Madeira real estate agents with a valid AMI number
Madeira real estate agents practicing with a valid real estate agent licence were only 70 as at 30.11.2006.You may verify the the validity of the Madeira real estate agent,s licence you decide to work with by clicking on IMMOPI website, (now known as INCI) , where all licenced Madeira real estate agents are listed.These agents are also in possession of an obligatory Insurance Protection Policy which will protect both buyer and seller in the event of a possible dispute arising out of the negotiations.
Inspections
Once you have decided on the right Madeira real estate but would like to have it inspected by another independant professional, your Madeira real estate agent or a Financial Services Specialist on property in Madeira will guide you to some of the local banking institutions which offer this service at a price -it can vary between 200€uros and 600€uros depending on the value of the property in question. This will will not only provide you with "peaceof mind" but will also reflect the general condition of the property as well as give you an indication of a reasonable market related value. I recommend this as it will be well worth your investment !
Municipal Town Planning Offices
Your Madeira real estate agent if necessary should verify with the local municipal town planning offices in order to acertain whether there are any possible and/or pending plans for "highways"
to be erected close to or on the property in question. Make sure that any recent alterations which have been effected on the property have been legally approved by the Municipal Authorities.
Solicitor
It is advisable to appoint a local lawyer/solicitor that specialises in Madeira real estate transactions .There are approximately 500 solicitors in total on Madeira island - many of whom are excellent professionals in their field.
LEGAL DOCUMENTATION REQUIREMENTS
The following legal documentation is required when buying Madeira real estate and your solicitor will give you the necessary advice therein:
PERSONAL FISCAL NUMBER (Numero fiscal de Contribuinte)
You will need to be in possession of a Portuguese Fiscal Tax Number which can be obtained upon request at the Local Tax Offices.
BUYING AND SELLING CONTRACT (Contrato promessa compra e venda)
This contract may be prepared by your Licenced Madeira real estate Agent and thereafter duly approved by your appointed solicitor prior to your signing same. This document is signed by both the Seller and Buyer and will stipulate all terms and conditions pertaining to the transaction. A deposit which may vary between 10 and 30% must be lodged. According to Portuguese law, if the buyer defaults, he loses the deposit completely. On the other hand, if the Seller defaults on the contract, he will have to refund the purchase the equivalent of DOUBLE the initial deposit paid by the purchaser. The Buying and Selling contract must always be signed in the presence of a Notary.
REGISTRATION CERTIFICATE (Certidão de Teor)
This certificate has a full description of the property´s registered legal history and will reflect any registered mortgages, servitudes, usufruct clauses etc. The certificate is obtained at the Local land Registry Offices (Conservtória do Registo Predial) and is normally issued with a validity date.
REGISTRATION CERTIFICATE (Caderneta Predial)
This official document duly identifies the property not only by a unique fiscal tax number, but also reflects the description of the property (size, areas, nr of rooms and history). Furthermore, it identifies the owner and displays his/her Fiscal Tax number.
MADEIRA REAL ESTATE USAGE LICENCE (Licenca de Utilização)
This Licence is proof that the property has been aproved for the purposes of which it is being used for - ex. residential use or comercial use (whichever the case may be.)
MADEIRA REAL ESTATE ESTATE FINAL DEED (Escritura)
When all conditions as set out in the original Buying and Selling Contract have been met with, the Final Deed is drawn up and signed by both parties at a Public Notary Office. This is effectively the final Purchase and Sale Contract. It is at this time that the final payment is usually effected. This is after the Notary Public Officer has witnessed the act and has ascertained and verified all the legal aspects of the entire transaction, including ascertaining the payment of the applicable purchase tax (IMT) and that all parties are in agreement with all the terms and conditions of the transaction. The Original Escritura is then held by the Public Notary Office and a copy registered at the Public Records Office. The purchaser obtains a certified copy of the Escritura when applying for the connection of all respective service facilities at the local Municipal Offices.
MADEIRA REAL ESTATE REGISTRATION (Registo)
Registration is in fact the final procedure of registration of the purchase which is done with the Land Registry Offices (Conservatório do Registo Predial) in the area in which the property in question is located as well as at the local Tax Revenue Offices (Repartição de Finanças).
There will be purchase costs payable upon registration which will include registration costs, stamp duty, notary fees and other sundry costs.
