1 Legal framework

1.1 What legislation governs real estate in your jurisdiction?

Portuguese real estate law is a combination of administrative law and private law. The key pieces of legislation governing real estate include:

  • the Constitution of the Portuguese Republic;
  • the Civil Code;
  • the New Urban Lease Regulation;
  • the Land Registry Code;
  • the Notarial Acts Code;
  • the Code of Urban Development and Construction;
  • the General Regulation of Urban Construction;
  • the Municipal Property Tax Code and the Municipal Property Transfer Tax Code; and
  • the Horizontal Property Regime Decree-Law.

1.2 What special regimes apply to different types of real estate?

Portuguese law draws a clear distinction between greenfield sites and rural properties on one hand, and urban properties on the other. The classification of a specific property as either a greenfield site or an urban property hinges on:

  • its intended use as determined by the owner; and
  • the comprehensive framework of state land management and urban planning policies.

These policies play a crucial role in determining the feasibility of transforming a greenfield site into an urban property. Properties can also exhibit mixed characteristics, further emphasising the nuanced nature of property classification in Portuguese real estate law.

Therefore, when assessing a particular property, it is imperative to take into account not only its geographical location and dimensions, but also – and perhaps most importantly – the intricacies of land management and urban planning regulations.

Urban properties in Portugal are further categorised based on their authorised and intended usage, which falls into one of three main categories:

  • residential (housing);
  • commercial; or
  • services.

2 Ownership

2.1 What types of ownership rights exist in your jurisdiction?

Ownership (or co-ownership) comprises the right of use, enjoyment and disposal of property.

The Civil Code provides for other rights in rem over real estate:

  • Surface rights provide for the use, enjoyment and administration for a term or in perpetuity, allowing for construction or plantations.
  • Usufruct rights provide for the right to build and maintain a building on land that is partially or wholly owned by third parties, and can be temporary or set in perpetuity.
  • Real rights of use in rem allow third parties to harvest fruit for a predetermined period.
  • Permanent housing rights in rem grant an individual the use of a third party's property for the duration of the former's lifetime. Real timeshare rights in rem are allowed for tourism units.

2.2 What ownership structures are commonly used in your jurisdiction?

Residential properties in Portugal are typically under individual ownership, serving as either a primary residence or a second home.

On the other hand, larger commercial properties are frequently owned by companies, serving as investment assets or business facilities. In the realm of commercial real estate development, it is customary for companies to establish special purpose vehicles for each project.

Additionally, collective investment schemes such as real estate funds are seeing an increase in both their number and the volume of assets managed.

Fiduciary structures such as trusts are not recognised under Portuguese law. However, the concept of fiduciary ownership is accepted within the Madeira Free Trade Zone.

2.3 Are there any restrictions on real estate ownership in your jurisdiction?

In Portugal, real estate ownership is generally unrestricted.

However, special restrictions come into play in specific cases, particularly in non-constructible areas. These restrictions aim to safeguard vital sectors such as agriculture, the coastline, forests and other natural assets from potentially detrimental development activities.

2.4 Is ownership of land and buildings constructed thereon legally separable?

In Portugal, the general rule is that real estate ownership encompasses not only the land itself, but also the airspace above its surface and the subsurface rights, along with everything contained within these boundaries.

However, it is possible to enter into agreements to establish a surface right in rem.

2.5 What security interests can attach to real estate? How are they prioritised?

In Portugal, the most effective security interest for lenders is often a guarantee in rem, typically in the form of a mortgage. A mortgage has certain advantages, including the fact that it attaches to the property itself. This means that if the property is sold without prior cancellation of the mortgage, the mortgage continues to encumber the property and remains valid.

In the event of a court-ordered sale of the property, a mortgage grants the secured lender the right to collect its claim, which is typically related to or secured by the property. This right to collect proceeds from the sale ensures that the lender has a strong position in recovering its debt, provided that there are no other superior or prior guarantees in place.

Under specific circumstances, it is possible to register a promissory sale and purchase agreement in Portugal with erga omnes effect, meaning that it has legal force and effect against all parties, including third parties which were not involved in the original agreement.

