Costs and Fees for Mortgages in Portugal
Find out the Real Cost of Buying Your Algarve Home
If you are thinking of taking out a mortgage to purchase a new home in the Algarve before you make any decisions on the Algarve property you want to buy it is wise to understand the actual cost in addition to the actual purchase price. Below we explain the approximate costs (they can differ from lender to lender), you should be aware of these costs and build them into your calculations. We have also provided a simulation for your convenience.
Firstly the costs related to buying your property in the Algarve
Property tax (IMT) is between 2% to 8% depending on location and purchase price |
Stamp Duty (IMI) 0.8% of the price of the property |
€1,200 registry, tax office fees for property deeds and notary |
€1,800 approximately in legal fees |
Secondly the cost related to taking out a mortgage in the Algarve
€290 Application fixed fee |
€280 Bank valuation fixed fee |
Stamp Duty Tax (IMI) 0.6% amount of mortgage |
€1,200 notary, registry and tax office fees for mortgage deeds |
Two Simulations Showing Related Costs and Mortgage Charges
So a simulation for buying a 200,000 euro property in the Algarve with a variable mortgage would be as below. Please note that the values are approximate and rounded up to the nearest 100 and based on being your fixed residential home but are a guide only and you would need to check with your lender to get the exact figures on your desired property.
IMT Tax | 5,000 |
Stamp Duty | 1,600 |
Property Deed | 1,200 |
Legal Fees | 1,800 |
Mortgage Application | 300 |
Bank Valuation | 300 |
Stamp Duty | 1,200 |
Mortgage Deed | 1,200 |
Total fees | 12,600 |
On top of this, you would be required to provide a deposit, based on the lowest percentage you can expect to be offered would be as follows.
For Non-residents 30%. | 60,000 |
For Residents 10%. | 20,000 |
Also please note the deposit is worked out on the bank’s valuation of the property and not the sale price of the property. Hence if the valuation is lower than the asking price you would also need to find the shortfall.
Unfortunately the higher the purchase price the higher the rate of the IMT tax. To give you an idea we have provided a simulation of a property with a purchase price of 400,000 below.
IMT Tax | 20,000 |
Stamp Duty | 3,200 |
Property Deed | 1,200 |
Legal Fees | 1,800 |
Mortgage Application | 300 |
Bank Valuation | 300 |
Stamp Duty | 1,700 |
Mortgage Deed | 1,200 |
Total fees | 29,700 |
Then the deposit
For Non-residents 30%. | 120,000 |
For Residents 10%. | 40,000 |
So as you can see the cost increases by around 2.5 times. And so it goes on, the higher the purchase price the higher the cost of the taxes.
The Conclusion
Should you still be looking for your perfect Algarve property feel free to browse our fantastic selection on offer?
If you would like to find out more about the costs of taking out a mortgage in Portugal you can contact us here at Gatehouse International where we have specialists in this field who can help you to purchase your Algarve property whatever your situation.
"Gary Thomas" - Gatehouse International Algarve
Gary Thomas é o Managing Partner da Gatehouse International Algarve, com sede em Almancil, perto dos resorts de luxo de Vale do Lobo e Quinta do Lago. Com mais de 25 anos de experiência no mercado imobiliário e financeiro do Algarve, Gary supervisiona a promoção e venda de propriedades, oferecendo conhecimentos valiosos a clientes de todo o mundo.
