Looking back at buying a property in Portugal
There are few reasons for not wanting to live in Portugal. One of the first steps is usually buying a property1… we got ours in Amarante about two years ago; the experience turned out to be much more psychological than it was financial.
It starts with the realisation that the farther away you are from cities, and areas already popular with foreigners, the more the ambiguous the ‘facts’ about a property become. Whilst the authorities are trying to gradually sort this out2, some areas are still very much governed by local knowledge, cryptic landmarks, and handshake exchanges over the generations.
This means that the property you physically see might not match what’s on the documentation; documentation could be missing; there could be significant mismatches in plot sizes, or area that’s ‘included’ but that someone else thinks is theirs; or, someone has an unofficial right of way through your property. Or something else. Neighbouring plots might be abandoned or non-urban, that have exchanged hands several times since names were recorded on deeds3. That is, it might be hard to impossible to find the person to talk to in order to clear any ambiguity before purchasing.
Building without a permit4 is common outside cities, particularity for extensions, and this might not be clearly spelled out to you. For example, the main house could be ‘legal’, but the extra bathroom or guesthouse isn’t. If you do find out and ask, you could be told that it’s not a big deal. This might sit well with a local person that knows the system and how to deal with it, but it sat very uncomfortably with us. No one will be willing to guarantee that the local council — the Câmara — won’t come to knock on your door, or worse, on your unofficial kitchen with a wrecking ball. Sellers are unlikely to sort it out just for you5, so it’s a calculated risk you’ll need to take.
Then there’s what you learn along the way about things that one would’ve expected to be sorted much earlier. Are all the documents in order? Are all siblings ready to sell? Is there a topographical survey? Is the access road a public road? Is the road officially registered?6 Then there are is usual stuff: water, electricity, sewage, refuse collection, internet, etc. If those aren’t already existing and documented, prepare for some ambiguity about what’s possible in the future… and a long time to get it sorted.
My point is that the process of psychological transformation required for accepting ambiguity takes time, and only then you’d be ready to purchase7. Every person will need to decide how much ambiguity they can handle for the property they want; we still had to take on quite a bit of it even after doing what we felt necessary for comfort. Here are some of those things that we did, and some that we didn’t ;)
Don’t take the word of the seller’s estate agent (yes, this applies the universe-over). They are not necessarily deceiving you, but they won’t tell you everything, or, more commonly, they might diminish your legitimate concerns. If possible (also) talk directly to the seller to get their perspective.
Get an agent that works for you. This is a lawyer or a ‘solicitador’ that specialises in property. They will check the paperwork for you and make sure that you’re buying what you think you’re buying. They will also know the quirks of local notaries where all official property business is done. Always do this!
Talk to the Junta de Freguesia. This is the small local authority — ‘parish board’ — where there will be people who are very familiar with the land and its historical dynamics. You will learn a lot there so always do this; if you don’t speak Portuguese bring your own agent. If you end up buying the property the Junta will be where you go to register your dogs, get advice about local tradespeople, and get help with any local issues. They are very helpful!
Talk to a lawyer. If there’s a question that a solicitador can’t help with, a lawyer can explain some of your liabilities with respect to national and local regulations. They might lessen (or increase!) the ambiguity, but lawyers being lawyers, the don’t tend to guarantee anything.
Hire a local architect to examine the documentation and to alert you of any potential issues with undocumented structures, and how difficult (or impossible) it’ll be to legalise the property. They will be intimately familiar with local regulations — the Plano Diretor Municipal (PDM) — and will alert you with any of the issues you didn’t even think about, like having to deal with the many authorities that govern what can and cannot possibly be done in your property.
Don’t take the word of people online (like me). Circumstances vary significantly between areas and authorities. Local interpretations and culture really matters. What may be true in the Algarve won’t be true in Gerês8. Always get locals to help you!
Some of these items can be costly, but worth it under some circumstances and budgets. We learned many of these things over the years, and not necessarily before the purchase. We are still learning! A lot of this knowledge came from talking to people as much as possible; it turns out that the really useful information is not on a website about moving to Lisbon or immigrant — the British prefer ‘expat’ — forums.
Overall, we feel that we have taken a calculated risk in face of the ambiguity, and that it has worked out well. However, it could have gone the other way, and then we would surely regret not having done more upfront.
BUPi requires registering the land area with every property exchange. It is being rolled out and has become mandatory in Amarante a year ago. We understand that a mismatch of areas that is greater than 20% must be officially sorted.
Deeds will usually describe in words the kind and owner of the bordering plots; something like ‘to the north is a road and plot owned by Senhora Ferreira’ who might have indeed owned the land 50 years ago and long dead. Her heirs live in Brazil.
They may use the word ‘illegal’ — as in ‘this kitchen is illegal’ — for undocumented buildings, which can be scary for a foreigner new to the country to hear.
Buying usually involves the ‘promissory’ and ‘escritura’. The promissory is a legally binding promise to buy the property under some conditions that must be met for the sale can complete, like sorting out documentation (buyer also pays a deposit). By the time of the escritura, the actual transfer of deeds, all of those conditions must be satisfied. (There are penalties for not meeting the conditions of the promissory or for backing out.) Depending on the circumstances, there could be a few months between the two events or skipping the promissory altogether.
These sorts of things will greatly affect whether the local authority could approve a renovation, for example. If your local road is not registered and you want to build a house you’d need to sort out the road first, which might be difficult if it’s owned by someone else.
For our property we shook hands on a deal and then backed down. A few months later we came back and concluded the purchase. The sellers were very understanding and we’re friends now.
We love Amarante, but it’s known to be very slow when it comes to approving building plans. So you might have read in a forum that it took someone a month to push something through the Câmara, but you might be looking at a minimum of six months.