In accordance with the principle of priority of registration in Portuguese real estate law, when there are multiple conflicting rights entries registered, the oldest registered right takes precedence. Mortgages that are registered later in time are considered subordinate to those that were registered earlier.

Other guarantees and securities include:

  • assignment of income;
  • pledge of shares/quotas;
  • assignment of claims as security;
  • pledge of bank accounts; and
  • sureties.

Operational, collateralisation and financial covenants may also be agreed upon, but do not qualify as guarantees in rem.

3 Registration

3.1 What body administers the land register in your jurisdiction?

In Portugal, the competent public authority responsible for overseeing and recording title changes and property-related transactions for real estate is the Land Registry Office.

3.2 Is registration of real estate rights, transactions and encumbrances mandatory? What are the consequences of failure to register?

The mandatory registration of rights in rem over property is governed by law. Specifically, facts that determine the constitution, recognition, acquisition or modification of rights in rem over property are subject to compulsory registration. These include various types of property rights, such as ownership, usufruct, use, habitation and surface rights.

Except for the registration of a mortgage, the lack of registration does not void the underlying agreement or transaction. However, enforceability against third parties is contingent on the completion of registration. Erga omnes effects do not apply to unregistered transfers of ownership.

Applications must be filed within two months of the date of completion.

3.3 What are the formal and documentary requirements for registration?

In Portugal, individuals or entities seeking to register real estate transactions or related rights can file their application for registration at any branch of the Land Registry Office throughout the country.

When submitting an application for registration, it is imperative to include the necessary documentation. This typically includes the relevant legal documents that establish the fact to be registered. These documents can vary depending on the nature of the transaction, but may include a court ruling or public deed that validates and records the specific event or right to be registered.

3.4 What is the process for registration?

The necessary documentation is submitted for analysis and validation by the registrar, who will conduct the final registration once the government fees have been paid.

3.5 Is registered information publicly accessible?

The Land Registry is a public record and information contained within it is generally accessible to the public. Anyone can verify the contents of the Land Registry by requesting a Land Registry certificate.

4 Commercial leases

4.1 What types of commercial leases exist in your jurisdiction?

Commercial leases in Portugal can generally be categorised into two primary types: fixed-term leases and open-ended leases.

Additionally, in the context of commercial property use, various other arrangements exist, such as the assignment of use of retail, industrial or office properties. These agreements often include ancillary services provided in connection with the use of the property. These services are not independent of the property use but are integrated into the overall lease agreement to support the tenant's operations. Furthermore, shop use agreements are common in settings such as shopping malls or retail spaces.

4.2 Are the terms of a commercial lease regulated or freely negotiable? What do they typically cover (eg, duration; security deposit; rent; sub-letting; termination)?

Leases of commercial properties are generally subject to fewer regulations compared to residential leases. There is greater flexibility for the parties involved in commercial leases to establish contractual provisions related to aspects such as:

  • the duration of the lease;
  • termination conditions; and
  • opposition to the renewal of non-housing leases.

These provisions can be freely negotiated and agreed upon by the parties.

However, in the absence of specific contractual provisions addressing these matters, the rules and regulations that apply to residential leases may serve as a default framework for commercial leases.

The parties can agree on the term of the lease agreement; but in the absence of stipulation, the agreement is deemed to be concluded for a five-year term. The initial term of non-residential lease agreements cannot exceed 30 years.

Commercial leases allow for a broad scope for negotiation, given the reduced number of binding provisions compared to residential leases. The lease agreement usually covers:

  • rents;
  • security deposit;
  • duration;
  • notice and termination periods;
  • liability for repairs;
  • rights and duties of the parties; and
  • domicile agreement in case of a dispute.

Sometimes a guarantor is also agreed upon.

4.3 What are the formal and documentary requirements for conclusion of a commercial lease?

Lease contracts must be executed in writing. In addition to the identification of the parties (identification documents or certificate of incorporation), it is necessary to obtain updated documentation – in particular, a property tax certificate. Often the landlord is provided with documentation that attests to the tenant's financial capacity, such as tax returns, interim financial statements or bank guarantees.

