5 Steps to buying a house
2 min read
March 10, 2020
For most of the Portuguese families, buying a house is one of their main goals. However, this decision must be properly taken into consideration since we’re talking about a long-term investment.
That said, I will give a few tips that may help you in this process of choosing and buying a new house.
First, to define your indebtedness ability and the respective effort rate, you should go to your bank. This way, you can establish the maximum amount you can spend on your new house.
2. The choice
Despite what might seem, the property choice is not an easy task. Why?
First, you must choose between a new house or an older one, already inhabited by other people. If you go with the last option, it’s important to have in mind that, besides the sale value, you’ll need to consider an extra to the house remodeling, namely for water, gas, or electricity infrastructures. On the other hand, if you prefer a new house, you should take into consideration not only the project but also the construction company curriculum.
After this choice, you must choose the right typology to your household (T1 / T2 / T3) and the property’s location, taking into consideration the proximity to schools and other public infrastructures like banks, transports, etc.
All that analyzed, the next step is the visit. At this moment, you should confirm the property conditions and verify (if we’re talking about an apartment) the common and outside areas like the stairs, elevators, or the building facade.
After choosing the perfect property for you and your family, you should do the credit simulation in several banking institutions to opt for the one which offers you the best terms. However, don’t forget this is a long-term investment and that there will still be other additional expenses until the deal is closed.
4. Property documentation
With credit approval comes the analysis of all the necessary documentation to conclude the process, which means schedule the deed of purchase and sale. So, these are the documents you need to review:
- Land Registry Certificate (confirm the absence of any liens or mortgages);
- Tax Document;
- Usage License;
- Housing Technical Datasheet (if the property has a Usage License from after 2004);
- Energy Certificate;
- Right of First Refusal (in the Municipalities where it is required by law);
Once the documentation has been analyzed, and the deed is scheduled, it is time to proceed with the payment of other expenses equally necessary, as previously mentioned. So, take into consideration:
a) Settlement of the IMT (Municipal Tax on Real Estate Transfer) and Stamp Duty. These taxes must be paid prior to the deed and in this act the respective proof of payment must be presented;
Example: for the acquisition of a property in the amount of € 150,000.00 in Mainland Portugal, the overall value of Taxes is € 3,059.77 (IMT: 1,859.77€ and Stamp Duty: 1,200.00€)
b) Deed and after purchase and loan with Mortgage Registration (if you resorted to bank credit). For this, you should consider an average value of 800€, which varies by several factors like the business value or the notary.
Now it’s time to change and to enjoy your new home.