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How to sell your property in Portugal

Selling a property in Portugal is no simple matter. The process can be stressful even in your home country, so closing the deal in a market that’s foreign to you is even harder. Mistakes can quickly add up. As an owner looking to sell, you are regularly faced with the question of hiring real estate agents to help. At Pearls of Portugal, we put your needs before everything else and get the sale done for you quickly and easily. We play a central role in the mediation between the owner and all potential buyers. Plus, we provide first-class sales support in your various languages.

Preparing the property for sale, determining the right price, promoting to possible purchasers, and following legal regulations are some of the most crucial aspects in this process. Selling a house in Portugal can be simple and easy, with the correct strategy. When you sign with Pearls of Portugal, you won’t have to worry about a thing. We draw in both national and foreign investors and prepare your property in order to make it all the more attractive to them.

Helena Castro, Head of Client Management

Why should I sell my property with Pearls of Portugal?

Extensive knowledge of the Portuguese real estate market: working within the market every day enables us to offer accurate property valuations and insightful advice, ensuring you get the best possible outcome in your property transactions.

We are an experienced, professional and local team, dedicated to providing exceptional service, personalized strategies, and expert guidance to help you achieve your property goals with confidence and ease.
Our national and international network of potential buyers and other agents, increasing the visibility of your property and the chances of a quick sale.

Detailed marketing plan, providing you with a transparent and effective communication of the process, which allows you to save significant time and effort.

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What is included in the Pearls of Portugal selling service?

We have a team of experienced professionals ready to help you every step of the way. Pearls of Portugal understands the national real estate market, as well as Portuguese laws and customs. We offer our clients an extensive and unique range of services:

Personal advisor throughout the sales and after-sales process;

Connection with buyers and investors from different countries;

On-site visits or/and virtual tours;

Marketing strategy to promote your property on our website, newsletter and social media;

Professional evaluation of the property to achieve the optimum selling price;

Property due diligence with experience legal team;

Preparation of energy certificate;

Preparation of all the necessary documents and contracts;

Provision of sales material;

Online placement on all relevant real estate platforms in Portugal;

Professional photos;

Coordination of notary appointments;

What documents do I need to sell my property in Portugal?

Before selling your house or apartment in Portugal, you must have all the necessary documents, such as:

The Deed

Certificado Energético (Energy certificate)

Payment of property tax

Caderneta Predial (Certificate of Title)

Certidão Permanente de Registo Predial(Land Registry Certificate)

Licença de Habitação (Residence permit)

Ficha Técnica da Habitação (Housing technical file)

Declaration of co-ownership

Mortgage documents

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Sales timeline with Pearls of Portugal

Selling Timeline

What is the process of selling a property in Portugal?

The process of selling a house in Portugal involves two main legal steps: the Promissory Contract of Purchase and Sale (CPCV) and the Public Deed of Purchase and Sale. 

The CPCV sets out the conditions of the sale and serves as a legal commitment for both parties, guaranteeing that the transaction will be completed according to the agreed terms.

As seller the right to receive the agreed payment in accordance with the CPCV, the responsibility to deliver the property as agreed and to supply all the necessary documentation. The Public Deed of Purchase and Sale formalizes the transfer of ownership and is the legal document that formalizes the sale of the property.

Working with a Real Estate Agent/Broker in Portugal

Signing the CMI

A real estate mediation contract, the CMI (Contrato de mediação imobiliária) is a contract by which a company duly authorized to practice real estate mediation in Portugal seeks, on behalf of its clients, receivers for the realization of deals aimed at the constitution or acquisition of real rights over real estate, the exchange or rental thereof, the assignment of positions in contracts having real estate as their object, etc. You must sign this document when you’re working with a real estate agent or broker in Portugal.

What’s included in the CMI contract in Portugal

The real estate mediation contract is drawn up in writing and must contain the following elements:

  • Identification of the characteristics of the property, with specification of all the encumbrances incumbent upon it;
  • Identification of the company;
  • The company’s remuneration conditions, in fixed or percentage terms, as well as the method of payment, with an indication of the applicable VAT rate;
  • Identification of the liability insurance or financial guarantee or equivalent instrument, indicating the policy and the insurance entity or, where applicable, the capital guaranteed;
  • Identification of the real estate agent involved in preparing the contract;
  • Detailed identification of any ancillary services to be provided by the company;
  • Reference to the exclusivity regime, where agreed, specifying its effects for both the company and the customer.

Selling property in Portugal: Taxes

Capital gains tax

When you sell a property at a higher price than what you paid for it, the profit you make is considered a ‘capital gain’. In Portugal, this gain is subject to capital gains tax. But don’t worry, the process isn’t as terrifying as it sounds.

As a resident, you’ll be pleased to know that only 50% of your gain is taxable. What’s more, if you’ve owned your property for more than two years, you may be eligible for inflation relief. And for properties acquired before 1989? You’re in luck – these aren’t subject to capital gains tax at all.