4.4 What is the process for concluding a commercial lease?

The conclusion of the lease usually takes place on signing of the lease agreement, after or immediately followed by payment of any required deposits and the handing over of the keys.

Registration before the Land Registry Office is not mandatory unless the initial term exceeds six years. However, the lease must be communicated to the tax authorities.

4.5 What are the respective obligations and liabilities of landlord and tenant under a commercial lease, and what are the consequences of any breach?

The rights and obligations of the parties under a business lease may vary depending on:

  • the negotiations before the contract's execution; and
  • the type of activity performed.

Therefore, the applicable legal provisions are mostly subsidiary.

Generally, the landlord's obligations include:

  • the provision of prior notice to visit the property at a pre-set time;
  • registration of the contract with the tax authorities;
  • performance of agreed works or, in the absence of such agreement, maintenance works; and
  • the fulfilment of all obligations before the condominium, including the monthly fee payment obligation.

The landlord is entitled to:

  • update rents;
  • pursue eviction as provided by law;
  • take possession of improvements made by the tenant; and
  • request the property to be returned in good condition, considering normal wear and tear.

The tenant must:

  • ensure the proper use of the property;
  • not engage in activities that are contrary to the law or good customs;
  • comply with noise legislation;
  • pay any required expenses for the use of the property;
  • carry out urgent repairs or those approved by the tenant;

The tenant is entitled to terminate the contract in an easier fashion in comparison with the landlord terminating the contract.

4.6 How are rent variations typically effected throughout the term of the lease?

The law is silent on the provision of a commercial rent updating schedule. However, the parties usually fix a small percentage for annual updating.

It is also common to adopt the regime established for residential leases, which provides that in the absence of agreement between the parties, the landlord may update the rent annually according to the coefficients defined by ministerial decree (based on the consumer price index).

4.7 What taxes are levied on rental income?

A bare walls lease is usually exempt from value added tax. However, if specific requirements are met, the landlord may renounce the exemption, applying a 23% rate to the rent.

In addition to annual property tax (due by the landlord), stamp duty amounting to 10% of one month's rent is due on completion of the lease.

If the tenant has organised accounting (which is mandatory for corporate entities), the monthly rent payment is subject to withholding tax at a rate of 25%. Tax withheld is credited against the landlord's final income tax liability.

Rents paid to individual landlords are usually taxed at 28% if not qualified as business income under self-employment rules. Alternatively, the landlord may opt for income consolidation and be liable to the applicable progressive rates. Rents paid to corporate landlords are taxed as profit at 21%. Non-resident corporate landlords without a permanent establishment in Portugal are liable to corporate income tax at 25%.

In the event of prepayment of rents, taxes are due by reference to the date of their collection by the landlord.

4.8 Can a commercial lease be triple net?

Portuguese law provides for the landlord's mandatory coverage of certain expenses, such as taxes and maintenance costs. Therefore, it is disputed whether triple net leases are valid and such arrangements are not common.

Thus, most common forms of net lease may not apply in Portugal because the owner is always responsible for paying the annual property tax. The owner may also be responsible for fire insurance coverage and insuring part of the common areas. Business tenants are often responsible for most costs, including:

  • the base rent;
  • utilities;
  • maintenance; and
  • standard non-infrastructural repairs.

4.9 How are landlord and tenant disputes typically resolved?

In addition to mediation, the Portuguese government has set up the Balcão Nacional do Arrendamento (National Lease Centre) and has established a specific procedure for eviction purposes. This special procedure allows for the swift eviction of the property and is an effective mechanism in case of breach of contract by the tenant.

It applies to termination of the agreement due to:

  • revocation;
  • expiration;
  • opposition to renewal;
  • non-payment of rent for more than two months; or
  • opposition by the tenant to the carrying out of compulsory works.

