Unlocking Portuguese Property: The Promissory Contract (CPCV)
Navigating the Portuguese property market? The promissory contract (CPCV) is your key. While not always mandatory, it’s a common safeguard in the property purchase process. Think of it as your ‘peace of mind’ contract when:
- Securing your dream property while waiting for loan approval.
- Investing in a property still under construction.
- Bridging the gap between selling your current home and buying a new one.
- The seller is finalizing property licenses.
Consider the CPCV your preliminary agreement for buying property in Portugal. It carries legal weight, even without a notary present. Registering the CPCV is possible, though less frequent. Should you choose to do so, be aware that the Real Estate Transfer Tax (IMT) becomes payable and is refundable within 30 days if the sale falls through.
A typical deposit is around 10% of the property value. Crucially, the seller must provide the property’s energy certificate and a land registry extract within the CPCV.
The CPCV often includes a timeframe for finalizing the purchase agreement with a notary. This period, usually 2-3 months, is negotiable. The preliminary contract will clearly spell out any critical clauses or conditions relevant to the purchase.
Withdrawing from the purchase without valid reason? The buyer risks losing their deposit (around 10%). On the flip side, the seller is legally bound to refund double the deposit amount to the buyer if they fail to uphold the preliminary agreement. Also, the Preliminary contract, the seller must specify and list all tenants currently at the property.
Decoding the CPCV Structure
This contract starts by defining the roles of the buyer and seller, details of the property, the agreed-upon price and payment plan, penalties for breaches of contract, the amount of the deposit, and any specific conditions of the deal.
In a nutshell, if the seller breaches the CPCV, they must return double the deposit to the buyer. Conversely, if the buyer backs out, they forfeit the deposit paid during the CPCV signing.