The taxable amount from your property sale is added to your other income for the year, which is then taxed based on the progressive income tax rates, which currently range from 14.5% (for income under €7,479) to 48% (for income over €78,834). 

Main Residence Reliefs

The Portuguese tax system offers several reliefs, or ‘rollover rules’, that can help you avoid or reduce capital gains tax. These reliefs come into play when you sell a property that has been considered your primary residence.

One relief involves reinvesting in a new main home. If you sell your primary residence in Portugal and reinvest the proceeds (net of any mortgage used to acquire it) into another primary residence, you could be exempt from capital gains tax. This exemption isn’t automatic, though.

You must declare the reinvestment amount on your tax return (IRS) for the year you sell the property. Also, the new property must be in the EU or a European Economic Area (EEA) country that shares tax information with Portugal.

Time and Ownership Matters

When it comes to this exemption, timing is everything. You must purchase your new residence within 36 months of selling the first residence or 24 months before. Additionally, you should move into it within six months of the three-year limit to avoid any due taxes.

Ownership is equally important. The property must be registered in your name, and it’s advisable to have a clear record of it being your address with the local authority, utility companies, and on tax returns.

Reinvesting in a Pension Plan

Another interesting exemption route when selling a house in Portugal is through reinvestment in a long-term savings plan or pension. This benefit can be a boon if you’re retiring or are over 65 years old.

Here’s how it works: After selling your property, you can reinvest the proceeds into a pension fund, state pension system, or insurance contract within six months. Similar to the property reinvestment route, you need to indicate your intention to invest the funds in your tax return for the relevant year.

There’s a catch, though – when reinvesting in a pension, you should receive a maximum annual payment of 7.5% of the value of the funds. And remember, the property sold needs to be in your name.

Capital Gains Tax Portugal: Non-Habitual Residents (NHR) and Their Tax Status

If you hold NHR status, you could avoid capital gains on certain foreign source gains, depending on the double tax treaty terms with your home country. This means if the gain is taxable in your home country – as is the case with UK real estate, for example – you won’t be liable for tax in Portugal.

However, these gains are ‘exempt with progression’, meaning they’re added to your annual taxable income to calculate your effective Portuguese tax rate.

Helena Castro
Helena Castro, Head of Client Management

Sell your property the best way in Portugal.

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So, you’ve sold your property in Portugal. What are the next steps?

  1. Receive Final Payment: Check that payment of the agreed amount has been received.
  2. Transfer the Property: Confirm the registration of the transaction in the Land Registry.
  3. Declare the Sale to the Tax Office: Fill in the IRS declaration and check the IMT situation.
  4. Cancel Accounts and Services: Close or transfer water, electricity, gas, internet, and telephone accounts.
  5. Inform Financial Entities: Communicate the sale to the bank and update your address.
  6. Keeping Documents: Archive sale documents and receipts.
  7. Review Tax Situation: Make sure all taxes have been paid.
  8. Consider Reinvestment: Explore options for reinvesting the money from the sale.

Frequently Asked Questions (FAQ)

Portuguese real estate brokers are subject to the legal regulations of IMPIC (Instituto dos Mercados Públicos, do Imobiliário e da Construção) and must hold a valid AMI license. Real estate agents are required to indicate their license in all commercial communications and are also obliged to do so when organizing visits with potential investors.

In Portugal, an agent’s commission is generally 5% and included in the sale price. However, there are no legal restrictions on the fees that can be charged. Real estate agents are paid exclusively by the seller, so there is no sharing of mediation costs between buyer and seller.

The Portuguese real estate agent’s activities include, for example, implementing appropriate advertising measures at his own expense. In return, the customer waives the right to involve other real estate agents or third parties. In the case of an exclusive contract, the real estate agent puts all his experience, contacts and knowledge of the market at his customer’s disposal, as well as his knowledge of the procedures involved in a real estate transaction.

Ask the buyer for proof of payment or check directly with the Tax Authority.

A lawyer can help with tax, financial or legal issues, but hiring one is not obligatory. When you work with an experienced company like Pearls, for example, there’s no need for one.

When you work with Pearls, we evaluate your property and advise you regarding the appropriate selling price. We assess this through researching the local market, drawing comparisons to similar properties and taking into account the property’s surroundings, for example.

Sellers must pay capital gains tax, the real estate agent fee (if applicable) and legal fees. Tax rates may be different for non-residents.

Yes. But while residents are taxed on 50% of the gain at their marginal income tax rate, non-residents are taxed at a flat rate of 28%. However, there are exemptions and exceptions.

This depends on the attractivity of your property, the state of the market, and the price you’re asking for. Usually, an average property will take a few months to sell.

Yes. However, the rental contract must be honored. There’s simply an exchange of landlords – the tenant is not involved in any way.

Yes, 99% of the time buyers will make offers. You should take this into account when deciding your price.

Frederik Pohl
Frederik Pohl, CEO
Sell your property the best way in Portugal.
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