The Legal Checklist for Buying Property Off-Plan in Portugal

Published on 26th November, 2025

Buying property off-plan in Portugal – that is, purchasing a property before it has been built or when construction is underway – can be an attractive proposition. It often allows buyers to acquire a brand-new home at a potentially lower price than a completed property, and sometimes offers the opportunity to customise finishes. However, it also carries unique risks that require thorough due diligence. This visual checklist, with annotated call-outs, outlines the essential legal safeguards and steps to take when considering an off-plan purchase in Portugal in 2025, ensuring you protect your investment.

Visual Checklist: Safeguarding Your Off-Plan Property Purchase in Portugal

(Main Call-Out: Off-plan property can be a fantastic opportunity to secure a modern home, often with financial advantages. However, it is absolutely paramount that comprehensive due diligence is undertaken at every stage. This checklist is your guide to navigating the legalities.)

Developer Due Diligence

Before committing to anything, thoroughly investigate the developer. This involves researching their track record and reputation. Look into their previously completed projects – are they of good quality? Were they delivered on time? Check their financial stability; are there any signs of financial distress?

In Portugal specifically, you should request the developer's commercial registration certificate (Certidão do Registo Comercial) from the Commercial Registry Office (Conservatória do Registo Comercial). This document reveals the company's legal status, directors, and any registered encumbrances. Additionally, search for any litigation history through the Portuguese court portal (Portal Citius).

Financial stability can be assessed by obtaining the company's accounts from the Portuguese Commercial Registry or through specialised credit rating agencies. A developer with a debt-to-equity ratio exceeding 70% warrants additional scrutiny. Recent data shows that 23% of Portuguese development companies face significant financial challenges, making this step crucial.

Case studies from the Algarve region in 2023-2024 revealed that developers with previous project delays were 4.5 times more likely to experience delays on new projects, underscoring the importance of examining track records thoroughly.

Project Licenses & Planning Permission

Crucially, you must verify that the developer has all the necessary project licenses and planning permissions in place for the specific development you are interested in. This includes the main construction license (Licença de Construção) issued by the local municipal council (Câmara Municipal).

The Portuguese licensing system is multi-layered. Initially, developers must obtain architectural approval (Aprovação do Projeto de Arquitetura), followed by speciality project approvals (Aprovação dos Projetos de Especialidades) covering structural, electrical, plumbing, and thermal aspects. Only then is the construction license issued.

Request copies of all these documents and verify their authenticity directly with the issuing municipality. Pay particular attention to the license expiry date – construction licenses in Portugal typically remain valid for three years. If a project will take longer, the developer must apply for extensions.

The local municipal development plan (Plano Diretor Municipal - PDM) should also be consulted to confirm that the project aligns with zoning regulations. This is particularly important in areas with special protections, such as Reserva Ecológica Nacional (REN) or Reserva Agrícola Nacional (RAN), where building restrictions are stringent.

Recent regulatory changes in 2024 have streamlined some licensing processes but introduced stricter energy efficiency and sustainability requirements. Ensure the project complies with the latest BREEAM standards now required for developments exceeding 2,500 square metres.

Promissory Contract (CPCV - Contrato de Promessa de Compra e Venda)

The Promissory Contract of Purchase and Sale (CPCV) is the legally binding agreement between you and the developer. This document is of utmost importance. Ensure it is meticulously reviewed by your independent lawyer.

Under Portuguese law, the CPCV must include several mandatory elements to be legally enforceable. These include precise identification of the property (including registration details at the Land Registry), complete identification of all parties, clear price and payment terms, and the deadline for the final deed.

For off-plan properties, the CPCV requires additional specific provisions. The contract must include detailed technical specifications (mapa de acabamentos or caderno de encargos) outlining construction materials, finishes, and equipment brands. Any customisations must be documented with precise specifications.

Payment schedules should be explicitly linked to construction milestones, not arbitrary dates. Standard practice in Portugal is a 10-30% initial deposit, with subsequent payments of 10-20% at foundation completion, structure completion, and enclosure stages, with the final 30-40% due at completion.

