Everything you need to know before buying or selling

The CPCV (Promissory Purchase and Sale Contract) is the contract by which buyer and seller formally commit to signing the final deed. It does not yet transfer ownership, but creates legally binding obligations for both parties. It is typically signed after bank credit approval and before the deed.

What it must contain

• —Full identification of buyer and seller
• —Complete description of the property (address, land registry article, areas)
• —Agreed price and payment method
• —Value of the deposit paid
• —Deadline for signing the deed
• —Penalties in case of default by either party
• —Suspensive conditions (e.g. subject to credit approval)

The deposit

The deposit (sinal) is the amount paid by the buyer as a guarantee. It typically represents 10% to 30% of the sale price, but can be freely agreed between the parties.

The escritura (deed) is the notarial act that formalises and transfers property ownership. It is signed at a notary or at a Balcão Casa (IRN service) and is mandatory for the transaction to be legally valid and registerable.

Required documents

IMT is paid by the buyer before the deed. It is calculated on the higher of the declared purchase price and the property's Taxable Patrimonial Value (VPT). Rates vary according to property type and purpose (primary residence, secondary home or other).

Rates for primary residence (urban property)

Stamp Duty applies to acts, contracts and financial operations. In a property transaction it arises at two distinct moments: at the purchase deed and, if there is a mortgage, at the credit agreement.

IMI is an annual tax collected by the municipality where the property is located. It is levied on the Taxable Patrimonial Value (VPT) determined by the Tax Authority, not on the market price. Each municipality sets its rate annually within a range defined by law.

Exemption for primary residence

You may benefit from a temporary IMI exemption for 3 years if the property VPT is equal to or below €125,000 and the household's taxable income does not exceed €153,300. The exemption must be requested from the Tax Authority after acquisition.

The monthly mortgage payment is made up of two parts: the reference rate (index) and the bank's spread. Understanding how each element works is essential to choosing the most suitable financial product for your profile and time horizon.

Variable rate vs fixed rate

Key concepts

• EuriborEuropean interbank rate used as the index for variable-rate mortgages. Changes daily and is published by the ECB.
• SpreadThe bank's margin on top of the index. Reflects the client's credit risk and varies according to LTV and financial profile.
• TANNominal Annual Rate — sum of the index and spread. The basic rate of the loan.
• TAEG / APRAnnual Percentage Rate — includes TAN, compulsory insurance, commissions and other charges. The true cost of the credit and most relevant for comparing offers.
• LTV (Loan-to-Value)Ratio of the loan amount to the property value. For primary residence, banks typically finance up to 90%; for secondary homes, up to 80%.
• DSTIDebt service-to-income ratio — percentage of net monthly income committed to credit payments. The Bank of Portugal recommends a maximum of 35–40%.

In addition to the acquisition price, a property transaction involves a set of additional costs that should be budgeted in advance. We present indicative estimates for a primary residence.