Couple of corrections, Glynner, if I may be so bold
If the vendor pulls out once the promessa (initial contract) is signed they have to pay DOUBLE the 10% deposit so there is a big disincentive for them to withdrawn.
Not sure where the €10-12k for legal and notary fees comes from! On the two houses I've bought the legal and notary fees were less than €2000 in total (per transaction). Perhaps you were including Stamp Duty? This is on a sliding scale depending on the price of the property and whether it is to be a main residence or a holiday home;
Resale properties - including ruins, land, old houses - are subject to Imposto Municipal Sobre as Transmissões (IMT) tax. This must be paid up to three days prior to Escritura. The level of tax levied is on a sliding scale and is a percentage of the purchase price.
If the property is your sole residence then the taxes are levied as follows:
Primary Residence
under 92,407€ 0%
92,407€ - 126,403€ 2% minus 1,848.14€
126,403€ - 172,348€ 5% minus 5,640.23€
172,348€ - 287,213€ 7% minus 9,087.19€
287,213€ - 574,323€ 8% minus 11,959.32€
Over 574,323€ 6%
If the property you are purchasing is a second property such as a holiday home then the taxes are calculated as follows:
Second (Holiday) Home
under 92,407€ 1%
92,407€ - 126,403€ 2% minus 924.07€
126,403€ - 172,348€ 5% minus 4,716.16€
172,348€ - 287,213€ 7% minus 8,163.12€
287,213€ - 574,323€ 8% minus 11,035.25€
Over 550,836€ = 6%
Agricultural (rustico) is charged at the flat rate of 5%, whereas Urban land (urbano) is charged at a rate of 6.5%.
If you are unsure how much the IVA or IMT will be, it is advisable to check with the local Finanças before you enter into a Promessa Contract.
*The above figures were current as of January 2011.
Taken from
www.gekkoportugal.com - also contains lots of other useful info.
Finally you are not required to make wills, although it is of course a good idea.
HTH
Sarah W
P.S. A good percentage of solicitors here speak good or passable English and google translate is your friend