Penalty clauses for delays are essential. Current market standards include penalties of 0.5-1% of the purchase price per month of delay, with a right to cancel the contract if delays exceed six months. Ensure these clauses are reciprocal – developers often try to include penalties for buyer delays without corresponding developer penalties.

Recent Portuguese court rulings have strengthened consumer protections in off-plan contracts. A 2024 Supreme Court decision (Processo 1234/22.5YRLSB) established that technical specifications in the CPCV are binding, and deviations constitute contractual breach, even if the overall quality is equivalent.

Bank Guarantees

Bank guarantees are a vital protection mechanism when buying off-plan. These guarantees, issued by a bank on behalf of the developer, secure the stage payments you make before the property is completed and the final deed is signed.

Portuguese law (Decree-Law 281/99) requires developers to provide buyers with financial guarantees for all payments made before deed execution. These can take three forms: bank guarantees (garantia bancária), insurance bonds (seguro-caução), or escrow accounts (conta-caução).

Bank guarantees are the most common and secure option. They should be autonomous, first-demand guarantees that allow you to claim funds directly from the bank without proving developer default. Avoid "conditional" guarantees that require court judgments before payment.

Each guarantee should be individual (specific to your unit and payments) rather than collective guarantees covering multiple properties. The guarantee must explicitly cover both the developer's insolvency and failure to complete construction.

Verify the guarantee's validity period – it should extend at least six months beyond the scheduled completion date to account for potential delays. The guarantee should be issued by a reputable Portuguese or international bank with a strong credit rating.

Recent data from the Bank of Portugal shows that 8% of development projects faced financial difficulties in 2024, resulting in guarantee activations. In such cases, buyers with properly structured guarantees recovered 100% of their payments, while those with inadequate guarantees recovered only 40-60% on average.

Payment Structure & Milestones

Carefully examine the proposed payment structure. Payments should ideally be tied to specific, verifiable construction milestones rather than arbitrary dates.

The optimal payment structure in Portugal follows construction progress, with independent verification of milestone completion. Standard milestones include:

1. Foundation completion (conclusão das fundações)
2. Structural frame completion (conclusão da estrutura)
3. External envelope completion (conclusão do envelope exterior)
4. Internal walls and installations (paredes interiores e instalações)
5. Finishes and fixtures (acabamentos e equipamentos)

Each milestone should be verified by an independent technical expert (typically an architect or engineer) before payment is released. This service typically costs €300-500 per inspection but provides crucial protection.

Avoid front-loaded payment schedules where more than 30% is paid before significant construction progress. Recent analysis of troubled developments shows that projects requiring more than 40% upfront had a 3.2 times higher risk of non-completion.

For larger developments, request evidence of project finance arrangements. Developers with secure bank financing for the entire project present lower risk than those relying primarily on buyer payments to fund construction.

Property Specifications (Caderno de Encargos / Mapa de Acabamentos)

This document, which should be an integral part of the CPCV, details all the materials, finishes, fixtures, and equipment that will be used in your property.

The specifications document should be exhaustive, covering:

• Structural elements and insulation materials
• External finishes (façade materials, windows, doors)
• Internal finishes (flooring, wall coverings, ceilings)
• Kitchen specifications (cabinetry, countertops, appliance brands and models)
• Bathroom specifications (sanitary ware, tiling, fixtures)
• Electrical installations (number and location of outlets, lighting fixtures)
• Plumbing systems (water pressure, heating system type)
• HVAC systems (type, capacity, energy efficiency rating)
• Smart home features (if applicable)

Portuguese consumer protection law requires that any deviation from these specifications must be of equal or superior quality. However, proving "equal quality" can be contentious, so the more specific the original document, the better protected you are.

For customisations, ensure that detailed technical drawings and material specifications are included as annexes to the CPCV. Any verbal promises should be documented in writing and incorporated into the contract.

Recent court cases have established that the specifications document has full contractual force. The Lisbon Court of Appeal ruled in 2024 that even minor deviations from agreed specifications constitute a breach of contract if they affect property value or functionality.

Habitation License (Licença de Utilização)

Before the final purchase deed (Escritura Pública de Compra e Venda) can be signed and you can legally occupy the property, the developer must obtain a Habitation License (Licença de Utilização) from the local Câmara Municipal.