MADEIRA REAL ESTATE PURCHASE RELATED COSTS AND TAXES
TRANSFER TAX - IMT
Since January 2004, transfer tax is now known as IMT ("imposto Municipal sobre transmissões onerosas") and is calculated on the highest of the two taxable values (either on the newly predetermined taxable value or on the purchase price value.):
-Residential (villas and apartments) 0-6%
-Agricultural land - rustic property 5%
-Urban, construction land or commercial 6,5%
-Only when purchaser is domiciled in a tax haven territory known as off-shore - 15%
MADEIRA REAL ESTATE EXEMPTION OF IMT TAX:
Urban or residential property valued up to €100 000 Euros.
Table of IMT TAX on Madeira real estate
|
Value of Residential Property
Up to €106,875.00 |
% Tax
1% |
Amount Deductable
|
|
From €106,875.01 up to €146.500.00 |
2% |
€ 1.069.00 |
|
From €146.500.01 up to €199,750.00 |
5% |
€ 5,464.00 |
|
From €199,750.01 up to €333,000.00 |
7% |
€ 9,459.00 |
|
From €333,000.00 up to €638,750.00 |
8% |
€ 12,789.00 |
|
Over and above €638,750.00 |
6% ONLY |
|
For Example: For a property price of €150,000 00 :
€ 150.000,00 x 5 % = € 7..525,00
€ 7.525,00 - € 5,464.00 = € 2,061.00 IMT Tax payable
STAMP DUTY - 0.8% on purchase price of Madeira real estate
ANNUAL MUNICIPAL TAX ON MADEIRA REAL ESTATE- IMI TAX
Since January 2004 annual taxes on property are now called IMI (Imposto municipal sobre imoveis) and is calculated on a market related evaluation by the municipality where the property is located.
-Rustic and Agricultural land - 0.8%
-Urban (houses, construction, land) - 0.4% to 0.8% (Funchal = 0.8%)
-New property registered after 13/11/2003 - 0.2 to 0.5% (Funchal = 0.35%)
Example: New property with a value of €125 000 will be subject to an annual tax of €437.50 p.a.
Residential property valued up to €225 000 may be exempted for 3 - 6 years.
Property owners of older properties can contest the new valuation and demand a re-valuation and if necessary, impose legal action.
INHERITANCE TAX
Effective 1st January 2004, inheritance tax has been abolished in Portugal. There is still a 10% stamp duty charge though on transfer of assets. Gifts/donations to a spouse (husband or wife), children, parents or grandparents are exempt.
CAPITAL GAINS TAX
There is a flat 25% tax levy on all capital gains effected by non-residents.
EXAMPLE OF MADEIRA REAL ESTATE PURCHASING COSTS :
| Property priced at :- |
€200.000,00 |
€625.000,00 |
€1 000,000.00 |
|
Registration Fees - fixed cost |
125 |
125 |
125 |
|
Notary Fees (fixed cost) |
175 |
175 |
175 |
|
Lawyer´s Fees (average 1500.00euros) |
1.500 |
1.500 |
1.500 |
|
IMT Tax (refer to the above table ) |
4,541 |
37,211 |
60.000 |
|
Stamp Duty (0.8% fixed cost) |
1.600 |
5.000 |
8.000 |
|
TOTAL COSTS |
€7.941 |
€ 44.011 |
€ 69.800 |
Please note: Sundry Disbursements costs (stamps & postages, copies etc.) approx €60
Check before you buy a used Madeira
real estate condominium / apartment / townhouse
If you are interested in a resale (used) condominium apartment , here are some questions you may consider asking your Madeira real estate agent before you buy:
1. How old is the building ?
2. Is it soundproof?
3. Is there a parking space and storage space included in the purchase price? If so, ask to view them.
4. Is there guest parking available and what are the conditions ?
5. Is the use of recreational facilities available ? Are they open to the public or residents only of the building?
6. Is the unit close to noisy areas (like elevators or garbage disposal area?)
7. What appliances or fixtures are included in the purchase price ?
8. Are pets allowed to be kept in the building?
9. You may want to know if there are restrictions on whether your unit can be renovated or leased?
10. Have your lawyer/solicitor or Agent give you a copy of the Rules & Regulations of the condominium "Regulamento to Condominio"
11. Make sure that the condominium is solvent and financially stable and has a "fundo comum de Reserva" - which by law is an obligatory savings account reserved for maintenance expenditure of the building (the property has to be updated minimum every 8 years).
