How much does it cost to sell a house?

Selling a house can become a real epic as, in addition to the headaches, this decision can prove to be quite expensive for both the owner and the buyer.

Associated with the sale of an apartment, house, plot of land or other type of property, there are several costs to consider: promoting the sale of the property (optional), registrations (such as the formalization of contracts) and the sale deed . Some of these costs are optional, for example whether you promote the sale of the house through the services of a real estate agency, or not, etc. Knowing these costs in detail will help you choose the right price for which you want to sell your home.

There are numerous underlying costs, such as advertising and marketing costs, issuing the energy certificate, commission payable to the mediation company, notary and registration costs, taxes, etc. Find out what they are in detail:

Fixed costs when selling a house

The Energy Certificate is mandatory

Firstly, to promote the sale of a property (e.g. to advertise on a website) it is essential that you have an Energy Certificate (CE), on the other hand the CE will have to appear when signing the property's Purchase and Sale Contract . This document has become mandatory for all properties that are not exempt. There are fines that can vary between €250 and €3,740 for the owner or mediator who violates this legal obligation.

The CE can only be issued by a duly accredited technician and has a cost that varies depending on the area and characteristics of the property (whether it is intended for housing, commerce or services, etc.). The CE involves the payment of registration and certificate issuance fees (between €28 and €950), plus the fees of the expert responsible for issuing the CE. Depending on these variables, the total cost can vary from €200 to more than €5,000. If an Energy Certificate already exists, it can be used as long as it has not exceeded its validity period (10 years) and the correction measures mentioned therein have already been implemented, guaranteeing a minimum certification of "B-".

How much does the Deed and records of the sale of a house cost?

There are several costs involved in formalizing and registering the sale of your home, such as formalizing contracts, writing costs, paying Stamp Tax, etc. Commissions and registration costs may vary depending on the location where it is carried out. the deed ( conservatory , ready house service, private notary , public notary , etc.). Furthermore, they also depend on the purchase price of the house, whether it is the first or second home, among other factors, as there is no previously established cost table.

Deeds can be carried out through the Casa Pronta service, at Notary Offices or at the Land Registry Offices .

The Casa Pronta service, available at a number of public one-stop shops , has the advantage of handling all the formalities associated with buying and selling a house at a one-stop shop and at lower costs, set by the State:

• €375+taxes, if only one registration is made (e.g.: most cases of purchase and sale without bank financing and most cases in which the loan for the purchase of a house is transferred from one bank to another);
• €700+taxes, if more than one registration is made (e.g.: this is the case of purchases and sales with bank financing in which several registrations are made);
• €500+taxes, if the purchase and sale of a house with bank financing is involved, in the case of using a Housing Savings Account ;
• €255+tax, if the purchase and sale of a house without financing is involved banking, in the case of using a Housing Savings Account ;

Documentation Expenses

Although smaller, it is necessary to take into account the costs associated with the acquisition or updating of several mandatory documents, which you will have to present in the Purchase and Sale Promise Contract-CPCV (optional) or at the time of the Purchase and Sale Deed :

• Property certificate, 30 euros if it is at the Registry Office and 15 euros for a permanent certificate.
• Property booklet, around 10 euros.
• Certificates issued by Municipal Councils, depend on the municipality and may cost around 15 euros each.
• Certificates of right of preference: 15 euros.

Taxes on the sale of a home

Capital gains tax

The IRS tax paid on real estate capital gains is levied on the positive difference between the sale value of the property and its acquisition value, adjusted by currency devaluation coefficients and deductions relating to property appreciation expenses (from carried out in the last 12 years), as well as expenses associated with the sale (such as commissions paid to a Real Estate Agency).

The question of the date of acquisition of the house is important to calculate the capital gains, according to Luís Lima: “The capital gains are assessed depending on the date of acquisition of the house, they only apply to properties acquired from the date enshrined in the capital gains law. worth.”

“If there is a payment of capital gains, the real estate mediation commission, if any, is also deductible from this tax”, adds the leader of APEMIP.

Calculation of Real Estate Capital Gains

Capital gains = Sale Value - (acquisition value x currency devaluation coefficient) - purchase and sale charges and charges incurred with the property's appreciation in the last 12 years (e.g. conservation/maintenance works, real estate commission on sale of the property).

In most cases, the amount subject to taxation is considered to be only 50% of the property's sales value. Capital gains are taxed at a rate of 28% under the autonomous taxation regime, or they can be included in the taxpayer's remaining taxation, applying the IRS marginal rate.