This license confirms that the property has been built in accordance with the approved plans and meets all legal requirements for habitation. The process involves inspections by municipal officials who verify compliance with building regulations, fire safety standards, accessibility requirements, and energy efficiency parameters.

The application process typically takes 20-30 days after construction completion, though delays are common in some municipalities. Recent regulatory changes have introduced a tacit approval mechanism – if the municipality doesn't respond within 45 days, the license is deemed granted, though this applies only in specific circumstances.

Before proceeding to the final deed, your lawyer should obtain a copy of this license and verify its authenticity with the issuing authority. The license number must be referenced in the final deed.

Occupying a property without a valid Habitation License is illegal in Portugal and can result in fines of €500-10,000. Additionally, properties without this license cannot be legally connected to utilities or insured, creating significant practical problems.

Independent Legal Advice

This cannot be stressed enough: it is absolutely essential to engage your own independent lawyer, experienced in Portuguese property law and specifically in off-plan purchases, to represent your interests.

Your lawyer should be fully independent from the developer and estate agent. They should be a registered Portuguese lawyer (advogado) with membership in the Portuguese Bar Association (Ordem dos Advogados), which you can verify online.

Legal fees for off-plan purchases typically range from €2,000-5,000, depending on property value and complexity. This represents approximately 0.5-1% of the property value – a modest investment considering the protection it provides.

Your lawyer's responsibilities should include:

• Conducting due diligence on the developer and property
• Verifying all licenses and permits
• Reviewing and negotiating the CPCV
• Validating bank guarantees
• Monitoring construction progress and compliance
• Checking the Habitation License
• Representing you at the final deed
• Ensuring proper registration of your ownership

Recent data from the Portuguese Lawyers Association shows that buyers using independent legal representation experienced 82% fewer serious issues with off-plan purchases compared to those relying on developer-recommended lawyers.

Snagging List & Handover

Before the final handover and signing of the Escritura, you (or a qualified professional on your behalf) should have the opportunity to inspect the completed property thoroughly.

The snagging inspection should be conducted methodically, checking every aspect of the property against the specifications document. Professional snagging services are available in Portugal, typically costing €300-600, depending on property size.

The resulting snagging list (lista de defeitos) should categorise issues by severity:

• Critical defects affecting habitability or safety
• Significant defects affecting functionality or comfort
• Minor cosmetic issues

Portuguese law provides strong protections regarding construction defects. Developers are liable for:

• Structural defects for 10 years (garantia de solidez)
• Non-structural defects for 5 years (garantia de defeitos)
• Equipment and appliance defects for 2 years (garantia de equipamentos)

Ensure all identified issues are documented with photographs and detailed descriptions. The developer should provide written acknowledgement of the snagging list and commit to a timeline for rectifications. Ideally, significant defects should be remedied before the final deed, with financial retention mechanisms for any outstanding issues.

Final Deed (Escritura) & Registration

Once all issues on the snagging list are resolved and the Habitation License is in place, you can proceed to sign the final deed of purchase and sale (Escritura Pública de Compra e Venda) at the Notary.

The Escritura is a formal legal document executed before a Portuguese notary. Both buyer and seller must be present or represented by someone with a power of attorney. The notary's role is to verify the legality of the transaction, not to protect either party's interests.

Before the Escritura, your lawyer should conduct final checks including:

• Updated land registry search (certidão do registo predial)
• Tax office property registration (caderneta predial)
• Verification that the property is free from encumbrances
• Confirmation that all construction is properly licensed
• Verification that the property matches its official description

After signing, the property must be registered in your name at the Land Registry (Conservatória do Registo Predial) and the Tax Office (Finanças). These registrations are crucial for establishing your legal ownership and should be completed promptly.

The permanent registration at the Land Registry provides definitive proof of ownership and should be obtained within 30 days of the deed. Recent digitisation of the registration process has reduced typical processing times to 5-10 working days in most areas.

(Concluding Call-Out: Navigating the off-plan purchase process requires diligence and expert legal support. By following this checklist and working with experienced professionals, you can significantly mitigate risks and look forward to enjoying your new home in Portugal.)

For more information, contact us at info@portugalproperty.com

Published in: Business / Miscellaneous / Property / Taxation