PORTUGAL LAW AND PRACTICE Contributed by: João Gonçalo Galvão, Carolina Cardoso Alves and Miguel Paquete, CS’Associados
case the owner will have to ensure the required mitigation is carried out as a legal condition for developing the asset. 2.8 Permitted Uses of Real Estate Under Zoning or Planning Law Most municipalities have online platforms that detail the land management instruments gov - erning a particular parcel of real estate, which, when combined with an analysis of the applica - ble regulations, makes it possible to understand the permitted uses. If the municipality does not have such a plat - form, it should in any case provide information to any interested parties regarding applicable land management instruments and the permitted uses, either through exercise of a right to infor - mation or through requests for prior information. Developers may enter into planning agreements with the municipality for drafting, revision and amendment of specific municipal plans. 2.9 Condemnation, Expropriation or Compulsory Purchase All public entities and concessionaires for public services are entitled to expropriate land. An expropriation procedure may be carried out by amicable agreement or in courts, and in either case requires payment of fair compensation. Once the expropriation decision is taken, the process steps are: • firstly, attempt to acquire the property by means of private law; and • secondly, request the competent body to declare the expropriation to be of public utility (with possible public takeover of the prop - erty).
Private property can also be compulsorily trans - ferred to public entities, on the basis of urgent motives and on public or national interest grounds, with its owner being entitled to suit - able compensation. 2.10 Taxes Applicable to a Transaction Asset Deals Real estate transactions in Portugal may be sub - ject to: • real estate transfer tax (RETT) – ranges from 1% to 10%, based on the value, location and use of the property, applied to the higher of the declared or tax value; • (stamp duty – fixed at 0.8%, applied similarly; and • VAT – 23% in specific cases, eg, new or renovated properties sold by VAT-registered entities. Buyers pay these taxes, along with notarial and registration fees. Share Deals RETT applies if: • over 50% of company assets are real estate; • they are not used for agriculture/industry/ commercial activities; • the buyer gains 75% control or more. RETT Exemptions or Rate Reductions There are RETT exemptions or rate reductions available for: • resale/restoration; • historic properties; and • primary residences.
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