Buying before selling: protect your deposit and timeline

You have found the next home, but the current one has not sold. The problem is not merely choosing dates. You need to know which money exists on each day, which debts the lender still counts and who bears the risk if one transaction is delayed.

Before reserving or signing a CPCV, choose a sequence. Then turn it into a written plan connecting net sale proceeds, mortgage approval, two contracts, payments and a credible fallback.

Choose one of three sequences

There is no automatic property chain in Portugal. There are two transactions and usually two CPCVs. The buyer has to build the connection between them.

Choose the sequence you can fund when everything takes longer than expected, not the perfect scenario. If buying first, model several months of two mortgage payments, policies, IMI, condominium charges and utilities. If selling first, include rent, storage, two moves and a period without an owned home.

The sale price is not your deposit

An expected €350,000 sale does not place €350,000 into the next purchase. Start with a conservative sale-price scenario and deduct:

• outstanding capital and interest up to repayment;
• any early-repayment commission and expenses confirmed by the lender;
• agency commission and other selling costs;
• agreed repairs, retentions or buyer adjustments;
• a reserve for tax and professional advice;
• a margin for timing differences and surprises.

The result is usable net equity. Separate the amount required for the next CPCV deposit from money that will only arrive when the sale completes.

Ask the current lender early for a written estimate for the likely date. For a Portuguese mortgage, Banco de Portugal says total early repayment requires at least ten working days' notice. After the debt ends, the institution has 14 working days to issue the discharge document. Confirm how repayment and mortgage cancellation will be handled in the sale itself; do not wait for a later document before discovering the process.

Ask the lender to assess the real overlap

Do not hide the current mortgage and hope it disappears before the next completion. In its solvency assessment, the lender considers income, expenses and credit responsibilities. DSTI includes the new payment and payments on other loans borne by the customer.

Give the lender three dates and two scenarios:

1. earliest and latest expected sale date;
2. intended purchase date;
3. scenario with the old mortgage repaid before purchase;
4. scenario carrying both mortgages for several months.

Ask what evidence allows the lender to stop counting the old debt. A listing, offer or even sale CPCV may not be enough. Obtain an explicit decision about deposit, valuation, policies, source of funds and any temporary facility. Availability and terms vary by lender and customer.

Pre-approval is still not final approval. Once the loan is approved, the lender provides the final FINE and draft contract. The proposal remains binding on the lender for at least 30 days and there is a mandatory seven-day reflection period. Put those days in the calendar; they cannot simply be waived to rescue a date.

Align both CPCVs, not just their dates

The next-home CPCV does not depend on your sale merely because the agent or seller knows about it. The condition must be negotiated and written. Ask a Portuguese lawyer or solicitor to review both contracts together.

For the purchase CPCV, discuss:

• which event in your sale permits the purchase to proceed: signed CPCV, deposit received, your buyer's finance approval or actual completion;
• evidence deadline and long-stop completion date;
• mortgage and valuation condition for the next home;
• return or treatment of the deposit if sale or finance fails under the defined conditions;
• extension mechanism and who may invoke it;
• notice method and documents proving each event.

The next seller does not have to accept a sale condition. If it is refused, the choice is not to delete it and hope. You either have funding independent of the sale or you do not take that risk.

For the current-home CPCV, confirm price, deposit, your buyer's financing, deadline, documents, vacant handover and the effect of an extension on your purchase. DECO's practical guide to CPCV contents highlights price, payments, deadline, specific conditions, encumbrances and penalties as matters to define.

Same-day completion needs choreography

Selling in the morning and buying in the afternoon sounds simple. In practice, the first transaction's money must follow a route accepted by the lenders and completion professionals, the old mortgage must be repaid, its charge cancelled and the balance made available in the correct form for the second transaction.

Request a one-page funds flow showing:

• time, place and owner of each act;
• amount sent to the old lender and amount remaining for you;
• payment methods and account holders;
• repayment and mortgage-cancellation documents;
• taxes, buyer cash and mortgage required for the purchase;
• operational contact at both lenders and for both professionals;
• fallback if the first transaction does not finish in time.

Casa Pronta can handle a purchase, loan, mortgage and registrations at one counter. That does not guarantee two connected files work within the imagined timetable. Book and confirm the sequence in advance.

Cash flow and reinvestment are different questions

Buying the new permanent home before selling the current one may, in some cases, fit the Portuguese capital-gains reinvestment regime. The current article 10 of the Personal Income Tax Code provides a window from 24 months before to 36 months after the sale, but applies cumulative conditions, declaration requirements and permanent-home use rules.

Do not use this as the answer to “how do I pay the deposit?” Tax relief does not create completion-day cash, approve a mortgage or guarantee full exclusion. Before choosing amount and order, ask an accountant or tax adviser to model the dates, fiscal domicile, repaid loan, reinvestment amount and reporting.

Your go/no-go file before the deposit

Next step

Create a sheet today with two columns—sell and buy—and a third headed “if delayed by 60 days”. If the third column does not work financially or contractually, you are not ready to pay the next-home deposit. Also revisit the difference between mortgage pre-approval and final approval before accepting a completion deadline.