Table of Contents
- Executive Summary: Key Regulatory Shifts in 2025
- Overview of Portugal’s Real Estate Legal Framework
- New Tax Policies and Their Impact on Foreign and Domestic Buyers
- Licensing, Zoning, and Planning Changes for 2025–2030
- Golden Visa & Residency Program Evolution: What’s Next?
- Compliance Essentials for Investors and Developers
- Notable Court Decisions and Legal Precedents
- Key Market Statistics and Regulatory Impact Analysis
- Government Initiatives and Institutional Reforms (Source: portaldahabitacao.pt, sef.pt)
- Future Outlook: Predictions, Risks, and Opportunities through 2030
- Sources & References
Executive Summary: Key Regulatory Shifts in 2025
In 2025, Portugal’s real estate regulatory landscape is defined by significant shifts aimed at addressing housing affordability, sustainable urban development, and compliance with updated European Union directives. The government has enacted and proposed several legislative changes in response to both domestic pressures and broader EU policy alignment. Key among these is the reform of the “Mais Habitação” (More Housing) program, which was updated in late 2023 and continues to shape the housing market in 2025 by restricting new short-term rental licenses in major urban areas, with the goal of increasing long-term housing supply and stabilizing rental prices (Governo de Portugal).
There is heightened regulatory oversight for real estate transactions, especially regarding anti-money laundering (AML) compliance. The Portuguese authorities, in conjunction with the European Union’s 6th AML Directive, have reinforced due diligence requirements for real estate agents and notaries. These measures include enhanced customer verification and mandatory reporting of suspicious transactions, reflecting Portugal’s commitment to curbing illicit financial flows in the property sector (Comissão do Mercado de Valores Mobiliários (CMVM)).
Urban and environmental regulations have also been updated. New minimum energy efficiency standards for buildings, in line with the EU Energy Performance of Buildings Directive (EPBD), are now in force for all new developments and major renovations from 2025 onwards. This is expected to drive investment in green technologies and retrofitting, as developers and property owners strive to comply with stricter certification requirements (Diário da República Eletrónico).
According to the most recent data from the national housing observatory, the number of new housing permits issued in 2024 decreased by 8% year-on-year following the introduction of stricter licensing procedures and sustainability criteria. Conversely, foreign direct investment in commercial and residential real estate remains robust, buoyed by Portugal’s continued attractiveness as a destination for international buyers and investors (Instituto Nacional de Estatística).
The outlook for 2025 and beyond suggests ongoing regulatory tightening, with further amendments to landlord-tenant laws, property taxation, and digitalization of land registry processes under consideration. The overarching objective is to ensure market transparency, protect consumers, and align with EU-wide sustainability and AML goals. Stakeholders are advised to monitor legislative updates closely and adapt compliance strategies accordingly.
Overview of Portugal’s Real Estate Legal Framework
Portugal’s real estate sector is governed by a comprehensive legal framework designed to ensure transparency, legal certainty, and investor protection. The principal legal sources include the Portuguese Civil Code, the Land Registry Code, the Notarial Code, and sector-specific statutes. Regulatory oversight is primarily exercised by the Portuguese Securities Market Commission (CMVM) for real estate investment vehicles, and the Regulatory Authority for Water and Waste Services (ERSAR) for infrastructure. Municipalities play a crucial role in licensing, planning, and urban development through their respective urban master plans (Planos Diretores Municipais).
The process of acquiring real estate in Portugal involves several mandatory steps: due diligence, execution of a promissory contract, public deed of purchase and sale, and registration with the Conservatória do Registo Predial (Land Registry Office). In 2023, reforms streamlined online procedures, enhancing digital access for registrations and reducing processing times. In 2025, these digital services are expected to expand, further integrating with municipal and fiscal databases.
Compliance requirements have intensified, particularly in anti-money laundering (AML) and transparency. Real estate agents and developers must register with the Instituto dos Mercados Públicos, do Imobiliário e da Construção (IMPIC), the sector regulator, and comply with strict KYC (Know Your Customer) protocols. Since 2023, enhanced scrutiny of beneficial ownership and source of funds has been enforced pursuant to EU directives. Violations can result in administrative sanctions or criminal penalties.
Urban rehabilitation and sustainable construction are legislative priorities. Incentives for energy efficiency, as mandated by the Law No. 58/2020 (transposing EU Directives), require new and renovated buildings to meet stringent environmental standards. The regulatory focus on sustainability is likely to intensify through 2025 and beyond, especially as Portugal aligns with the EU’s Fit for 55 package.