The Balcão Nacional do Arrendamento and the same eviction procedure are also the most appropriate means for terminating the lease, irrespective of its purpose, if the tenant fails to vacate the leased premises on the date provided for by law or by agreement between the parties.

4.10 What types of guarantees are market practice and required by landlords to secure the tenant's obligations

It is common practice to:

  • require that a certain number of months' rent be paid in advance;
  • agree on a deposit; and
  • request a bank guarantee payable on first demand.

The analysis of accounting documents in the negotiation phase is also quite common for risk assessment purposes.

5 Real estate transactions

5.1 What form do real estate transactions typically take in your jurisdiction?

Properties can be acquired through a share deal or an asset deal. Asset deals are the most common type of transaction and are typically used to transfer the title over residential properties. Share deals are uncommon between individual sellers and are mostly used when acquiring a portfolio. The income tax consequences of asset deals and share deals differ, but many tax savings that were previously available for share deals are no longer possible.

5.2 Which players are typically involved in a real estate transaction in your jurisdiction?

Typically, a real estate transaction will involve:

  • brokers;
  • lawyers acting for the seller and the buyer; and
  • a notary public.

Often, a bank will be involved in the transaction if financing is required.

Transactions demanding proper due diligence will lead to the input of surveyors, architects and/or engineers. Lawyers may also be involved in structuring the acquisition and analysing other implications of the transactions from the corporate law, tax law, estate law and asset protection standpoints.

5.3 Is the seller bound by a duty to disclose? What representations and warranties will it typically make?

The accessory duties associated with the purchase and sale are mostly freely agreed upon between the parties. However, the transaction is governed by the principle of good faith and a seller must not omit information that would lead to the buyer not completing the transaction. Information duties cover the accuracy and completeness of the information requested by the buyer.

Inaccurate seller representations may lead to liabilities for the seller, such as a price reduction. However, Portuguese law seeks, on the one hand, to minimise the buyer's risk through the information set out in the property's documentation and public access to the property's municipal information. On the other hand, the promissory contract of purchase and sale, as a binding act, could establish warranties and representations that would support a breach of contract by the seller, the most typical of which relate to:

  • the condition of the property;
  • the performance of works subject to licensing; and
  • the contractual legitimacy of the seller.

5.4 What due diligence is typically conducted in a real estate transaction?

Due diligence is typically performed to ensure the property's compliance with legal and technical rules and regulations.

Legal due diligence is performed by obtaining the property's documentation – whether required to execute the deed or ancillary documentation relating to construction licensing processes or responsibilities before the condominium or tax authorities.

A survey can also be conducted as technical due diligence, performed by technical experts who are capable of attesting to the structural and functional conditions of the property at the time of acquisition, as described in the appraisal report.

Finally, in particular cases, market due diligence may be requested, in which the buyer can assess the asking and market prices.

5.5 What are the formal and documentary requirements for conclusion of a real estate transaction?

Completion of a deed of purchase and sale must be performed before a notary public or a solicitor/lawyer. The seller must provide complete documentation for the property.

After completing the deed, the title document must be presented to the Land Registry Office to register the real estate transaction.

5.6 What is the process for concluding a real estate transaction? How long does this take? What costs are incurred?

The timeline for completing a real estate transaction is not static. From a formal perspective, the conclusion of the deed of purchase and sale depends only on obtaining the necessary documentation for this purpose. However, the constraints of paying the price and delivering the keys may impact on the conclusion of the transaction.

Signing of the deed, delivery of the keys and payment of the price take place through a single act that concludes the transaction. Registration at the Land Registry Office is often requested to take place on the same date.

In terms of costs, the fees of the parties' representatives and the notary public must be considered, together with the fees of the Land Registry Office, stamp duty and property transfer tax.

5.7 What are the respective obligations and liabilities of buyer and seller, and what are the consequences of any breach?

In addition to the primary obligations to deliver the property upon payment of the price, the parties often establish ancillary commitments relating to default on completion or other obligations to be carried out by the seller before conclusion of the transaction.

