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COSTS YOU CAN´T AVOID WHEN BUYING AN ESTATE

As any other purchase, buying a real estate means certain obligations which you won´t be able to avoid, since they are directly related to the legal procedures of acquiring or transferring a property. So that you won´t be caught off guard we will name some of the most common charges in this situation:

- If you have to ask for a bank loan in order to buy your estate, you will have to pay the bank fees. Those fees are mere bank commisions which are charged by the bank institution itself until the deal is concluded. These charges vary according to the different bank institutions. In what concerns Lookgreat - Real Estate Portugal has the advantage of having protocols with the main bank institutions.

- A sign is the name given to the value that the buyer gives to the seller (owner of the estate), when they sign the contract where they promise to sell and to buy to one another. However, the sign does not represent an additional cost, because it corresponds to a percentage of the total value of the estate you will pay the owner. So, the final amount will be the total price of the estate less the sign you previously gave the owner.

- Notarial costs are costs that you will have with the bill of sale of your estate that if it´s the case, can be mortgaged.

- When you buy the estate you will have to register it, which will also hold some costs. These costs refer to signing your estate in the Land Registry Department when you obtain a mortgage over the estate. The value you will have to pay depends on the acts you wish to register.

- You will have to pay the stamp tax referring to the buy and sell that will be approximately 0,8% of the price or tributary patrimonial value. The value of the stamp tax is according to the stipulated in the General Chart of the Stamp Tax. This Tax is charged when you sign the bill of sale.

- The law demands that you have an insurance against fire or a multi-risk insurance, which covers other types of accidents.

If you have a bank loan to buy an estate, you will be demanded to get a life insurance as well.

- The IMT, it´s a municipal tax on the onerous transmission of real estates.

This tax necessarily depends on the value of the purchase and sell or of the tributary patrimonial value. It is calculated the following way: the tax times the value of the transaction of the estate present on the Contract / Promise to buy and to sell and on the Bill of Sale (or on the tributary patrimonial value present on the land matrix, if it´s bigger) and deducted the "Parcel to liquidate" (see chart below).

In 2006 people are exempt of this payment for buying real estates up to 83.500 € (57.615 £). Nevertheless, there´s a chart containing information on this tax, which we show below:

Value for calculating the Tax without Transmissions

Tax

Amount to be deducted

up to 83.500 € (up to 57.615 £)

0 %

0 € (0 £)

from 83.501 to 114.800 € ( from 57.616 to 79.212 £)

2 %

1.670 € (1.152 £)

from 114.801 to 156.500 € (from 79.213 to 107.985 £)

5%

5.114 € (3.529 £)

from 156.501 to 260.900 € (from 107.986 to 180.021 £)

7 %

8.244 € (5.688 £)

from 260.901 to 521.700 € (from 180.022 to 359.973 £)

8%

10.853 € (7.489 £)

more than 521.700 € (more than 359.973 £)

flat tax of 6%

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