estate property can be freely acquired by foreign investors.

Last modified 3 Apr 2023

Is real estate registered/does a reliable register of land ownership exist? Are transfers of title recorded? Is title insurance common?

Yes. There are several mandatory pre-emption rights, such as:

• In cases of co-ownership of land, when one of the owners intends to sell his share, the remaining owners have a pre-emption right over the same
• Owners of rural land can have in certain cases pre-emption rights regarding the sale of contiguous property
• Public entities may have pre-emption rights regarding the acquisition of properties legally classified as realty with historical and/or architectural value
• Some municipalities also have pre-emption rights over certain transactions regarding real estate within their territory
• Tenants may have pre-emption rights over leased property

Last modified 3 Apr 2023

Is real estate registered/does a reliable register of land ownership exist? Are transfers of title recorded? Is title insurance common?

In Portugal, private property transactions are mainly ruled by the Portuguese Civil Code. However, certain provisions of tax law, registration law, public law and corporate law are also applicable.

Last modified 3 Apr 2023

Is real estate registered/does a reliable register of land ownership exist? Are transfers of title recorded? Is title insurance common?

No. Generally, there is not a special set of laws for each of these types of real estate.

Last modified 3 Apr 2023

Is real estate registered/does a reliable register of land ownership exist? Are transfers of title recorded? Is title insurance common?

Transfer of real estate can be executed through the execution of a public deed with a public or private notary or through an authenticated private document. Subsequently, the transaction should be duly registered with the relevant Land Registry Office.

Last modified 3 Apr 2023

Is real estate registered/does a reliable register of land ownership exist? Are transfers of title recorded? Is title insurance common?

Yes. Real estate is subject to registry with the relevant Land Registry Office. Registration is reliable.

Are transfers of title recorded in this country?

Yes. Transfers of title must be recorded with the Real Estate Registry and afterwards registered with the Tax Services.

Does title insurance exist in this country?

No, title insurance does not exist in Portugal.

Last modified 3 Apr 2023

Is real estate registered/does a reliable register of land ownership exist? Are transfers of title recorded? Is title insurance common?

Structuring a real estate transaction commonly requires several steps. Including:

• Due diligence
• Promissory agreement (with or without registration)
• Transfer agreement
• Payment of taxes due prior to the public deed such as stamp duty and municipal property transfer tax (IMT)
• Public deed or authenticated private document
• Final registration

Last modified 3 Apr 2023

Is real estate registered/does a reliable register of land ownership exist? Are transfers of title recorded? Is title insurance common?

Yes. Due diligence is usually carried out by buyers, in order to obtain information regarding ownership, charges, encumbrances, tax debts, licenses, contracts concerning the property, and other contingencies and/or liabilities. Part of the relevant information can be accessed directly with public authorities such as Land Registry Office, Tax Services and Municipalities, but in most transactions sellers provide themselves the documentation required by the purchasers.

Last modified 3 Apr 2023

Is real estate registered/does a reliable register of land ownership exist? Are transfers of title recorded? Is title insurance common?

Yes. Civil law requires special specific consents for certain transactions, such as the consent by a spouse (depending of marital agreements), by the legal representatives of a minor, by co-owners of real estate and by individuals or entities with pre-emption rights.

Last modified 3 Apr 2023

Is real estate registered/does a reliable register of land ownership exist? Are transfers of title recorded? Is title insurance common?

An SPA can be executed as a public deed or through an authenticated private document, subject to some formal requirements, including the registration in the Land Registry Office.

What is a typical contract or SPA in this country like?

In Portugal, the parties are free to structure the SPA as they wish and there is no standard form mandatorily imposed. In any case, the SPA provisions should include full and exact description of the property in terms of registration number with the Land Registry Office, number of registration with the Tax Services, reference of the relevant license and the full description of the all conditions of the business (price, payment, liabilities).

Last modified 3 Apr 2023

Is real estate registered/does a reliable register of land ownership exist? Are transfers of title recorded? Is title insurance common?

Seller is obliged to provide several warranties. In fact, property must not suffer from any defect with a negative impact on the property's value or which makes its normal use impossible. In addition to that, the real estate must also have the characteristics warranted by the seller and be free from any charges, liens or encumbrances if the seller has expressly declared so in the transaction agreement. It should be noted that this sort of warranties may be expressly waived by the parties.

In case of breach of warranties the buyer is entitled to ask for a refund, a reduction in the purchase price or may file a legal action for the annulment of the sale and purchase agreement. In the new construction the buyer must provide notice of the relevant breach to the seller within one year counted from the date of discovery of the defects and within five years of the date the property was handed over to the buyer.

Last modified 3 Apr 2023

Is real estate registered/does a reliable register of land ownership exist? Are transfers of title recorded? Is title insurance common?

In case of misrepresentation by the seller, the buyer can, depending on the circ*mstances, terminate the agreement or file a legal action for the annulment of the agreement, and claim reimbursem*nt of the amounts paid with a indemnification.

Last modified 3 Apr 2023

Is real estate registered/does a reliable register of land ownership exist? Are transfers of title recorded? Is title insurance common?

Relevant areas of public law are:

• Urban and planning law
• Licenses to the building
• Environmental law

Last modified 3 Apr 2023

Is real estate registered/does a reliable register of land ownership exist? Are transfers of title recorded? Is title insurance common?

Yes. The buyer of a property may be deemed responsible for soil pollution or contamination based on strict liability, even if he did not cause the pollution or contamination.