12. What is your monthly condominium fee and what is included? Normally property taxes, water, electricity and gas consumption are excluded. (Make certain that condominium fees are paid by the seller up to date of registration.)
13. Insurance: Is the building adequately insured (is the unit's replacement value covered) on your monthly condominium fee ?
New Consumer Protection Law as at 25th March 2004
New regulations in property management determine that any new home in Portugal possessing a habitation licence aquired after the 30th of March 2004, a "technical identification certificate" has to be provide in which all the details and characteristics of the home are duly specified.
Decree Law 68/2004 of 25th of March2004 compels every property manager to provide buyers an "identification certificate" of the property formally known as the Technical Description of the Property Certificate.
This document is mandatory and required upon signature of deeds and during contracts of mortgage for habitation are concluded. Without this document, the notary will not authorize the signature of the deeds.
The Technical Description is also applicable to clients who wish to rent an apartment or Vila. It is not applicable to properties where the habitation licence was acquired prior to the 30th of March 2004 and on properties built up till 1951 - date upon which the habitation licence first became a mandatory document.
The Technical Description of the Property must contain details on the intervenient professionals such as the builder, architectural and structure project authors responsible for the construction works as well as property managers. It also includes technical data regarding plot, urban property and apartment, duly identifying the respective area and full description of the building materials and brand utilised for same.
This regulation establishes a series of obligations on those professionals involved in building and construction of properties for habitation purposes, namely building contractors, people responsible for the construction itself and property management companies as well as Madeira Real Estate agents, hereinafter referred to as the Property Manager, who will be obliged to:
§ Draw up and provide buyers a standard document containing a full description of all the main technical characteristics of the property, duly detailed right up to the time where the construction and/or reconstruction of the property took place as well as any subsequent alterations effected on same property which have been concluded.
§ In the event of a property is not yet completed, a provisional/temporary such document has to be provided.
§ Lodge the Technical Description Certificate at the local Town Hall/Municipality prior to the deeds being signed.
§ Verify all the Description content information ascertaining that same corresponds to the actual characteristics of the property at the time the building construction has been completed.
This Certificate will have to adhere to several legal requirements with a minimum number of information required which will eventually be accompanied by other additional information such as:
§ Details of the principal parties involved in the actual project, construction, reconstruction, alterations, sale of - plot, urban property, apartments, flat or villa.
§ Details of property guarantees and action procedure to be taken in the event of the presence of any defects in the building construction
§ In the event of a condominium – all respective condominium rules to be specified including maintenance and equipment rules.
ADDITIONAL INFORMATION REQUIRED:
§ In the event of property having been marketed publicly, the seller, Madeira real estate agent or property professional involved will have to provide the following :
§ Copy of the provisional Technical Description Certificate
§ The price per m2 of utility area/space of the property
§ Property Price
§ Authentic copy of the Property Project
§ Construction Licence and completion date reference details in the event of properties still under construction
§ Advertising of property in adherence to the Local Advertising Code of conduct and in accordance to the particular property characteristics.
§ In the event of a property still under construction, notice to all interested parties stipulating :
o Property Manager and Seller identification –in the event of these not being the same person
o Project completion date
o Full Habitation utility rights description
o Building material and product brands used in the construction of the project
o Any disabled//handicap access facilities
Failure to provide the buyer with the above document will result in non-authorisation of signature of deeds by the notary.
This law is also applicable to private parties where there may already be an existing description of the property.
in the event of a Mortgage Bond, the bank will have to ensure the delivery of the Techinical Description Certificate to the buyer at the time the provisional registry is requested.
EXEMPTION
This Description Certificate is not applicable to:
§ properties built before 1951
§ properties built and subject to an existent habitation licence or to which there is an existing request for a habitation licence prior to the 30th of March 2004
NON-COMPLIANCE LIABILITY :
1. Imposition of fines
2. Closing of facilities for a determined period of time which could range up to two years and will include a prohibition order of practice of same activity for the same period
3. Joint and several liability on the onus of all the technicians and professionals responsible for the project construction, together with the property manager; excepting where the construction works on the property are undertaken by the property owner after the emission of the Technical Description and provided all the characteristics contained in said description are not the same as those on the previous document.
Disclaimer: Whilst every effort has been taken in drawing up these tips and information, these are only to be used as a guideline as each individual's circumstances differ accordingly.
MADEIRA REAL ESTATE FOR SALE |