Statistically, the Portuguese real estate market has maintained robust growth, with 170,000 transactions recorded in 2023, driven by both domestic and foreign investment (Instituto Nacional de Estatística). Regulatory trends suggest a continued emphasis on digitalization, transparency, and sustainability, positioning Portugal as a secure and attractive market for real estate investment through 2025 and into the coming years.
New Tax Policies and Their Impact on Foreign and Domestic Buyers
In 2025, Portugal’s real estate landscape is undergoing significant changes driven by new tax policies that directly affect both foreign and domestic buyers. The government has introduced and amended regulations to address housing affordability, foreign investment, and market transparency. Notably, the discontinuation of the Golden Visa program for real estate investments in high-density areas—first announced in 2023—remains in effect, signaling a strategic shift to encourage investment in less populated regions and other economic sectors (Diário da República Eletrónica).
A major regulatory update is the ongoing revision of the Non-Habitual Resident (NHR) tax regime, which had attracted significant foreign investment by offering favorable tax treatment to new residents. The government has announced plans to phase out or significantly restrict the NHR program by the end of 2024, with new entrants in 2025 no longer eligible for the same tax breaks. This policy aims to balance the interests of attracting skilled professionals with the need to cool speculative demand in the property market (Autoridade Tributária e Aduaneira).
For domestic buyers, the government is increasing support through tax credits and reduced property transfer taxes (IMT) for first-time buyers and younger purchasers, aiming to address concerns over housing affordability. Simultaneously, capital gains tax rules have been tightened for short-term property resales, particularly targeting speculative activity and flipping (Instituto da Habitação e da Reabilitação Urbana).
- Transfer Tax (IMT): Progressive rates up to 7.5%, with exemptions or reductions for primary residences and younger buyers.
- Stamp Duty: Remains at 0.8% of the property value.
- Annual Municipal Property Tax (IMI): Ranges from 0.3% to 0.45% for urban properties, with additional surcharges for high-value holdings (Autoridade Tributária e Aduaneira).
Looking forward, policymakers are expected to introduce further measures to discourage speculative foreign investment while promoting sustainable development and social housing. Market participants should anticipate increased compliance requirements, more rigorous due diligence for foreign buyers, and potential further adjustments to property taxation. These regulatory trends reflect Portugal’s broader effort to stabilize the property market, ensure fair access to housing, and align with European policy directions on transparency and anti-money laundering (Comissão do Mercado de Valores Mobiliários).
Licensing, Zoning, and Planning Changes for 2025–2030
Portugal’s real estate regulatory landscape is set for several substantial changes as the country responds to housing demands, urban growth, and EU policy alignment. The period from 2025 to 2030 will see key developments in licensing, zoning, and planning, driven by national strategies and local implementation.
Licensing Reforms
The licensing process for real estate development in Portugal has traditionally been governed by the Legal Regime of Urbanization and Building (Regime Jurídico da Urbanização e Edificação, RJUE). Recent amendments, notably under Decreto-Lei n.º 10/2024, aim to streamline procedures, reduce bureaucratic delays, and implement digital platforms for permit applications. By 2025, all municipalities are required to offer online submission and tracking of licensing processes, improving transparency and efficiency for developers and investors.
Zoning and Land Use
Portuguese zoning is managed through Municipal Master Plans (Planos Diretores Municipais, PDM). In response to the EU’s climate and housing priorities, Portugal’s Basic Law on Territorial Planning and Urbanism is under review, with anticipated updates to zoning classifications and land use restrictions by 2026. These updates will prioritize affordable housing, sustainable urban expansion, and climate resilience. Municipalities are expected to designate more areas for social housing and mixed-use development, especially in Lisbon, Porto, and the Algarve.
Planning Adjustments and Housing Strategy
The government’s 2023–2026 "Mais Habitação" initiative is shaping planning law. The initiative includes incentives for urban rehabilitation and a simplification of change-of-use permits to speed up the conversion of commercial spaces into housing. By 2025, new requirements will apply for energy performance and seismic safety in all new and rehabilitated buildings, aligning with EU directives.
- Between 2022 and 2024, over 12,000 new housing units received permits under streamlined licensing rules (Instituto Nacional de Estatística).
- By 2030, Portugal aims to increase its annual housing supply by 20% compared to 2020 levels (Governo de Portugal).
Outlook
Ongoing reforms in licensing, zoning, and planning are expected to increase legal certainty and stimulate sustainable development. With digitalization, policy alignment, and new compliance standards, Portugal’s real estate market will become more accessible and resilient, while authorities maintain tight oversight to ensure quality and sustainability (Diário da República).
Golden Visa & Residency Program Evolution: What’s Next?