The Civil Code, however, foresees a regime in case of a definitive breach. A definitive breach of contract by either party is not automatic and depends on the non-defaulting party being summoned to comply. In the event of definitive non-compliance by the buyer, the buyer will forfeit all amounts paid. However, in case of non-compliance by the seller, the seller must refund double the amount of all deposits. Additional penalties may be agreed between the parties, such as compensation for default or mandatory sentences for each day of default.

The Civil Code also allows the non-defaulting party to demand execution of the contract by a judicial court.

5.8 What taxes are payable on a real estate transaction?

A real estate transaction triggers stamp duty and property transfer tax, which are payable by the buyer upon executing the title transfer. Under some circumstances, the buyer may be exempt from payment of the property transfer tax.

6 Real estate finance

6.1 Who are the most common providers of real estate finance in your jurisdiction? Do any restrictions apply in this regard?

Financing and lending are regulated activities and can only be carried out by authorised entities such as credit institutions and certain financial companies registered with the Banco de Portugal or under the passporting regime set out in EU directives.

Domestic banks are the most reliable option for mortgage loans in Portugal.

6.2 What forms of real estate finance are available in your jurisdiction?

Portuguese banks mainly grant housing and consumer credit. However, housing loans offer better conditions for acquiring a property.

A mortgaged housing loan is usually granted for:

  • the acquisition or construction of permanent, secondary or rental properties;
  • the acquisition or maintenance of ownership rights over land or existing or planned buildings; and
  • down-payments for the future purchase of permanent, secondary or rental properties.

Housing loan rules may also apply to other mortgaged loans, such as credit agreements that do not match a housing loan but are secured by a mortgage or other equivalent guarantee. In certain cases, financial leasing may also be an option and, in some instances, may be subject to the same rules as housing loans.

6.3 What formal, documentary and other requirements do lenders typically require of borrowers?

After fulfilling know-your-customer and anti-money laundering requirements, the lender will request the information necessary to assess the customer's creditworthiness. The lender will then present a credit proposal based on the customer's ability to repay the loan.

The lender may adjust the credit offer and the terms and conditions after conducting its due diligence and evaluating the property. To this end, the client must provide:

  • complete and updated documentation regarding the property; and
  • clear information about the terms and conditions of the real estate transaction.

The lender may also require the opening of a bank account and one or more insurance agreements regarding the loan, usually to be signed with an insurance company within the same group. In this case, the credit institution must accept an insurance contract from any other insurance provider if it provides a level of coverage equivalent to that of the insurance contract proposed by the credit institution or associated insurer.

Loan agreements entered into with licensed entities such as banks must be executed in writing.

6.4 What type of security interests are typically required by lenders?

A mortgage on the financed property is usually essential. In addition, insurance is usually required for the property and life insurance is required for the buyer.

In terms of credit conditions:

  • there will be a fixed and a variable interest rate; and
  • the bank will have access to the borrower's statement of financial liabilities from the Banco de Portugal.

6.5 What is the process for obtaining real estate finance? What costs are payable?

The costs of obtaining financing for the acquisition of real estate involve the signing of a loan contract, whose associated fees will vary according to the amount of the loan granted. In addition, there are the costs of registering the mortgage before the Land Registry Office and payment of stamp duty at a rate of 0.6% on the credit granted.

The costs of maintaining bank credit, insurance and commissions in the event of loan repayment should also be considered.

Dealing directly with banks is the most common way to secure a mortgaged loan. However, for more significant transactions, a broker can be engaged.

6.6 How is security enforced in case of any breach?

In case of default on the loan agreement, the bank will notify the debtor to pay the outstanding amount. In the event of further default, the bank will commence judicial proceedings against the debtor and guarantors for a pledge of assets and, if necessary, the sale of the property secured by the mortgage. The lender is not entitled to repossess the property without a court ruling.

A mortgage holder will take priority over other creditors whose claims are not preferential (eg, the state) or other unsecured creditors.

7 Real estate investment

7.1 Who are the most common investors in real estate in your jurisdiction? Do any restrictions apply in this regard?

Real estate investment in Portugal has changed significantly in the last decade due to the growing impact of foreign investment. However, despite the increase of large investors in the market, residential properties are still primarily owned by individuals or small companies.

