Bureaucratic jungle in Portugal? The most important offices in the context of emigration and real estate acquisition

In this blog post you will find out more about the most important authorities involved in the process of buying a property and also moving to Portugal and what the terms NIF, NISS and IMT are all about.

Portugal is a popular destination, both for real estate investors and expats of different ages, or for those of retirement age who want to spend the winter months in a moderate climate on the Atlantic Ocean and stay in their home country during the summer. 

However, before the dream of owning your own property in Portugal becomes reality, or before you move to Portugal without having your own property, it is important to understand the processes involved and to get to know which office is the right one for your concerns.

1. Tax Office (Finanças):

The tax office plays a very central role in Portugal.
All applicable taxes in Portugal are levied here. Both those that arise in the context of the purchase of real estate, such as the real estate transfer tax (Imposto Municipal sobre Transmissões Onerosas de Imóveis - IMT) and the stamp duty (Imposto de Selo) as well as current property tax (Imposto Municipal sobre Imóveis - IMI).
Furthermore, however, all taxes related to private or business income.

In order for taxes to be settled, you must first register with the tax office. This is done via a Portuguese Tax Identification Number (Número de Identificação Fiscal – NIF). This applies to private individuals and also to Portuguese companies.
In Portugal, the tax number or NIF plays a much greater role than in Germany, for example. It is stored and queried in significantly more situations. This is also the case, for example, when concluding a mobile phone contract.

In summary: without a tax number, no real estate purchase, no long-term rental, no Portuguese bank account.

To apply for a Portuguese tax number from abroad, you will need a representative in Portugal. They can do the application, the process is then very quick and easy and can even be done online. Normally real estate buyers hire a lawyer along the entire process after selecting a property. They will then also apply for the tax number for you. However, we are also happy to provide support on the subject of "Finanças".

A department within the tax office is responsible for the official valuation of all real estate (Valor Patrimonial), on which the annual property tax (IMI) is based. It should be noted that this valuation of the property is calculated according to a specific formula and, according to experience, cannot be used to determine the actual or current market value at the time of the real estate transaction. This is also due, for example, to the fact that the fiscal assessment is not updated annually. The valuation filed with the tax office is listed in the extract from the tax register (Caderneta Predial). This document also contains information on the location, size and development of the property.
The annual property tax (IMI) is between 0.3 and 0.45% of the calculated property value of the tax office for urban properties and up to 0.8% for rural properties. After all, the specific percentage also depends on the location of the properties.

By the way: The tax office offers a variety of useful functions on their website, after you have a tax number and have applied for access. Often, an on-site visit is no longer necessary.

And another note: we will go into more detail about the ancillary purchase costs incurred when buying real estate and how you can determine them for yourself in a later blog post.

2. Municipal Administration (Câmara Municipal):

The municipal administration has a variety of tasks related to the organization and design of the living space of the municipal area. Examples include organizing the cleaning of streets and garbage dumps, building schools, planning green spaces, and cities as a whole. Thus, the municipalities are also responsible for approving building applications or modification applications, as well as for issuing residential licenses after construction is completed.

In addition, it is responsible for the residence permit (Residência). 
This brings us to another important point. In general, every EU citizen has the right to reside in another EU Member State. If you decide to establish your permanent residence in Portugal, you are obliged to apply for the so-called "Certificado de Residência" in the municipality after three months of residence. This certificate is then valid for a stay of up to 5 years.

At the end of these 5 years, you have the of permanent residence and receive a so-called permanent residence card (Cartão de Residência Permanente). This must be applied for, if this is not done, this would be a violation of the law. With the Cartão de Residência Permanente, you have a universal Portuguese identity card.

3. Land Registry (Conservatória do Registo Predial):

Another important office is the Land Registry, which is responsible for registering ownership rights to real estate.
Before the purchase is made, it is essential to check the land registry (Registo Predial) to ensure that there are no encumbrances or mortgages on the property and that the seller can also prove that he is the owner of the property. This step ensures a clear transfer of ownership later in the course of the notary appointment.

Already when marketing a property through an estate agent, the seller is obliged to provide a corresponding document.

The document can be applied for in person at the office or online at www.predialonline.pt , provided that the applicant has a corresponding certificate. Lawyers can easily do this. This is also possible with a" Cartão de Cidadão" (a card that every Portuguese receives and which contains a wide variety of information) or with a "Chave Movel Digital" (an online certification, which can also be applied for by non-residents in the municipality / Câmera).

In the portal of the Land Registry you can also view certain information about the Land Registry directly. Unfortunately, the website is only available in Portuguese, but you can remedy this with the automatic translation functions of the browser.

4. Social Security (Segurança Social):

Social Security is responsible for registering employees and providing social benefits. If you work in Portugal, you must register with social security to be eligible for benefits such as healthcare, unemployment benefits, and pensions. This is also necessary for the registration of children in kindergarten and school. 

The official homepage of the Segurança Social is also available in English: https://en.seg-social.pt/homepage

In order to benefit from the services of the Segurança Social, you must register for a Número de Identificação de Segurança Social (NISS), the so-called social security number. It is used to uniquely identify persons in the Portuguese social security system. 

Applying for the NISS number is comparatively simple, free of charge and can be done online using a form. 
You will then receive a confirmation by e-mail within 1-3 days to pick up the NISS directly at the social center. It is best to make an appointment by phone to avoid long waiting times.  The telephone number can be found on the document sent to you. 

The NISS can then be used to register for public health care. You will need the NISS, an identity card and the Portuguese residence permit (Certificado de Residência). With these documents, you can apply for a free health card (Cartão De Utente) at the local health center (Centro de Saúde).
You can also find more information on the online portal of the National Health Service (Servico Nacional de Saude): https://www.sns.gov.pt/
There you can register to apply for prescriptions, make appointments online, etc.

Unlike in Germany, for example, where there are many different health insurance companies, there is only one centrally regulated health insurance in Portugal. Of course, you can also take out private health insurance in Portugal, which covers more healthcare services.

We hope that we have given you an understanding of the most important offices and their responsibilities so that your dream of owning a property in Portugal can become a smooth reality. If you have any further questions or need support, please do not hesitate to contact us.

Legal notice: The information presented here is not legally binding and no legal claim arises in the event of errors. If you have any legal questions, we recommend consulting a lawyer.