Portugal’s Golden Visa program, officially known as the Residence Permit for Investment Activity (ARI), has undergone significant regulatory changes in recent years, with major implications for real estate investment and residency pathways. As of 2024, legislative amendments have eliminated the eligibility of most residential real estate investments in major urban centers such as Lisbon, Porto, and much of the Algarve for Golden Visa purposes. The government’s stated goal is to redirect foreign investment from overheated housing markets toward sectors deemed more beneficial for national economic development, such as job creation and urban regeneration in low-density territories.
The legal framework governing these changes is established under Law No. 102/2017 and further clarified by Ordinance No. 305-A/2022, with ongoing oversight by the Serviço de Estrangeiros e Fronteiras (SEF) (Foreigners and Borders Service). As of January 2024, qualifying real estate investments for Golden Visa eligibility are largely restricted to properties located in designated low-density areas or those intended for commercial use, such as tourism or services. The minimum investment thresholds remain at €500,000 for real estate acquisitions and €350,000 for properties requiring renovation, but geographic and usage restrictions are now strictly enforced.
According to official data, more than 12,000 Golden Visas were issued between 2012 and 2023, with roughly 90% linked to real estate purchases. However, since the regulatory tightening, monthly application volumes have declined sharply, signaling a substantial shift in investor behavior (Serviço de Estrangeiros e Fronteiras (SEF)).
Compliance requirements for both applicants and real estate agents have intensified. All transactions must adhere to anti-money laundering (AML) protocols supervised by the Comissão do Mercado de Valores Mobiliários (CMVM) and periodic audits by the Instituto dos Mercados Públicos, do Imobiliário e da Construção (IMPIC). Real estate professionals are now obligated to report suspicious transactions and verify the legitimacy of investment funds.
Looking ahead to 2025 and beyond, the outlook for Portugal’s real estate-linked residency is marked by further tightening. Government proposals under discussion include phasing out all real estate investment routes for Golden Visas and increasing scrutiny on existing permit holders (Government of Portugal). This reflects both domestic political pressures—especially around housing affordability—and broader European Union concerns about “golden passport” schemes. Investors and real estate professionals should expect continued regulatory evolution, stricter compliance demands, and a greater shift toward alternative qualifying investments, such as capital transfers and job creation.
Compliance Essentials for Investors and Developers
Portugal continues to refine its real estate regulatory framework to balance investment incentives with transparency, anti-money laundering (AML) obligations, and sustainable urban development. For 2025 and beyond, investors and developers must navigate a dynamic compliance landscape shaped by recent legislative changes and evolving enforcement priorities.
A central law governing real estate in Portugal is the Urban Lease Law (NRAU), which regulates lease contracts, rent updates, and tenant rights. Amendments in recent years have sought to provide greater protection for tenants while allowing contractual flexibility for landlords, particularly in urban centers like Lisbon and Porto. Investors should remain aware of ongoing parliamentary discussions that may introduce further tenant protection measures in 2025 (Diário da República Eletrónico).
The Golden Visa Program—long a driver of foreign investment—was substantially reformed in 2023. As of 2024-2025, real estate acquisitions for residential purposes in high-density urban areas are excluded from eligibility, redirecting investor interest toward commercial assets or low-density regions. Compliance with new application requirements, due diligence, and proof of legal fund origins is strictly monitored by the Serviço de Estrangeiros e Fronteiras (SEF) and Instituto dos Registos e do Notariado.
Anti-money laundering remains a top priority. Real estate professionals—including agents, notaries, and lawyers—are classified as “obliged entities” under the Law No. 83/2017. They must conduct enhanced customer due diligence, report suspicious transactions, and keep records in line with the Comissão do Mercado de Valores Mobiliários (CMVM) and Banco de Portugal regulations. The government is expected to step up enforcement and audits in 2025, with steep penalties for non-compliance.
Urban licensing and permitting have also been streamlined through the Simplex Urbanístico initiative, aiming to reduce bureaucratic hurdles. Developers benefit from faster digital approvals and simplified documentation processes, provided all environmental, planning, and zoning requirements are met (Diário da República Eletrónico).
- In 2023, foreign buyers accounted for 16.9% of total property purchases in Portugal (Instituto Nacional de Estatística).
- Portugal ranked among the EU’s most transparent real estate markets, but authorities warn of continued vigilance over AML compliance and tax obligations (Autoridade Tributária e Aduaneira).
Looking forward, the outlook for 2025-2026 suggests ongoing regulatory tightening, especially in AML and property taxation. Prospective investors and developers must remain up-to-date with legislative updates and ensure robust compliance frameworks to avoid legal risks and capitalize on Portugal’s dynamic real estate opportunities.