There are, however, exceptions regarding the incidence of tax on real estate capital gains. According to Law No. 82-E/2014 - Article 43 :

a) The value is fully considered (100%) in situations where the properties have received non-refundable support from the State or other public entities, and the total value of this support is greater than 30% of the VPT (Tax Patrimonial Value) of the property for IMI effects. This condition applies if the properties are sold before 10 years have passed since the date of acquisition or completion of the works;

b) In all other cases, only 50% of the value of the capital gains is considered for tax purposes.

Simply put, real estate capital gains are the profit resulting from the sale or exchange of a property. Thus, if you purchased a house for 150 thousand euros and sold it for 200 thousand euros, you may have to pay capital gains to the tax authorities, which will cover 50% of the difference, i.e. 50 thousand euros.

Exemption from Real Estate Capital Gains Tax

There are, however, situations in which the sale of a property may be partially or completely exempt from capital gains tax, namely when the amount obtained from the sale is reinvested in the purchase of another permanent home in Portugal, within certain deadlines. In other words, if you sell a house that was used for permanent housing and buy another for the same value and for the same function, you will be exempt from paying this tax.

Deco Proteste has an online simulator where you can calculate the capital gains payable to Finance. See the simulator here.

Other expenses

In addition to the previous expenses mentioned, you can also count on paying these bills if you sell your home.

• The commission payable to the banking institution for early repayment of the loan , if stated in the initial contract, depends on each bank and its respective contract. These commissions are generally around 0.5% of the amortized capital. However, since November 2022, the Government has legislated to temporarily prohibit this commission. However, the suspension of this payment was extended until the end of 2024.
• Cancellation of the mortgage at the Land Registry Office , if applicable, costs 50 euros for each act. If carried out after the deadline (60 days) it costs €100 (Article 8.º-C of the Land Registry Code), the cost doubles.

Variable costs when selling a home

Promotion of the sale of the house

This cost is very variable. If you choose to sell your house alone, the costs can be small: from a simple sign that you can place outside your property (most printers offer this service, for a cost of not much more than €20), to advertisements in a newspaper or on specialized websites ( Casa Sapo , Imovirtual , Idealista and BPI Expresso Imobiliário , etc. ) in which case you will have to invest a lot more money.

In the case of online advertising carried out through these specialized portals, costs have been rising, due to the good moment in the real estate market. Furthermore, the effectiveness of an ad promoted by an individual will always be lower than that achieved by large mediation companies that have contracts with highlights and priority visibility.

Commission payable to the real estate agency

If you choose to sell your home through a real estate agency, the first expense to take into account will be the commission to be paid to the agency when you manage to sell your home. In Portugal, “whoever sells will have to pay the commission agreed with the real estate mediation company, if the sale was made using mediation”, explains Luís Lima, president of APEMIP (Association of professionals and real estate mediation companies in Portugal) . In other words, buyers have no costs when using a mediation company, but owners do.

As a general rule, real estate agencies charge a commission of 5% on the sale price of the house to handle all aspects related to the promotion and marketing. This cost includes expenses for promoting the property (advertisements, flyers, websites, etc.), for the work of the real estate consultant, for the respective legal support, etc. It is important to note that the commission amount paid by the owner can be fully deducted from the capital gains value in the IRS declaration.

5 Tips to Reduce the Costs of Selling a House

1 - Selling directly to a private individual, without resorting to a real estate agency, is a possible option, but increasingly less common. For most owners, the added value of a consultant's work compensates for the commission paid. Not only financially, by achieving a higher price than if sold alone, but also because the headaches and risks associated with a transaction are largely offset.

2 - Try to sell through a property exchange. Through the exchange of properties, a mechanism accepted by Portuguese Law, both the owner of the first property and the second benefit from a tax discount on various taxes. In particular, the tax on capital gains and IMT will only apply to the difference between the Tax Asset Value (VPT) of both properties. Ultimately, and if both have the same sales price, there will be no tax to be paid.

3 - Keep all invoices for conservation, maintenance or improvements carried out in your home, as, if you sell within 12 years, you will be able to see this value deducted in the calculation of real estate capital gains and in the payment of IRS tax .

4 - Notary costs relating to the deed of purchase and sale of the house may be slightly reduced if you use the Balcão Casa Pronta .

5 - Professional help when selling a house has a cost, but this can be offset by other gains. The added value and competence of an experienced and proven consultant can contribute to the sale of your home for a higher price and in a shorter time . And because time is money, the longer it takes to sell your home, the more it could depreciate in value. Read my article on how to burn a property on the market . Not to mention that the commission paid to the agency is deductible from capital gains.

Consult me and you will feel the difference.