The hidden costs of buying property in Portugal
The price you see advertised for a property will never be the final price you pay. There are a number of other costs that you will need to pay on top of this, such property taxes and legal fees – and you will also need to consider the ongoing effects of currency market fluctuations and how this will affect the amount that you need to pay originally in sterling.
Once you know exactly how much you can afford to spend on your new Portuguese property (and where this money is going to come from) you will need to assess exactly what this money will need to cover. You will need to make sure you have enough funds available to cover all the additional costs, on top of the purchase price – as well as anything that could pop up unexpectedly.
If you have £270,000 available to purchase property, less than £250,000 of this should be spent on the actual property.
How much extra will you need?
We recommend allowing yourself at least 8% on top of the purchase price for your property – meaning if you have £270,000 available to purchase property, less than £250,000 of this should be spent on the actual property. The additional costs that should be covered include:
Transfer Tax (Imposto Municipal sobre Transamissoes – IMT)
This tax is levied on properties based on a number of factors, and will depend on the price of your property and whether this will be your primary residence. The cost of this tax will generally be your largest additional cost.
Stamp Duty (Imposto do Selo)
The amount for this varies by property type and value, and will usually be between 0.4 and 0.8%.
Notary and Land Registry fees
You can expect to pay at least €500 for these.
Independent solicitor fees
These will generally be between 1-3% of the purchase price depending on a number of factors
Currency transfer costs
You will need to ensure that you are not spending more than necessary when you transfer you funds from the UK to Portugal by making the best of each transfer. The best way to do this is by using a currency exchange specialist, such as our partners Smart Currency Exchange, who offer favourable exchange rates and do not charge fees on transfers more than £3,000. You will also receive access to your own personal account manager who will be able to work closely with you on your transfers, ensuring you make the most of your transfers and protecting you from the ongoing volatility and fluctuation in the currency markets.
You will also need to consider the cost of maintaining your life in Portugal after your move – there are numerous costs that you will need to make on a monthly or yearly basis, including: local property and council taxes, community fees, utilities, insurance, maintenance costs, and council tax (IMI).
The Portugal Buying Guide is designed to support you through each stage of buying property in Portugal, providing relevant, up-to-date information and tips from Portugal property experts and expats who have been through the process themselves. The guide helps you to: