“After mourning and drying your tears, it's time to make decisions,” as lawyer Ricardo Matos Fernandes says in this article, prepared for idealista/news, which “aims to help those who are going through this moment, and aims to be a possible path towards a good and correct solution.”
Step 1
Qualify as an heir and define who will act as head of the family. This is a relatively simple process. Go to a civil registry office or a notary public, where they will tell you all the steps you need to take. Once you have been recognized as an heir, you will be able to access information about the assets that belong to the inheritance from registries, notaries, tax offices, banks, or other institutions. Find complete information on the website https://justica.gov.pt/Servicos/Espaco-Obito-Backoffice/Habilitacao-de-H.... If you do not have the time or energy, or find it very difficult to deal with these matters, seek the help of a professional, lawyer, or solicitor.
Step 2
Time does not stand still, and for Stamp Duty (IS) purposes, the assets of the estate must be declared to the “Patrimony” section of the Tax Office by the end of the third month following the month in which the death occurred. Bring the death certificate and identification documents of the deceased and each of the heirs. If a will or deed of donation has been left, these must also be presented. Prepare a list of assets with the registration number and value of each asset, as this will help with the process. The AT website provides templates and instructions on how to do this.
Step 3
If there is agreement, the division among the heirs is carried out at the registry offices, by means of a private document authenticated by a lawyer or solicitor, or at a notary's office. If there is no agreement or in any other case, an inventory must be carried out, in accordance with the law. Check out the available solutions at https://justica.gov.pt/Servicos/Espaco-Obito-Backoffice/Habilitacao-de-H...
Step 4
Be aware that, with regard to the family home, the surviving spouse has the right to continue living there from the moment of division, as well as to use its contents, compensating the other co-heirs in the division if the value of these assets exceeds their share of the inheritance and joint ownership, if any. For information purposes, if you live in a rented house and are a spouse, or have lived in a common-law marriage or joint household for more than one year, the lease does not expire and remains in effect, but the death of the leaseholder must be reported to the landlord, with a copy of the supporting documents, within three months of the occurrence.
Step 5
If, as a result of the division, you have retained the property, this is an asset on which the passage of time has a significant impact, both in terms of its value and the income and costs it generates, depending on the type and economic use that can be made of it. Let's take a look:
Rural land, with agricultural or forestry crops, is an interesting property for those who wish to and are able to maintain these activities. They generate consumer goods for personal use or for sale, and there is public support and subsidies for these activities. However, for those who do not have this intention or desire, seriously consider selling these assets quickly. In addition to the depreciation resulting from the lack of maintenance of crops (vineyards, olive groves, almond groves, forests, etc.), the growth of trees and spontaneous vegetation entails costs for annual land clearing, which is mandatory in rural areas as a means of fire prevention until March 15 of each year, as well as the corresponding municipal property tax (IMI), although this is usually low.
Urban land. This is perhaps the asset that puts the least pressure on decision-making. The passage of time may favor its appreciation. It may or may not entail cleaning costs, under the terms provided for rural properties, but the amount of IMI payable may be much higher, depending on the planned or licensed building capacity for the lot or parcel. Check the amount of IMI due, so there are no surprises.
Step 6
Once you have decided to sell, the process can be enhanced by the intervention of a professional who already has a list of qualified buyers interested in your type of property: a real estate agent. In addition to their experience, they can help you adjust the price to what the market is willing to pay, namely, how quickly you want the sale to be made. And as a good professional, they will promote and advertise the sale to a wider audience, using good sales techniques to make the deal happen.
Step 7
Ensure the sale goes through. If someone is interested in buying, ensure the sale goes through by drawing up a preliminary purchase agreement, with a reasonable deposit that represents a genuine commitment. Without this, the deal is not effective. If you do not yet have a lawyer or solicitor to accompany this process, now is the time to do so in order to draw up this contract and ensure compliance with the rights arising from the contract.
Step 8
The sale is formalized by deed, authenticated private document, or “ready house” title. Any of these documents is valid, drawn up at a notary office, by a lawyer or solicitor, or at the land registry office, respectively. The purchaser is usually responsible for arranging and paying for this document, as well as settling and paying the taxes inherent to the transfer (IMT and IS). To participate in this act, you must bring your citizen card, heirs' authorization, stamp duty payment (made in step 2), and the document that legitimizes your ownership of the property. Don't forget that, even though the property is your own because you acquired it through inheritance, if you are not under a separate property regime, your spouse must consent to the sale and therefore must also participate in the deed. As the acquisition results from a division of property, it does not have to be registered in your name in the land registry.
Step 9
The next step is registration. This is also an act that the purchaser is responsible for handling and bearing the costs and expenses involved. Please note that if you want to keep the property for yourself, you must register it in your name. Check out how you can do this at https://justica.gov.pt/Servicos/Espaco-Obito-Backoffice/Habilitacao-de-H....
Step 10
Any capital gains obtained from the sale, which will be declared when filing your IRS tax return with your other income earned during the fiscal year, are taxed under that income tax.
- Capital gains on a property are calculated using the formula MV = VR - (VA x coef +EV + DAL) where MV = capital gain obtained; VR = amount realized from the sale of the property; coef = currency devaluation coefficient; VA = acquisition value of the property; EV = property appreciation costs incurred in the last 5 years; DAL = property sale expenses.
- The acquisition value to be considered, in the case of a free acquisition, is the taxable asset value (VPT) recorded in the matrix under the terms of the CIMI on the date of transfer (date of death), or that determined by appraisal in cases of omitted buildings or those registered without asset value.
- The costs incurred with the appreciation of the property refer to works or investments in the house that have contributed to its appreciation, and which have taken place in the last five years prior to the sale of the property, and the costs of the purchase and sale relate, for example, to the commission invoice incurred by the intervention of the real estate agent.
- Once the capital gain has been calculated, only half of its value will be considered for tax purposes.
“This is a possible roadmap for, in a particularly difficult moment, moving toward a simple and peaceful solution, beginning a new cycle of life, with these issues well organized and consolidated,”
Source: idealistanews