Property Ownership Costs | Inheritance Issues

Succession Laws:

Portuguese private international law provides that, on a succession, the personal law of the deceased at the time of his/her death is applicable. The personal law is the national law of the deceased person. In the case of stateless persons the law of the place of usual residence applies.

Portuguese law distinguishes between public and private wills. The public will is made by a public declaration, which is drafted by a notary. The private will is prepared and signed by the testator, and must be accepted formally by the notary. The private will can be placed in the custody of a notary. Portuguese law does not recognize simple holograph wills.

Inheritance Tax:

Residents of Portugal are subject to taxation on inheritances and gifts know as stamp tax (imposto de selo). The free transfer of land in Portugal is subject to stamp tax of 10% of its fiscal property value. In the case of gifts, there is an additional charge of 0.8% on top of the 10% stamp tax.

Stamp tax is not payable when a property is passed to a member of your immediate family (spouses, children and parents). For this reason, it is recommended that you make a specific will upon arrival in Portugal.

Stamp duty is applicable only on free transfers to natural persons. If the gift is to a company, the capital gain will be taxed within the framework of corporation tax. The free transfer of shares in a company is not subject to stamp duty in Portugal, if the owner is not resident in Portugal .

As with anything which is so technical, it's advisable to consult a specialist in international taxation to make sure your interests are adequately protected.

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