Since 1 January 2024, a seller in Portugal no longer has to show the property’s habitation licence, the licença de utilização, when the deed is signed. The change came in with the Simplex UrbanÃstico, the government’s overhaul of planning and licensing rules, and it removed a check that buyers had relied on for years.
The reform does not make it legal to sell a home without a licence. idealista’s explainer on the change draws the line clearly: it removes the obligation to exhibit the licence at the deed, not the need to have one. In practice, though, it shifts the burden. Notaries, lawyers and solicitors now have to warn buyers that a property may lack the right planning documents. Whether the buyer then goes and checks is up to them.
Nick Houwen, co-founder of the western Algarve developer Casa Vista Real Estate, sees the consequences of that gap from the developer’s side of the table. His advice to anyone buying in the region is short. “Always involve a lawyer,” he says.
The problem you only find at resale
Houwen’s clearest example is one that catches cash buyers in particular.
“If a realtor says all the papers are fine, and eventually you buy it without a mortgage, and you don’t let it be checked by a lawyer,” he explains, “without a mortgage, you can just buy a house, even if it’s not fully legal. You can buy it as it is.”
The trouble arrives years later. “If you then want to sell it to a person who needs a mortgage, the bank will never approve the mortgage, because the house is not legal. Or partly illegal. So this is a big risk.”
The Simplex rules leave that decision with the banks. According to idealista’s analysis of the reform, lenders can choose whether to demand the licence, and are expected to keep asking for it to limit their credit risk and protect the value of the property they lend against. A cash buyer can walk past that check. The next buyer, if they need a mortgage, usually cannot.
That puts more weight on the buyer’s own checks in a region where so many buyers come from abroad. Non-residents accounted for 20.1% of homes bought in the Algarve in 2025 and 31.3% of the value, according to INE figures reported by Barlavento. A buyer who does not need a Portuguese mortgage may never have a bank’s surveyor or legal team look at the property at all.
Why the first person you meet is not on your side
For most foreign buyers, the first conversation about a property happens with an estate agent. Houwen says that is part of the problem.
“The first people they speak with are the real estate agents, and it’s not in their interest to tell the downsides,” he says, pointing in particular to how long the process can take, because a slower process means a slower sale. “Afterwards, you always need to buy with a lawyer and a notary. So it’s always something you find out in step number two.”
A traditional agent in Portugal typically charges around 5% of the sale price plus 23% VAT, paid by the seller when the deed is signed, according to the Portuguese property portal SUPERCASA. The agent earns nothing until the sale completes. Houwen calls the 5% “quite high” and says it pushes agents to do whatever it takes to close. In his experience, important information does not always reach the buyer intact. “So you should always be careful here,” he says.
In Portugal, the licence to practise property mediation, known as the AMI, is held by the agency, not by individual agents, idealista reported in 2025. Agents work under their company’s licence and carry an identification card issued by it. That is a legitimate system, but it means the person showing you a villa is not personally licensed in the way a buyer from the United States, where agents hold individual licences, might assume.
None of this makes agents the enemy. It makes them the seller’s representative, which is exactly what they are paid to be.
What a lawyer actually checks
The point of an independent lawyer is to read the documents nobody else has a reason to read for you. idealista’s buyer checklist for Portugal lists the core set:
- The land registry certificate (certidão do registo predial), which confirms the legal owner, the property description and any mortgages or charges registered against it.
- The tax record (caderneta predial), whose details should match the land registry.
- The habitation licence (licença de utilização), which confirms the building is approved for residential use. This matters most for rural homes, converted agricultural buildings and older properties that have been extended.
- The energy certificate, which is mandatory for a sale.
- The technical file (ficha técnica de habitação) for homes built after 2004.
- Proof that there are no outstanding debts on the property and that condominium fees are up to date.
Buildings constructed before 7 August 1951 are exempt from the habitation licence requirement, provided they have not been substantially rebuilt, extended or altered, according to the municipality of Cascais. A council can issue a certificate confirming the construction date. That certificate proves the age of the building and nothing more. If a pre-1951 farmhouse has since been extended or structurally altered, those changes still need their own approvals.
The same checklist is blunt about who should do the work: an independent Portuguese lawyer who acts only for the buyer, not for the agent or the seller.
The contract that matters most
For most buyers, the real commitment comes before the deed, at the promissory contract, the contrato-promessa de compra e venda or CPCV. It fixes the price, the conditions and the deposit, known as the sinal.
According to the legal guide published by Portugal Real Estate Lawyer, the sinal is usually around 10% of the price on resale homes and often 20% to 30% on new builds and off-plan projects. Article 442 of the Portuguese Civil Code sets the default rules if someone walks away. If the buyer pulls out, the seller keeps the deposit. If the seller pulls out, they must pay back double.
That is the default. The same guide warns that contracts drafted by sellers often override it, for example by limiting the seller’s liability to a simple refund. It also recommends holding the deposit in escrow rather than paying it directly to the seller. By the time everyone sits down with the notary for the escritura, the deed, there is almost nothing left to negotiate. Whatever protection a buyer has was written into the CPCV, or it was not.
The cost of not paying for advice
Independent legal advice is not free. Wise estimates legal fees for a Portuguese property purchase at 1% to 1.5% of the price, plus 23% VAT, with notary and registration costs of roughly €1,000 to €1,500 on top. Stamp duty adds 0.8% of the purchase price.
On a €500,000 villa, that legal fee comes to somewhere between €5,000 and €7,500 before VAT. Set against a home that cannot be resold to a mortgage buyer, or an extension that the council will not recognise, it is a small number.
Houwen adds one practical warning about the lawyers themselves. Hiring one is not the end of the job. “Even lawyers, you need to push constantly to do their work,” he says, “otherwise things won’t happen.” A buyer who signs the engagement letter and waits by the phone may find the process takes far longer than expected.
A developer’s view of honesty
Developing property in Portugal has filled Houwen’s working days since he left the Netherlands. Casa Vista, which he co-founded with Luciano de Vries, is preparing its first development in the western Algarve. When it has homes to sell, he says, the approach will be built around full honesty with buyers.
“It saves time, if you’re honest,” he says. “And don’t mislead people.”
He is also candid about the pressure tactics buyers will meet along the way. Sellers and agents often say there are other bids and that a decision is needed immediately. Houwen’s own response is to step back. “That’s a moment where I don’t let myself be pushed,” he says. A lawyer’s review is one of the easiest ways for a buyer to do the same.
The short version
For anyone buying in the Algarve this year, the advice reduces to a few steps. Hire your own lawyer before you sign anything, not after. Ask for the land registry certificate, the tax record and the habitation licence, or proof of the pre-1951 exemption, and make sure they describe the same property. Treat the CPCV as the real decision, and do not let a deposit go straight into the seller’s account. And if anyone tells you there is no time for checks because another buyer is waiting, take that as the signal to slow down.
The rules changed in 2024. The risk of buying a home you cannot sell did not.