Notable Court Decisions and Legal Precedents
In recent years, Portugal’s real estate regulatory framework has been shaped by several notable court decisions and evolving legal precedents, reflecting the country’s ongoing efforts to balance market growth with compliance and consumer protection. As the sector continues to attract domestic and foreign investment, judicial interpretations of property and urban planning laws have become increasingly significant for market participants.
One of the most influential rulings in the past few years was the Acórdão do Supremo Tribunal de Justiça n.º 4/2022, which clarified the boundaries of property rights in cases involving urban rehabilitation and redevelopment. This decision reinforced municipalities’ authority to impose specific rehabilitation obligations on property owners, especially in historic zones, and underscored the need for strict adherence to municipal master plans and licensing requirements. The ruling has had a direct impact on the approval process for new developments and renovations, prompting developers to strengthen their compliance with urban planning regulations (Supremo Tribunal de Justiça).
Another significant case was addressed by the Tribunal Constitucional in 2023, which examined the constitutionality of recent amendments to the Alojamento Local (short-term rental) regulations. The court upheld the right of municipalities to restrict or suspend new local accommodation licenses in areas facing housing shortages, thereby supporting the government’s efforts to address housing affordability and urban balance (Tribunal Constitucional). This precedent is expected to influence municipal policies into 2025 and beyond, as cities such as Lisbon and Porto continue to adjust local rules in response to housing pressures.
Compliance with anti-money laundering (AML) obligations has also been reinforced by administrative decisions and court cases. The Comissão do Mercado de Valores Mobiliários (CMVM) and Instituto dos Registos e do Notariado (IRN) have issued guidance and imposed sanctions for failures in due diligence and reporting requirements in property transactions, emphasizing greater scrutiny on both buyers and sellers (Comissão do Mercado de Valores Mobiliários, Instituto dos Registos e do Notariado).
Looking ahead, legal practitioners anticipate further judicial clarification regarding the interplay between national housing strategies and private property rights. The legislative trend towards stricter urban licensing, sustainability requirements, and investor due diligence is expected to be tested in the courts, shaping the regulatory landscape through 2025 and into the following years.
Key Market Statistics and Regulatory Impact Analysis
Portugal’s real estate landscape continues to evolve, shaped by dynamic regulation and robust market activity. As of 2025, the sector is regulated primarily under the Regime Jurídico da Urbanização e Edificação (RJUE) and the Lei do Arrendamento Urbano (LAU), which govern construction, licensing, and tenancy agreements. Oversight is provided by several authorities, notably the Ministério das Infraestruturas e da Habitação and the Comissão do Mercado de Valores Mobiliários (CMVM), responsible for monitoring real estate funds and market transparency.
- Transactions & Foreign Investment: In 2024, Portugal recorded approximately €34 billion in real estate transactions, with foreign buyers accounting for over 20% of acquisitions—a proportion expected to remain stable or slightly increase in 2025, following policy clarifications on the Golden Visa regime and non-habitual resident (NHR) taxation (Instituto Nacional de Estatística).
- Regulatory Reforms: Recent reforms have focused on combating money laundering, strengthening due diligence requirements for real estate agents and notaries. The CMVM continues to enforce anti-money laundering (AML) compliance, with mandatory reporting of high-value transactions and ultimate beneficial ownership (UBO) disclosure.
- Rental Market Controls: In response to housing affordability concerns, the government has enacted rent control measures in high-pressure urban areas and expanded tenant protections. The Instituto da Habitação e da Reabilitação Urbana (IHRU) now manages several affordable housing initiatives, aiming to deliver over 26,000 affordable units by 2026.
- Licensing & Urban Development: Urban development is increasingly subject to digital licensing platforms and streamlined approval processes. Municipalities must adhere to stricter environmental and urban planning guidelines, reflecting Portugal’s commitment to EU sustainability targets (Governo de Portugal).
Looking ahead to 2025 and beyond, regulatory compliance is expected to intensify, particularly regarding AML, tax transparency, and tenant rights. Market participants should anticipate further digitization of regulatory procedures and ongoing adjustments to residency and investment incentives. The outlook suggests a stable yet closely scrutinized environment, with authorities prioritizing sustainability, transparency, and affordable housing access within the real estate sector.
Government Initiatives and Institutional Reforms (Source: portaldahabitacao.pt, sef.pt)
In 2025, the Portuguese government continues to implement significant reforms in the real estate sector, focusing on transparency, housing access, and compliance with EU directives. The Ministry of Housing, through the Portal da Habitação, has introduced a series of legislative measures designed to respond to housing shortages, speculative investment, and the need for sustainable urban development.
