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Opportunities and risks with new legislative changes
17 January 2024
The evolution and challenges faced by the real estate market in Portugal have led to a legislative revision aimed at simplifying bureaucratic processes in property transactions. This poses opportunities and risks with new legislative changes. Among the various approved measures applied in Portuguese law, one noteworthy change is the elimination of the mandatory presentation of the habitation and usage license by default at the time of property acquisition.
The new law Decreto-Lei N.º 10/2024 undertakes the reform and simplification of licensing in the fields of urban planning, territorial planning, and industry. It seeks to "eliminate licenses, authorizations, and disproportionate administrative requirements that create contextual costs," following a logic of "zero licensing."
What changes in practice with the new legislative changes?
This particularly affects the purchase of houses and has been applicable since the beginning of this year 2024. Specifically, "formalities related to the purchase and sale of the property are simplified, eliminating formalities that do not add value." This means that, during the signing of the property purchase and sale contract, it is no longer mandatory to display or prove the existence of the technical housing data sheet and the authorization for use. However, this legislative change poses risks for families and investors that must be considered.
Precautions to take
- Buying a house without a usage license may be partially or completely demolished if there are complaints from neighbors or if the municipality conducts inspections. For example, purchasing a property licensed for 50 square meters (m2) that is built to 200 m2.
- Purchasing a house that does not comply with construction and safety regulations.
- Buying a house without a license compromises the contracting of housing credit because banks require the usage license to proceed with financing.
- If unable to secure a loan, there is a risk of losing the deposit made during the signing of the promissory contract of sale (CPCV).
- Future sale of the house without a license may be more complex and potentially devalued.
How to protect yourself
- Even though a habitation or usage license is no longer mandatory, do not hesitate to demand all documentation available about the property, to avoid commitment without absolute certainty about the safety and habitability conditions of the acquired property.
- If not familiar with the property purchase process in Portugal or uncomfortable with Portuguese legislation, consider being accompanied by a professional qualified lawyer or solicitor to guide you through the entire property purchase process.
At Home Key Portugal, we are ready to provide the necessary support, not only to help you find your dream home, but also to assist you together with our network of professionals with all bureaucratic processes until the signing of your deed – ensuring that your dream home does not become a nightmare!
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