Last modified 3 Apr 2023

Is real estate registered/does a reliable register of land ownership exist? Are transfers of title recorded? Is title insurance common?

Buyers should check the relevant territorial planning laws and relevant licenses, in order to confirm that all legal conditions are met for the development of a real estate project.

Last modified 3 Apr 2023

Is real estate registered/does a reliable register of land ownership exist? Are transfers of title recorded? Is title insurance common?

Yes. Typically, these agreements provide for the developer’s obligation of transferring certain compensations, areas or infrastructures to the municipality, such as roads, public parking places, bridges, public gardens, etc.

Last modified 3 Apr 2023

Is real estate registered/does a reliable register of land ownership exist? Are transfers of title recorded? Is title insurance common?

Due to reasons of public interest, expropriation can occur, but this procedure entitles the former owner of the real estate to receive a compensation from public authorities.

Last modified 3 Apr 2023

Is real estate registered/does a reliable register of land ownership exist? Are transfers of title recorded? Is title insurance common?

When buying real estate in Portugal as an asset the following taxes may apply: municipal property transfer tax (Imposto Municipal sobre Transmissões Onerosas de Imóveis or IMT); stamp duty (Imposto do Selo); and VAT (Imposto sobre o Valor Acrescentado or IVA).

Municipal property transfer tax is payable at a single rate of 6.5% on the sale or transfer of any urban property not exclusively of a residential nature. The rate for rural properties is 5%.

In the case of the sale and transfer of urban buildings or apartments exclusively for residential purposes and intended to be the buyer's permanent residence, IMT is payable at the following progressive rates:

IMT is calculated using the following formula:

(Taxable value x Rate) – Threshold deduction = IMT to be paid

IMT is payable on the sale and transfer of urban buildings or apartments exclusively for residential purposes and/or intended for letting purposes, but not intended as the buyer's permanent residence, in general at the following progressive rates:

To discourage the purchase of real estate in Portugal through offshore companies, IMT is levied at a rate of 10% if the buyer is a company established in a country, territory or region with a preferential tax regime. Further, as of 1 January 2021, the same punitive tax rate applies, when the acquirer is an entity dominated or controlled, direct or indirectly by a company established in a country, territory or region subject to a preferential tax regime. In these cases, no exemptions are made available.

A list of relevant offshore jurisdictions is published by the Portuguese Government.

When property is transferred for consideration it is subject to a flat rate of 0.8% stamp duty. Stamp Duty will be calculated on the price paid in the transaction or on the value of the real estate assessed by the Tax Authority (VPT), whichever is higher.

In principle, the transfer of real estate as such is exempt from VAT. VAT only applies if the seller waives the standard VAT exemption.

Notary's fees are also payable.

According to the current Notary's Fee Schedule, public deeds are subject to a fee of €175, regardless of the value of the sale.

Registration of the public deed in the Land Registry Office costs €9.

Some reductions in the fees may be allowed when rural property is transferred by inheritance.

With the privatization of the notarial profession and where a deed is more complex than expected, notaries may charge an extra fee proportionate to the amount of work involved.

The usual average fee (as scheduled plus the extra fee) amounts approximately €250, plus VAT at the legally applicable rate of 23%.

Other costs include the registration of the transfer with the local land registry office, but land registry fees and related stamp duty are limited and strictly set by law, and should not amount to more than €250 for each registration.

The buyer is normally responsible for the transaction costs. The buyer is also responsible for the assessment and payment of IMT and VAT, when the VAT exemption has been waived. Stamp duty is paid by the buyer (who pays the notary's fees and the VAT levied on them) and is charged by the tax authorities before the public deed of transfer is signed.

Last modified 3 Apr 2023

Is real estate registered/does a reliable register of land ownership exist? Are transfers of title recorded? Is title insurance common?

In the case of a share deal, as of 1 January 2021, IMT applies to the purchase of an equity position both in a private limited liability company (Lda.) and in a corporation (S.A.) which holds real estate assets located in Portugal if the following requirements are cumulatively met:

1. The asset value of the company transferred is, directly or indirectly, composed by more than 50% of real estate assets located in Portugal;
2. The real estate assets are not directly allocated to an activity of agricultural, industrial or commercial nature, unless the activity is of purchase and sale of real estate property; and
3. As result of the acquisition (or other corporate events) one of the shareholders retains at least 75% of the share capital of the target entity (or the number of shareholders is reduced to two persons married or in a non-marital partnership).

Until December 31, 2020, IMT could only apply with respect to private limited liability companies, but this tax applied in all cases resulting in a transfer of at least 75% of the share capital of the company.

If the purchase of shares involves a privately placed closed-end Real Estate Investment Funds, the transaction is subject to IMT if after the acquisition the acquirer holds 75% or more of the units in the fund.

The buyer is responsible for the assessment and payment of IMT, as well as VAT if applicable. IMT must be paid before the deed is executed and the notary is obliged to confirm that it has been paid.

Stamp duty, where applicable, is paid by the buyer (who normally also pays the notary's fees). The buyer must present the payment proof to the notary at the moment of the transfer signature. The tax is paid through a document issued by the tax authority (the buyer can issue the document in the tax authority website or request it in a tax authority service).

In addition, the acquisition of immovable property by means of reimbursem*nt in kind of participation units on the liquidation of a privately placed closed-end real estate investment fund, is subject to IMT.

IMT also applies to a transfer of immovable property arising from a merger of privately placed closed-end real estate investment funds.

Last modified 3 Apr 2023