Steps to building a home in Portugal

Following numerous requests from our readers, I’ve decided to write this article in order to respond in a slightly more structured way to the subject of building a house in Portugal. It’s a subject very close to my heart, as my husband and I have studied the subject in depth, right up to the point of signing a promise to purchase a plot of land, only to give up in the end. Building in Portugal is not a decision to be taken lightly, and I hope this article will answer some of your questions.

As part of our work with VillaFeria, I’m surprised by the number of customers who contact us to ask for advice on how to move forward with their building project in Portugal. For some of them, after 6 months of waiting, the project was still blocked!

And yet, on the face of it, it seems so much better: “you buy a large plot of land that’s not too expensive, then have your house custom-built to your specifications, and with the price of Portuguese labor, you should in theory be able to get away with it” … the reality is somewhat more complicated, in my opinion and according to some of my contacts. My aim is not to discourage those who want to build in Portugal, but to make them aware of the situation. So I often say: “Why not, but BE CAREFUL”. Well, be careful of what?

And if you don’t want to build in Portugal, but rather renovate, I invite you to read the article dedicated to renovation in Portugal

1. Points to bear in mind when choosing a plot of land

This is a crucial step, and one that can be complicated and risky. Without getting the facts and checking certain important points, you could end up buying a plot of land on which you won’t be allowed to build the house of your dreams the way you want to. The big difference between Portugal and France when it comes to town planning is that in Portugal, municipalities don’t have a free hand.

Building permits are issued by the local municipality (“Camara municipal”). Each “Camara” has a specialized department (“Divisão de Gestão e Administração Urbanística”) staffed by architects who study projects and respond to requests. Before you buy your land, there are a number of points you need to confirm with the Camara, backed up by written documentation.

Please note that real estate agencies, eager to sell the land, may in some cases try to convince you that the land is in order and ready for construction, but it is imperative to ask to see the written documentation from the municipal Camara.

It’s important to know that in Portugal, building permits are slightly more detailed than in France: it’s not simply a question of whether or not a plot is suitable for construction, the Camara will ask to see the plans of your project before confirming whether or not your construction can be authorized. Finally, make sure there are no mortgages or other special conditions attached to the land

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This means you need an architect and a building plan before you even buy a plot!

So when an agent tells you “yes, the land is already urbanized and ready for construction”, you should know that this is not necessarily the case: in Portugal, there is no such thing as a generic, permanent building permit, which is granted on a case-by-case basis depending on the details of the project and for a specific period of time. For example, cadastral zones are redefined every 10 years. A plot of land that’s constructible today may well no longer be so the following year. Here are just a few of the criteria that can influence whether or not your house is permitted on a particular plot of land:

• The Camara may require that only a single-storey house be authorized, and may prohibit the construction of one or more storeys
• You should also be aware that the Camara sets a ratio of buildable surface area to total land area
• The Camara may require modifications to the location, size or type of windows/doors
• The “cota de soleira”: the altimetric quota threshold of the building’s main entrance
• The “Cércea”: designation of the height limit of a building in relation to a street
• … and many others: construction, layout and waterproofing surface, pool size, ratio between lawn and terrace, spacing between your plot and your partitions, parking, etc…

Here’s a list of key points to confirm with Camara:

1. That the land is legalized: some plots of land have been donated or inherited without having been formally declared in the cadastral plans. If this is the case, it can take more than 10 years for the legalization procedure to be completed!

2.That the land constitutes a defined lot: the Camara is able to provide you with a detailed plan of your area to confirm that the land you wish to acquire has been declared as a specific lot. This request is called “Pedido de direito a informaçao”.

3.That all town planning work has been carried out: water, sewage, electricity and road connections. In some cases, if the area of your plot does not correspond to a zone where public urbanization projects are planned, you may have to build part of an ancillary road in order to be authorized to build your house.

Please note: making an appointment with the Camara can be long and complicated, and you must speak Portuguese or be accompanied (only a maximum of 2 people are allowed to attend an appointment with the Camara architect).

