Proof of Funds

What Is It?

Proof of Funds refers to the documentation required to demonstrate the legitimate origin of the money used to purchase a property.

This requirement forms part of international anti-money laundering (AML) regulations and applies to real estate transactions in Portugal.

Banks, lawyers, notaries — and in some cases real estate agencies — are legally obliged to verify where purchase funds come from.

Why Is It Important?

Legal Compliance
All parties involved in the transaction must confirm that the funds used are lawful. Without this verification, a property transaction can be delayed or even blocked — sometimes just days before completion.

International Transfers
Large transfers arriving from abroad are commonly reviewed by Portuguese banks. Funds without a clear financial trail may be temporarily held until proper documentation is provided.

Mortgage Approval
Even when financing is involved, banks must validate the origin of the buyer’s own funds used for the deposit and purchase costs.

What Documents May Be Requested?

Requirements vary depending on the buyer’s situation, but commonly include:

• income tax returns or income statements

• payslips or proof of professional activity

• bank statements

• sale agreement of another property

• inheritance or gift documentation

• investment or dividend income records

• evidence of accumulated savings

There is no single required document — the objective is to establish a clear and traceable financial history.

Who May Request It?

• Banks

• Lawyers or solicitors

• Notaries

• Financial institutions

• Real estate agents (in certain regulated situations)

All are subject to the same compliance obligations.

Cost

No direct cost.
However, failing to prepare documentation in advance is one of the most common causes of last-minute delays in property transactions.

When Should It Be Prepared?

Ideally before transferring funds to Portugal or signing the CPCV (Promissory Purchase Agreement).

A frequent mistake among foreign buyers is addressing proof of funds only after urgent requests from the bank during the final stages.

Practical Tip

Avoid transferring purchase funds through multiple accounts or third parties without proper documentation.

From a compliance perspective, money without a verifiable trail may be treated as having an unconfirmed origin — potentially delaying or preventing completion of the purchase.