Key among these reforms is the ongoing application of the “Mais Habitação” program, which imposes restrictions on short-term rental registrations in high-pressure areas and offers fiscal incentives to landlords who transition properties from tourism to long-term residential use. The program also expands support for affordable housing construction, with the government allocating nearly €900 million for public housing projects in 2024–2026. These initiatives are intended to increase the availability of affordable rental housing and curtail excessive rent inflation (Portal da Habitação).
In parallel, institutional reforms have focused on compliance and anti-money laundering (AML) mechanisms. The Serviço de Estrangeiros e Fronteiras (SEF), now integrated into the new Agency for Integration, Migration and Asylum (AIMA), has tightened controls on foreign investment in real estate. After the 2023 revision of the Golden Visa regime, real estate investment options have been largely excluded, shifting the focus to productive investment and job creation. This regulatory pivot aims to reduce speculative international capital flows into property markets and align with EU AML standards (SEF).
- Registration and licensing requirements for real estate professionals have been reinforced, with mandatory digital record keeping and increased supervision by the Institute of Public Markets, Real Estate, and Construction (Portal da Habitação).
- Municipalities are empowered to implement local housing strategies, including controls on short-term rentals (Alojamento Local), to ensure community needs are prioritized over tourism interests.
- National statistics indicate that as of late 2024, more than 15,000 affordable housing units are under development, with targets to deliver a further 10,000 by 2026 (Portal da Habitação).
Looking ahead, the outlook for Portuguese real estate regulation is characterized by increased oversight, greater tenant protections, and a shift towards sustainable development. Continuous alignment with EU standards and the digitalization of regulatory processes are expected to enhance compliance and transparency in the sector through 2027.
Future Outlook: Predictions, Risks, and Opportunities through 2030
Looking ahead to 2030, Portugal’s real estate regulatory landscape is poised for continued evolution, driven by national policy responses to housing affordability, foreign investment trends, and sustainability imperatives. The Portuguese government has already enacted significant reforms in recent years, such as the winding down of the Golden Visa scheme for property investment in major cities, and stricter controls on short-term rentals. These measures reflect a broader policy shift towards stabilizing the housing market and ensuring greater access for residents.
In 2025, the key focus remains the implementation and monitoring of Law No. 56/2023, which introduced measures to limit new licenses for local accommodation (Alojamento Local) in urban pressure zones and heightened reporting requirements for property owners. This is expected to have a dampening effect on speculative investment and short-term rental supply, supporting longer-term rental availability for locals. Authorities have also increased scrutiny on anti-money laundering (AML) compliance in real estate transactions, following updated EU directives and national enforcement guidelines. Real estate agents, developers, and notaries face stricter due diligence obligations, with non-compliance subject to penalties and possible license revocation (Comissão do Mercado de Valores Mobiliários).
According to the most recent government data, residential property prices grew by 7.6% year-on-year in Q3 2024, down from double-digit growth seen in the previous years, suggesting early impacts from new regulations and tighter credit conditions (Instituto Nacional de Estatística). The Bank of Portugal continues to monitor mortgage lending practices, maintaining macroprudential measures such as loan-to-value limits and borrower income verification requirements to prevent overheating and systemic risk (Banco de Portugal).
- Predictions: Regulatory tightening is likely to persist, particularly regarding foreign ownership, short-term rentals, and environmental standards for new construction. The European Green Deal and national decarbonization targets will likely prompt updated building codes and greater enforcement of energy efficiency standards.
- Risks: There is a risk that overregulation could dampen investment, reduce housing supply, or shift demand to less regulated segments. Enforcement challenges, especially in the informal rental market, may undermine policy effectiveness.
- Opportunities: There is significant potential for growth in energy-efficient retrofits, affordable housing projects, and digital compliance solutions. Investors and developers who adapt to evolving legal frameworks and ESG requirements are likely to benefit in the medium term.
Overall, Portugal’s real estate regulatory environment through 2030 is expected to balance investment incentives with protections for residents and sustainability goals, presenting both challenges and opportunities for market participants.
Sources & References
- Diário da República Eletrónico
- Conservatória do Registo Predial
- Instituto dos Mercados Públicos, do Imobiliário e da Construção (IMPIC)
- Autoridade Tributária e Aduaneira
- Instituto da Habitação e da Reabilitação Urbana
- Autoridade Tributária e Aduaneira
- Serviço de Estrangeiros e Fronteiras (SEF)
- Instituto dos Registos e do Notariado
- Supremo Tribunal de Justiça
- Tribunal Constitucional