In general, real estate agencies will push you to buy before you have received this information from the Camara. If you want to lose the plot, my advice is to wait until you receive this information before signing anything, or at the very least to ask your lawyer to include a suspensive clause in the preliminary purchase agreement, stipulating that you must obtain approval for the permit and the recourse of third parties

2. How to choose your partners?

Once you’ve checked the legal issues and you’ve got your plot of land, it’s crucial to choose the right partners

There are 3 main roles:

• The architect: for the design of your house plans
• The engineer: for specialist projects (civil construction, electricity, water, telecoms, etc.)
• The builder: for project execution

Note: some builders will offer you a service that includes an architectural and engineering solution, which can be a simpler option to manage, but also more risky if the builder gives you the slip.

It’s difficult to define the rules for finding the ideal service provider, but here are some important ground rules:

1. Check that the people you want to work with have been in business for at least 5 years: otherwise, you run the risk of finding builders who declare bankruptcy once the job is finished, to avoid the responsibility of keeping their warranty commitments
2. To facilitate your approval process with the Camara, it’s a good idea to work with local players. You’ll want to look for professionals who have contacts with Camara and who have already delivered homes in your area. This is the best way to do it (especially crucial when choosing your architect, who will represent you in your dealings with the Camara)
3. Ask to visit properties built by your builder to check the quality of the finishes. If you can, it’s even better to meet some of their previous customers
4. It’s a good idea to check that the builder has the necessary licenses to operate in this field
5. I strongly recommend that you go through a lawyer to sign a contract that stipulates the materials to be used and the deadlines to be met, with a margin beyond which late payment penalties must be paid to the customer

3. Checklist for building in Portugal

Before you start building:

• Choose an architect and define your project
• Select and purchase a plot of land
• Select an engineer and have your project validated
• Carry out a topographical analysis of your plot (Levamentamento topográfico)
• Choose a builder and have your project validated
• Present your project to the Camara Municipal (“Plano de Informação Prévia”)

Once you have received prior authorization from the Camara:

• Finalize your architectural project
• Finalize your “specialty” projects (water, gas, electricity, insulation, telecoms, etc.)
• Pay construction license fees
• Present your project to Camara

If the Camara approves, you’ll get your building permit (“direito à licença de construção”)

During and after construction:

• Building the house (9 to 12 months)
• Water, gas and electricity connections
• Inspection by the Camara to approve completion (this can take from 1 to 3 months)
• Issuance of the “licença de habitação” by the Camara
• Registration of the new building with the land registry (Conservatória do Registo Predial)
• Declaration of IMI (property tax) to the local finance registry

Note: Once the Camara has approved your project, your plans are registered and will be kept on file to validate the conformity of your work at the end of the project. If the initial project is not respected, there will be a reassessment by the board to determine what needs to be changed

4. Building costs

please note: the following information is a “rough” estimate that may vary considerably depending on the region in which you are building and the property you wish to build. These orders of magnitude will help you to be aware of the elements you need to take into account when drawing up your budget.

• Construction VAT: 23
• Architectural fees: approx. €10,000
• Building tax payable to the Camara (example for the Camara d’Almada): 57.34 € / m2 of buildable area
• Urbanization fees: approx. €15,000

5. Useful tips and links

What can I do to limit my risk?

• choose a reputable builder who has already built several properties in your area
• Hire a local lawyer to negotiate on your behalf and manage tenders and contracts for you
• Choose a property that is part of a construction program that has already been approved by the Camara (such as Maison au Portugal or Villa Feria)
• opt for a construction support service with a trusted local player in your area
• Allow an extra 3 to 6 months to complete your project
• Allow an additional €10,000 to cover unforeseen circumstances
• You can consult your architect’s license here: Associação dos Arquitectos

Useful links for inviting tenders from builders / architects / workers (sites only available in Portuguese) :

• https://www.zaask.pt
• https://www.habitissimo.pt
• https://www.pedirorcamentos.com
• https://obrascasa.com

In conclusion

It’s clear that some readers will react to this article by disputing that their build went very well, and I’d be absolutely delighted for them. My aim in writing this article is to share my experience and warn my readers, so that I can hopefully save them some trouble and unpleasant surprises.

Although the process of building a home in Portugal requires hard work, investment and patience, this in no way means that it’s a bad choice.

So now I turn to you to open the debate: what has been your experience? what advice would you like to add? on what points do you disagree with me?

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