What Is a CPCV in Portugal?

If you’re buying property in Portugal, or simply interested in the process, you may have come across the term “CPCV”. But what is it, when does it happen, and what does signing one mean?

CPCV stands for Contrato-Promessa de Compra e Venda, or Promissory Purchase and Sale Agreement.

It is an agreement in which the buyer and seller commit to completing the property transaction on agreed terms before the final deed/completion.

It does not itself transfer ownership of the property.

The CPCV is commonly used but is not mandatory in every property transaction.

The process of buying a property in Portugal tends to follow the same sequence:

The CPCV is typically signed after an offer has been agreed and before the final deed is signed to complete the purchase.

You do not necessarily need to be in Portugal to sign the CPCV. With the appropriate arrangements in place, a buyer can authorise a representative to sign on their behalf using a power of attorney.

Although each agreement can differ, a CPCV generally includes:

There is no fixed amount for the deposit, but 10–20% of the purchase price is commonly used in Portuguese transactions.

However, this can be higher or lower depending on the circumstances of the transaction and the agreement between the buyer and seller. The deposit percentage can even form part of the bargaining when agreeing an offer.

The deposit forms part of the purchase price rather than being an additional cost, so if you pay a deposit of 10% of the purchase price, you will only need to pay the remaining 90% at completion.

This is one of the most important things to pay attention to in the CPCV.

In the usual deposit arrangement:

Note that these penalties can vary depending on contractual conditions and the circumstances of the default.

This is one key reason buyers should have the CPCV and the property documentation checked before signing.

A buyer relying on financing should pay particular attention to whether the CPCV contains a financing condition dealing with what happens if the mortgage is not approved.

Many contracts will include a clause stating that mortgage rejection automatically releases the buyer without penalty, but this is not mandatory.

If this clause is not included, the buyer may lose the deposit if their mortgage is not approved.

As such, if you’re buying with financing, it’s important to make sure that a financing clause is included in the contract before you sign.

You don’t actually need a lawyer to sign a CPCV.

However, it’s important to understand that the CPCV creates real contractual obligations, and depending on the purchase price and deposit size, can involve a substantial amount of money and legal liability.

Therefore, having an independent legal professional review the agreement before signing is generally sensible.

The CPCV is the point at which the agreed property transaction is formally committed to ahead of completion.

Buyers should understand the deposit, deadline, and any conditions and obligations before they sign.

Now that you know about the CPCV, why not find out more about the process of buying in Portugal, or explore our properties for sale.