Common pitfalls when buying property in Portugal

There are several potential pitfalls to consider when buying property in Portugal. 

Here are a few:

1. Lack of due diligence: It's important to thoroughly research the property and the surrounding area before making a purchase. This includes obtaining a property report done by a lawyer, after analysing all the existing documents needed for a purchase, highlighting all the potential problems of the property (not enough documents to sell, wrong areas, existence of non-registered buildings, licensing issues, etc..) and checking if there are debts, and any liens or encumbrances.
2. Hidden costs: There may be additional costs associated with purchasing property in Portugal, such as property transfer tax, stamp duty, deed and registration costs, and even hidden costs arising from a promissory contract if its not done by your lawyer, or reviewed by it. All of this must go to your budget.
3. Poor quality construction: Some properties in Portugal may have been built using inferior materials or construction techniques. It's important to hire a licensed surveyor to inspect the property before making a purchase to ensure that it is of good quality.
4. Zoning issues: Make sure that the property is zoned for the use you have in mind. For example, if you want to run a tourism activity with retreats aiming to build or rebuild houses, or instal wooden chalets, yurts, glamping or other,  the location of the property is of the essence.
5. Difficulties with financing: It can be difficult to obtain financing for a property in Portugal if you are not a resident of the country. It's important to research your financing options and be prepared to pay a large down payment if necessary.
6. Language barriers: If you do not speak Portuguese, it may be difficult to communicate with local authorities and service providers. It's a good idea to hire a fluent English Speaking lawyer to assist you with the purchasing process. Especially when you need a promissory contract to secure the deal. Many foreigners sign contracts fully written in Portuguese, not knowing what is written and the consequences of each clause. Having a promissory contract done both in Portuguese and in English, side by side, like we do to our clients, is of the essence to have clarity about all things (you can read it, ask for clarification of the meaning, request for changes) and feel safe throughout the purchase process of properties in Portugal

It's important to have all of this in mind, knowing these are not all the existing pitfalls, but only some of the most common. Waiving legal assistance might probably be the biggest one. Because instead of saving, you end up spending much more afterword’s (time, money, worries, uncertainty). And you don’t want to do that, I’m sure.

Nuno de Almeida e Silva

(Lawyer)

(Disclaimer: The information referred in this post is generic and cannot be considered has legal advice nor binds the author to any responsibility if anyone takes action upon it. Please, if you have any legal doubts our questions, contact a lawyer to analyze your case, and give you legal advice to your specific situation.)