The decision to invest in a land for the construction of a property is the initial step of the great project that is to build a house. We present, in four steps, what aspects to take into account, as well as what documents should be consulted and also how it is all the licensing process that needs to be obtained.
If you have already acquired a plot of land and need financing to build a house in it, we suggest that you compare previously all housing credit offers to ensure you save the most on the cost of the loan: Compare housing credit
Choosing a location may not be an easy task, but it is crucial to be aware of some aspects to find the right one.
The particularities of the land to be acquired are of extreme importance so that the entire construction process can occur without any problems. The slopes, the characteristics of the soil or the existence of water sheets are some of the factors to study if you want to buy land to build later.
Although structural engineering is at an advanced stage of development, later it can be costly to solve or amend problems in the structure of a building. Ideally, the client should be accompanied by a technician who can advise and help to choose the most suitable terrain.
The location of the land is one of the pillars of the whole construction project of a dwelling. It must already be part of a zone that is authorized for construction and which holds the basic infrastructure, such as basic sanitation and electric power lines.
Before starting the contract-promise of buying and selling, and since the motivation for the acquisition is to build, it is very important to check the land classifications at the municipal level.
Consultation of these documents will allow us to understand whether or not to build after buying the land and what conditions may apply.
Therefore, it is essential that the consumer consult the PDM (Municipal Directorial Plan), part of the PMOT (Municipal Plan of Territorial Planning). The latter consists of the set of documents in which all the important information can be found, namely:
The planning plan is a plan in which one can find the allocation of all the zones of the municipality. The consultation of the same allows the customer to realize, before buying land, if it is classified as urban urban land or urban urban land.
If the land is classified as Rural Soil, the construction is still possible, but, however, some extra procedures will be necessary in order to carry out construction work.
In the conditioning plan, also part of the PDM, the consumer finds all the restrictions (if any) that the land that he intends to acquire is subject.
If the land is in an already urbanized subdivision, the detail plan becomes the document that will make the most sense to consult, since it will allow a detailed view of the urbanized area.
The third step concerns the form of financing of the final project for which the client wishes to purchase the land.
If recourse to credit is required, there are two ways in which it is possible to buy land: personal credit and housing credit. Available, as a general rule, up to 50 thousand euros, personal credit may be the product indicated for those who want to close the business quickly and search for land at a lower price.
However, since, as a rule, buying a land means building a home, many Portuguese opt for the option of housing credit for construction purposes.
This will be the best solution for the vast majority of projects, since it allows the inclusion of the cost of land in construction credit. With this type of financing, the complexity of the process increases and will require the documentation that is normally requested to consumers for a housing credit for the purchase of permanent home.
An architectural project is also required on which the appraisal of the work will be based, and hence the maximum funding amount. However, the maximum repayment term is much higher and also the interest rate at which the loan will be subject will be lower . If the customer chooses to hire some products or services from the financial institution, he may also obtain a bonus on the spread . It is also important to realize that banks offer the lowest spread .
It is also important to note that, historically, the implicit interest rate on credit construction housing contracts is lower than the rate found in housing credit contracts only for home purchase.
Thus, by contracting a housing loan for construction purposes and including in this financing the value to buy the land, the client will have more financial advantages than if he chooses two separate loans.
On the other hand, there is always the option, in the future, to use the transfer of housing credit to another institution in order to achieve a better spread .
With the land surveyed and the financing proposal chosen, the next step will be to sign the Promissory Contract of Purchase and Sale
After purchasing the land, it will be necessary for the client to present a licensing project at the City Hall for the location of the land. This document is an architectural design project of a new construction and includes all the drawings and written elements necessary for the licensing of the work.
Later it will also be necessary to submit the project of specialties, which will also have to receive a positive opinion. After communicating the deferment, it is necessary to submit the documents of the builder and the applicant, so that the application for a construction permit is made.
Once the work has been completed, the work book and its documents will be handed over and the permit / permit for housing permits can be requested at the City Hall.
The final stage of the process of buying land for construction will consist of understanding the underlying taxation.
However, determining the total costs associated with the licensing application can be an arduous task and with some level of complexity.
The client must check all the information on the applicable taxes, as well as the exemptions and reductions available, in the Municipal Regulation of Charges Related to the Urban Activity and Related Operations (RMTRAUOC) of the municipality in which he / she will purchase the land.
There are two types of fees that the licensing process will be subject to: city planning and the urban compensation rate. In addition to the municipal taxes, also the IMT (Municipal Tax on Real Estate Transfer) and IMI (Municipal Property Tax) apply to the land.
With regard to IMI, and using the CIMI (Code of Municipal Tax on Real Estate), it is necessary to first understand the framing of the land at the fiscal level. Thus, it is important to understand what, for tax purposes, is considered a building. According to CIMI, this is defined as follows: “a building is the entire fraction of territory, covering water, plantations, buildings and constructions of any nature incorporated or established therein, on a permanent basis, provided that it forms part of the heritage of a natural or legal person and, under normal circumstances, has economic value . ”
Within the buildings there are also the rustic buildings and the urban buildings. The amount of the IMI to be paid on the property will be based on its tax net worth, and the applicable rates are as follows:
The amount to be paid of IMT on land will also vary between the two types:
Buying land for construction is often a project that will serve several generations of a family and should be weighted as such, creating wealth for the household.