Practical legal guide · Portugal
Foreign developer building in Portugal: what to check before buying land
A company or investor from abroad wants to buy a plot in Portugal and build homes, a hotel or a commercial building. Whether you can build at all depends on how the municipal plan classifies the land: urban land is meant for building, rustic land mainly is not. Building work also needs a municipal licence or prior communication. A lawyer in Portugal checks this, together with the land registry, before you sign a promissory contract or pay a deposit.
Describe your caseUpdated and verified:
Short answer
- Land classification check (urban or rustic)
- Municipal plan and building licence
- Land registry certificate
- Promissory contract with conditions
What you may build depends on the land's classification in the municipal plan and on a municipal licence. Below we explain what is at stake and what a Portuguese lawyer checks before you buy.
Describe your caseQuick answers
- Can a foreign company buy land in Portugal?
- Yes. Foreign companies and individuals can buy land in Portugal; they need a Portuguese tax number (NIF).
- What is the difference between urban and rustic land?
- Municipal plans classify land as urban, meant for building, or rustic, meant mainly for agriculture, forestry or nature. On rustic land, building is generally restricted.
- Do I need a building licence?
- Construction work in Portugal requires a municipal licence or a prior communication, depending on the project and the plan.
When this situation arises
- A developer from abroad plans a residential project in Lisbon, Porto or the Algarve
- An investor wants to build a hotel or holiday homes on the coast or on Madeira
- A plot is offered as a 'building plot' but its status in the municipal plan is unclear
- The seller asks for a deposit before the planning questions are answered
What options do you have
Planning check before the deposit
A lawyer, with an architect if needed, checks the land's classification and what the municipal plan allows before you commit money.
Promissory contract with conditions
The purchase can be made conditional on obtaining the building permission; the lawyer drafts the conditions and the deposit terms.
Purchase and registration
The lawyer handles the deed and registration and checks that charges are cancelled.
Recommended step-by-step process
- 1.
Classification and plan
The lawyer checks whether the plot is urban or rustic land and what the municipal plan allows on it.
- 2.
Permission route
The lawyer checks whether the project needs a licence or a prior communication and whether earlier approvals exist for the plot.
- 3.
Registry and charges
The lawyer checks the land registry for the owner, mortgages, seizures and other charges.
- 4.
Contract and deposit
The lawyer drafts the promissory contract so your deposit is protected if permission is refused.
What documents to prepare
- Land registry certificate of the plot
- Property tax record (caderneta predial)
- Extract of the municipal plan for the plot
- Earlier planning approvals or information requests, if any
- Company documents of the buyer and NIF
- Draft promissory contract, if offered
Common mistakes
- Buying rustic land on the assumption that it can be reclassified
- Paying a deposit without a planning condition in the contract
- Relying on the agent's description of the plot as a building plot
- Checking the plan but not the land registry
Risks and important deadlines
No building possible
If the land is rustic or the plan does not allow the project, the plot may be worth far less to you than the price paid.
Lost deposit
Without a condition in the promissory contract, the deposit may be lost if you withdraw because permission is refused.
Municipal rules
Plans and procedures differ between municipalities; the lawyer checks the rules of the municipality where the plot is.
When it's worth contacting a lawyer
Contact a lawyer in Portugal before you sign a promissory contract or pay a deposit for land you intend to build on, especially if the plot's status in the municipal plan is unclear or the project needs a licence. A Portuguese lawyer checks the classification, the permission route and the land registry and protects your deposit in the contract. LawBridge is a lawyer search engine: you choose the lawyer yourself and send them a request. A lawyer's work is always paid.
Describe your caseFrequently asked questions
What happens to my deposit if the seller withdraws?
Under the Civil Code, if the seller fails to perform a promissory contract, the buyer can claim double the deposit paid.
Verified sources
- Decreto-Lei n.º 80/2015 (RJIGT), art. 71.º – classificação do solo: urbano ou rústico — Diário da República (INCM)
- Decreto-Lei n.º 555/99 (RJUE), art. 4.º – licença e comunicação prévia de operações urbanísticas — Diário da República (INCM)
- Código do Registo Predial, art. 1.º – publicidade da situação jurídica dos prédios — Diário da República (INCM)
- Decreto-Lei n.º 14/2013, arts. 2.º e 3.º – número de identificação fiscal (NIF) — Diário da República (INCM)
- Código Civil, art. 442.º – sinal no contrato-promessa — Diário da República (INCM)