Co-Ownership in Portugal: Legal Structures & Best Practices

Published on 20th January, 2026

Understanding Co-Ownership (Compropriedade) in Portugal

Co-ownership, or compropriedade in Portuguese, is legally defined in the Portuguese Civil Code. It arises when two or more individuals jointly hold the ownership rights to a single, undivided property. This situation can occur through various means, such as a joint purchase by an unmarried couple, a group of friends investing together, or individuals inheriting a property collectively. Each co-owner holds a specific, though not physically demarcated, share or quota (quota-parte) of the property. For example, if two people buy a property together in equal shares, each owns an undivided 50% quota.

Key Legal Aspects of Compropriedade

Several fundamental legal principles govern co-ownership in Portugal:

1. Individual Shares (Quotas): Each co-owner possesses an ideal share (quota) of the entire property, not a specific physical part of it unless a horizontal property regime (propriedade horizontal, typically for apartments) is established, or a formal division occurs. These shares are presumed to be equal unless the title deed or acquisition document specifies otherwise.
2. Rights to Use the Property: Each co-owner has the right to use the entire property, provided they do not prevent other co-owners from also using it according to their respective rights. The extent of use should ideally be proportional to their share or as mutually agreed upon by all co-owners.
3. Obligation to Contribute to Expenses: All co-owners are obliged to contribute to the expenses associated with the property, such as maintenance, repairs, taxes (like IMI - Municipal Property Tax), and insurance. This contribution is typically proportional to their share, unless a different arrangement is formally agreed.
4. Right to Dispose of Their Share: Each co-owner is generally free to sell, mortgage, or otherwise dispose of their individual share of the property. However, the other co-owners usually have pre-emption rights (direito de preferência), meaning they must be given the first option to purchase the share being sold, under the same terms and conditions offered to a third party.
5. Decisions on Common Property: Decisions regarding the administration and significant alterations to the common property usually require the consent of the co-owners. For ordinary administrative acts, a majority representing at least half the total value of the property is typically needed. For more significant acts, such as major renovations or selling the entire property, unanimous consent is often required.

Establishing a Clear Co-Ownership Agreement (Acordo de Compropriedade)

While not always legally mandatory for the creation of co-ownership itself, drafting a comprehensive co-ownership agreement (acordo de compropriedade) is highly recommended, particularly for unmarried couples or groups of unrelated individuals. This written agreement, ideally prepared with legal assistance, can proactively address potential areas of conflict and clarify the rights and responsibilities of each party. Such an agreement should cover:

• Usage Rights: Specifics on how the property will be used, especially if it's a holiday home (e.g., allocation of usage periods).
• Cost Sharing: Detailed breakdown of how expenses (mortgage payments, utilities, maintenance, taxes) will be divided and paid.
• Decision-Making Processes: Procedures for making decisions about the property, including what requires unanimous consent versus a majority.
• Exit Strategies/Buy-Out Clauses: Clear terms for what happens if one co-owner wishes to sell their share, including valuation methods and buy-out mechanisms for the remaining co-owners.
• Dispute Resolution: Agreed methods for resolving disagreements, such as mediation or arbitration, before resorting to court action.

Alternative: Setting up a Company to Own Property

For larger groups of investors or for more complex co-ownership scenarios, setting up a Portuguese company (e.g., a private limited company - sociedade por quotas, Lda) to own the property can be an alternative. In this structure, individuals own shares in the company, and the company owns the property. This can offer different mechanisms for governance, liability, and transfer of ownership (by selling company shares rather than a direct property share). However, it also involves company formation costs, ongoing administrative requirements, and different tax implications (e.g., corporate income tax if the property generates rental income). The suitability of this structure depends heavily on the specific circumstances and objectives of the co-owners.

Best Practices for Harmonious Co-Ownership

Beyond the legal structures, successful co-ownership relies on good practices:

• Open Communication: Maintain regular and transparent communication among all co-owners regarding the property, finances, and any issues that arise.
• Clear Written Agreements: Formalise all significant agreements in writing, especially the initial co-ownership agreement.
• Seek Legal Advice BEFORE Purchasing: Crucially, all parties should seek independent legal advice before entering into a co-ownership arrangement. A lawyer can explain the implications, help draft a robust agreement, and ensure everyone’s interests are considered. The team at PortugalProperty.com can connect prospective buyers with experienced legal professionals who specialise in property law.

Dissolving Co-Ownership (Divisão de Coisa Comum)

If co-owners wish to end the co-ownership arrangement, they can do so through a process called divisão de coisa comum (division of common property). If the property can be physically divided into distinct parts corresponding to each co-owner's share (and local planning laws permit this), this can be done by agreement or, if necessary, through a court process. If the property is indivisible (which is often the case with a single house or apartment), and the co-owners cannot agree on one or more of them buying out the others, the property may have to be sold, and the proceeds divided according to their respective shares. This process can be complex and potentially costly if it requires court intervention, further underscoring the importance of a well-drafted initial co-ownership agreement that includes exit strategies.

Considering a joint property purchase in Portugal? Ensure a smooth and secure investment by discussing your co-ownership structure with a legal expert. Contact www.PortugalProperty.com today for guidance and access to a network of trusted legal professionals.

Published in: Business / Miscellaneous / Property