Real Estate Agency Commission

What Is It?

The Real Estate Agency Commission (Comissão de Mediação Imobiliária) is the payment made for the services provided by a real estate agency in the sale (or rental) of a property.

This fee compensates the agency for marketing, property viewings, buyer qualification, negotiation, and legal and administrative support throughout the transaction.

What Is Its Purpose / Why Is It Important?

Success-Based Payment
In Portugal, the system follows the “No Cure, No Pay” principle: the agency is only paid if the property is successfully sold.

Legal Protection
The commission amount and payment conditions must legally be stated in the Real Estate Mediation Agreement — CMI (Contrato de Mediação Imobiliária).

Who Pays the Commission?

General Rule
The seller (property owner) pays the commission, as they are the party contracting the agency to market and sell the property.

Exception
In less common situations known as a Property Search Mandate (Mandato de Procura), a buyer may hire and pay a consultant to find a property on their behalf (commonly referred to as a Buyer Agent).

What Is the Typical Amount?

Percentage
The Portuguese market commonly applies a 5% commission calculated on the final sale price.

VAT — IVA (Imposto sobre o Valor Acrescentado)
VAT is always added at the legal rate in force (currently 23%).

Example

• Sale price: €200,000

• Commission (5%): €10,000

• VAT (23%): €2,300

• Total commission payable: €12,300

When Is the Commission Paid?

This is one of the most common sources of confusion. Payment typically occurs in two stages (as agreed in the contract):

At the Promissory Contract — CPCV (Contrato-Promessa de Compra e Venda)
It is common for the agency to receive 50% of the commission, deducted from the deposit (sinal) paid by the buyer.

At the Final Deed — Escritura
The remaining 50% is paid upon completion of the sale.

Note:
If no CPCV is signed, the full commission is usually paid at the Escritura.

How Is Payment Made?

Deposit Allocation (Retenção do Sinal)
Often, the seller authorises the buyer to issue two payments at the CPCV stage:

• one to the agency (commission portion),

• one to the seller (remaining deposit).

Invoicing Requirement
By law, the agency must issue an official invoice (fatura-recibo) for the service provided.

This expense is tax deductible for Capital Gains calculation purposes.

IRS Tip

Keep the agency commission invoice carefully.

When declaring the property sale in your Portuguese tax return (IRS — Anexo G), the commission may be included as a selling expense, reducing the taxable Capital Gains (Mais-Valias) and therefore lowering the tax payable.