7.2 What investment vehicles are typically used in your jurisdiction? What are the benefits and drawbacks of each?

The quota limited liability company is the corporate type most commonly associated with the purchase, sale, management and leasing of real estate. Such companies can be held by other companies, incorporated under Portuguese or foreign law.

Portuguese law allows for the straightforward and expeditious incorporation of companies. A Portuguese company must:

  • open a bank account with a Portuguese banking institution;
  • submit an ultimate beneficial owner (UBO) filing from the beneficial owner's central registry; and
  • submit a commencement of activity form to the Portuguese tax authorities.

More recently, real estate investment funds, regulated by the Portuguese Securities Market Commission (CMVM), have become more common and attractive for investors.

Alternatively, a foreign company can acquire property in Portugal. The company must:

  • be registered with the National Registry of Legal Entities; and
  • submit a UBO filing from the central registry of the beneficial owner.

The advantages of acquiring the property may vary according to:

  • the law of the company's country of origin; and
  • the applicable tax framework.

7.3 How are these vehicles established and administered in your jurisdiction?

The incorporation of Portuguese companies requires filings with the Commercial Registry Office and the National Registry of Legal Entities (for companies with foreign shareholders). The company will also be covered by the provisions of the Commercial Companies Code.

Foreign companies must be registered with the National Registry of Legal Entities. If the company does not have a permanent establishment in Portugal, its exposure to Portuguese regulations will depend on:

  • the types of activities conducted; and
  • the taxation of income derived in Portugal.

Investment funds must be registered with the CMVM. Real estate funds are governed by the Legal Regime of Real Estate Investment Funds (republished by Decree-Law 71/2010).

8 Planning and zoning

8.1 How is land use regulated in your jurisdiction?

Land use is regulated by the General Framework Law for Public Land, Land-Use Planning and Urbanism Policy (approved by Law 31/2014), which is supplemented by the Legal Regime of Territorial Management Instruments (approved by Decree-Law 80/2015).

The land-use planning system is based on programmes and plans. Programmes set out broad and general measures envisioned by the central administration, while plans are usually defined at a municipal or inter-municipal level.

The territorial development guidelines of national, regional and sub-regional programmes are incorporated into municipal master plans, which are more detailed regulations on construction requirements and restrictions. Most of the national territory is covered by municipal plans.

The Code of Urban Development and Construction (approved by Decree-Law 555/99) establishes the general legal framework for urbanisation and construction.

8.2 What is the process for obtaining planning permission? How long does this take? What costs are incurred?

The completion of urban development operations is contingent on administrative licensing, advance notice or communication or use licensing granted by municipalities. However, specific low urban impact works may qualify for an exemption from licensing.

Licensing procedures begin with the submission of a petition accompanied by complete legal, engineering and architectural documentation, as applicable. In some cases, urban control planning supervision is conducted after the commencement of refurbishment works.

Each procedure is managed by a supervisor who is responsible for:

  • ensuring the progression of the file;
  • monitoring its implementation and compliance with deadlines; and
  • providing information and clarifications to interested parties.

Municipalities may request opinions, authorisations or approvals from other competent entities.

The Urban Development and Construction Code establishes deadlines for analysing and concluding urban planning procedures. However, the deadlines are often merely indicative and tacit approval is limited to the cases set out by law.

Fees vary according to each type of procedure and are regulated by the Legal Regime on Urbanisation and Construction and Law.

8.3 Can a planning decision be appealed?

Planning decisions may be appealed before the administrative courts. An appeal may have suspensive effects regarding an administrative act in some instances. If the competent office does not issue a ruling within the legal deadline, a court appeal is also available to obtain the issuance of the decision.

8.4 What are the consequences of failure to obtain planning permission or to comply with a planning condition?

The competent municipality will produce an official notice to the legal entity responsible for the construction works. This will usually trigger the commencement of an administrative infraction proceeding, which can lead to the imposition of fines and potentially an embargo.

