New rules for the real estate sector
Since 26 June 2019 the rule has been in force (n.276/2019) for the real estate market.
Any person or company attached to the real estate market, at this moment must present the identification of all the business contributors. These new rules intend to end the money laundering and terrorist funding. There are some specifications that we will explain in this article.
Since 2017, cash transactions cannot exceed 3 thousand euros for individuals of Portuguese nationality and 10 thousand euros for foreigners who do not act as entrepreneurs or traders. To fill this law of 2017, all real estate workers have to report the identification of all business contributors. These two laws have the objective to end money laundering and terrorist funding.
These tight rules are in place, on the suspicion that cash payments may serve illicit actions. Before the law came out in June, the real estate agent only had to state who are the business participants, the final purchase value and the payment method. Whenever something suspicious was involved in the transactions, it was reported to the Judiciary Police, DCIAP, and tax authorities, without obligation.
Specifications about new rules
All deals above 2500 euros per month in the case of property leases, and 15,000 euros in purchase, it is now mandatory to report the following information from individuals. Customer identification must be done before the deal is completed:
- Identification;
- Address;
- Tax Identification number;
- Occupation;
- Employer;
In case there is more than one person involved in the house purchase, the identification and address of all participants who purchase above 5% of the overall value of the property must also be reported.
Another specification about the new rules for companies who work with the real estate market is the obligation to have a manager for the normative length (RPN). This kind of specification is only valid for companies with more than 5 employees. The real estate market must keep all written records with all the information about the transactions and customer information for 7 years. This information should be communicated to The Institute for Public Markets in Real Estate and Construction (IMPIC). This institution wants all real estate agents to manage risks related to the problems mentioned above, money laundering and terrorist financing.
If these rules are violated, the offender risks 2 to 12 years and large fines. (get all the new rules, here)