Valuation and recommended sale price
Usually, the sales process begins with a valuation, a recommended asking price and sales strategy. Our valuation consists of 5 steps. The first step is a comparison of the formal documents (see below) with the actual situation. The second step is a comparison with properties for sale or recently sold. The third step considers the specific qualities of the object to be valued. The fourth step consists of a competitive analysis with objects offered for a more or less similar price level. In the fifth and final step, a recommended sales price and a sales strategy are proposed based on the seller’s specific interests.
Required documents
Seller details:
- Copy of ID (passport or identity card).
- Número de Identificação Fiscal (NIF) (tax number)
- Ficha de identificação de interveniente (stakeholder identification form)
For valuation, promotion and sale, the following formal documents related to the property are required, among others:
- Certidão Permanente (official description with the municipality)
- Caderneta Predial (registration with Finanças)
- Licença de Habitação and/or Licença de Utilização (“Habitation and/or Use Permit”)
- Certidão antes 1951 (in case before 1951) (a declaration that the property was built before 1951 and is recognized as such)
- Ficha Technica (technical description – required for property built after March 2004)
- Certificado Energético (energy certificate)
- Plantas (government stamped floor plans)
- Licença de Captação de Águas Subterrânea (permit for water abstraction) if a borehole is present
Information on the use of the property, such as:
- Imposto Municipal sobre Imóveis (IMI) (annual municipal tax).
- Maintenance costs, such as for garden and swimming pool
- Cost of consumption of water, electricity and gas
- If applicable condominium information and costs
Real Estate contract
As a government licensed real estate agency Bright Homes Algarve (AMI 7858) requires a written mediation contract with the seller for the offer, promotion and sale of your property. Our standard contract meets the requirements of the Instituto dos Mercados Públicos, do Imobiliário e da Construção (IMPIC), which oversees activities in the real estate sector on behalf of the government.
The agreement to be signed by both parties, which sets forth the terms of the promotion and sale, is drafted in Portuguese. A version of the agreement in your preferred language is also available for easy understanding.
Promotion
For the promotion, we create a professional photo presentation, a video with drone shots and a 3D tour through and around the property. In addition, we make a clear comprehensive description in six languages (Portuguese, English, German, French, Swedish and Dutch).
For promotion, we use different channels that have both local and international reach, including:
- Our own website
- Various international real estate portals
- Regular advertisements in local magazines
- Periodically a locally available brochure
- Social media
- Our own database of interested clients
Accepting an offer
An offer consists of the price for the property, the price of any movable goods, the conditions and the desired delivery period. We will first discuss this with you, after which it is our challenge to bring you and the potential buyer together and to align mutual interests. If this is successful, we have reached a moral agreement, but not yet a legally valid one. This is only the case with the promissory purchase and sales agreement.
Use of a lawyer
As a seller, you will usually hire a lawyer to represent your interests in the sale. Perhaps a lawyer who has previously represented your interests.
If you cannot be present at the signing of the CPCV and/or the conveyance deeds, you can give your lawyer power of attorney to act on your behalf.
Incidentally, the costs of preparing the CPCV and the costs of the notarial transfer and registrations are borne by the buyer.
The promissory purchase and sales contract (CPCV)
With the signing of the promissory contract (Contrato de Promessa de Compra e Venda (CPCV)) by both the seller and the buyer and the payment of the deposit by the buyer, the purchase is binding for both parties. In the promissory contract, which is usually drawn up by the purchaser’s lawyer, the agreed price, the date of the final handover and the conditions that must be met during the process are described, among other things. If furniture is also taken over, an inventory list will be attached.
The deposit is generally agreed on 10% of the agreed price. If after the promissory contract the selling party does not deliver the property, the seller is usually obliged to pay twice this down payment to the buyer. If the buyer does not want to or is unable to purchase the property after signing the promissory contract, the buyer loses the deposit. The remaining 90% must be paid at the time of conveyance. If you are selling a new property which is still under construction, a different payment schedule will be applicable.
The public deeds
The conveyance deeds officially take place at a notary´s office, or an office to which the notary function has been granted. Unlike in many other countries, the notary in Portugal only has a checking role whether the legal requirements have been met. Prior to the conveyance deeds are signed, we inspect the property, preferably together with you, whether the house is delivered as agreed in the CPCV. We will also record the meter readings for water, electricity and eventually gas.
The remainder of the purchase price is usually paid into the clients’ account of the buyer´s lawyer, who will ensure that a guaranteed bank cheque is handed to you at the time of transfer. The transfer tax (IMT) and stamp duty (IS) must also be paid by the buyer before the deeds are signed. The document is read out loud and if necessary, translated for you by a translator, after which the seller, the buyer and the notary sign. The keys are handed over.
Capital gains tax
Taxable profit is generally the realized sales price of the property minus the purchase price of the property and a number of deductions. If the property was purchased more than 2 years ago, the original purchase price is adjusted by a coefficient for inflation between the date of purchase and the date of sale. This coefficient is set annually by the government.
Because the regulations regarding capital gains tax can change and also depend on your personal situation, we recommend that you obtain information on this from a lawyer or a tax advisor. Also consider to inform yourself by a tax advisor if you have been a resident in Portugal and the property you sold was your main residence, as you may reinvest in the EU in a new home.
If you can´t be present at the deeds and have given power of attorney to your lawyer, the lawyer will need to retain the expected amount of capital gains that you will have to pay. At this moment a tax return must be filed in April in the year after you signed the deeds. Within a few months the tax office will issue the payment instruction.