The defendant will receive a preliminary ruling setting out the grounds and provisions that it is considered to have breached in violation of the regulations, which can be appealed. The municipality will then present its final decision to the defendant, which may include fines and specific obligations. Finally, an appeal can be filed with the administrative courts.

Municipalities retain the prerogative to demolish any illegal works considered to present an actual hazard to the public interest, in addition to enforcing an embargo or requesting compulsory corrective works.

The defendant will also commit a crime of disobedience if it does not comply with the final decision.

8.5 Is expropriation of land possible in your jurisdiction?

Immovable property and the rights thereto may be expropriated for reasons of public utility that fall within the powers, purposes or object of the expropriating entity upon contemporaneous payment of just compensation according to the Expropriation Code (approved by Law 168/99).

In addition, the expropriators must protect the rights and interests of the expropriated parties – that is, the principles of:

  • legality;
  • justice;
  • equality;
  • proportionality;
  • impartiality; and
  • good faith.

Nevertheless, expropriation is always limited to what is necessary to pursue the public interest.

8.6 Is confiscation of land possible in your jurisdiction?

Apart from expropriation to pursue public utility, there is no confiscation of land in Portugal.

9 Environmental

9.1 What main environmental legal provisions apply to the development, use and occupation of real estate?

Portuguese environmental protection policy is enforced and developed by the Portuguese central and local administration, and is regulated by the Environment Framework Law (approved by Law 19/2014).

The Institute of Public Markets for Real Estate and Construction approves general environmental, health and safety guidelines.

9.2 Who can be held liable for environmental contamination and how are clean-ups effected?

The entity responsible for the contamination of soil is liable for costs arising from the site's clean-up and may be liable for fines imposed by the Portuguese Environmental Agency.

Where the person responsible for the contamination is a legal entity, directors, managers, partners and other key decision-making personnel may be called upon to compensate for the damages. This ultimately means that if the legal entity cannot cover all reparations and fines, liability for compensation is extended to the abovementioned persons.

9.3 What environmental provisions and considerations should be factored into real estate transactions?

Energy efficiency and air quality certification are required to sell or rent real estate. Certification requires a technical evaluation of the building regarding energy efficiency and acoustics.

9.4 What initiatives are in place to promote green buildings and energy efficiency in your jurisdiction?

Support programmes have been put in place by the Portuguese government (through the Environmental Fund) to incentivise the refurbishment of properties in a climate-conscious fashion. Those programmes provide soft loans for operations that will improve the environmental performance of private housing buildings, mainly focusing on energy and water efficiency and urban waste management.

9.5 What types of environmental certifications apply in your jurisdiction?

Various environmental certifications for real estate apply in Portugal, such as energy efficiency and air quality certification. Energy certification has been mandatory since January 2009. It covers all buildings, including existing buildings.

Acoustic conformity certification also ensures that the new construction complies with the sound insulation provisions established in the law.

10 Trends and predictions

10.1 How would you describe the current real estate market and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

The Golden Visa programme for real estate investments is ending. The programme was a major incentive for foreign investors to invest in Portuguese real estate to obtain residency. The end of the programme could lead to reduced demand from this specific group of investors, which in turn could put downward pressure on property prices, particularly in areas that have experienced significant price increases due to high demand from these investors.

Certain regions, such as Lisbon and Porto, which have seen a disproportionate amount of Golden Visa-related investment may experience more pronounced effects, including potential corrections in property prices.

11 Tips and traps

11.1 What are your top tips for the smooth conclusion of a real estate transaction and what potential sticking points would you highlight?

Fair negotiation between all parties is crucial throughout the process. In Portugal, complete, precise and conscientious due diligence is a must for both asset and share deals, and thorough risk analysis can significantly facilitate the transaction.

The cooperation of third parties who understand the potential back-and-forth negotiations will also be essential in making thoughtful, well-informed decisions.

When using financing, it is critical to secure a loan in advance or at least to validate the investor's creditworthiness with Portuguese banks.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.