Buying New-Build
Property in Portugal:
What Buyers Should Know.

Buying a newly built property in Portugal can be attractive for international buyers, particularly when looking for modern specifications, energy efficiency and properties requiring little immediate work.

But buying a property that is still under construction, or purchasing off-plan before construction is complete, is different from buying an existing home.

You may be committing to a property you cannot yet inspect in its finished form. Payments may be required during construction. Completion may be months or even years away. And much of what you are buying depends on plans, specifications and contractual commitments.

That makes careful due diligence particularly important.

These terms are often used interchangeably, but they can describe different stages of a development.

A completed new-build property can usually be inspected before purchase.

A property under construction may already exist physically but still require significant work before it can be occupied.

An off-plan purchase may take place at a much earlier stage, sometimes before the individual property has been constructed.

The earlier the purchase takes place, the more important the plans, specifications, contractual protections and developer due diligence become.

Before committing to a new-build purchase, buyers should understand who is developing the property and what exactly is being built.

Your lawyer can carry out the appropriate legal checks relating to the property, development and contractual documentation.

Depending on the development and its stage, relevant questions may include:

• Who owns the land?
• Who is the developer?
• What approvals and licences apply to the project?
• Does the property being sold correspond with the approved plans?
• Are there mortgages, charges or other matters affecting the property or development?
• What documentation exists for the development at its current stage?

The appropriate checks will depend on the individual project and should be reviewed by independent legal counsel before a buyer becomes contractually committed.

With an existing property, you can usually see much of what you are purchasing.

With an unfinished property, a significant part of the purchase may instead be defined by documents.

These can include architectural plans, floor plans, areas, specifications and descriptions of materials and finishes.

Buyers should understand what is included in the agreed specification, including where relevant:

• flooring
• kitchen specification and appliances
• bathrooms
• windows
• heating and cooling systems
• parking
• storage
• terraces, balconies or gardens
• common areas
• development facilities

It is also important to understand whether the contractual documentation allows materials, finishes or other specifications to be substituted or changed during construction.

A brochure or visual rendering can help explain a development, but the contractual documentation is what needs careful attention before committing.

Many Portuguese property purchases involve a Contrato-Promessa de Compra e Venda, commonly known as the CPCV.

For a new-build or off-plan property, the CPCV can be particularly important because there may be a substantial period between signing the contract and completing the purchase.

The contract may address matters including:

• identification of the property
• agreed purchase price
• deposit and subsequent payments
• construction or completion deadlines
• specifications
• conditions relating to completion
• documentation required before the final deed
• circumstances in which deadlines may be extended
• consequences if contractual obligations are not fulfilled

These provisions should be reviewed by the buyer's independent lawyer before signing.

New-build purchases can involve payments during construction rather than a single CPCV deposit followed by the remaining balance at completion.

There is no single payment structure that should be assumed to apply to every development.

Before agreeing to staged payments, buyers should understand:

• how much is payable at each stage
• when each payment becomes due
• what contractual event triggers the payment
• who receives the money
• what protection applies to money paid before completion
• what happens to those payments if the development is delayed or does not proceed as anticipated

These are matters to review carefully with the buyer's lawyer before funds are committed.

A predicted completion date and a contractual completion deadline are not necessarily the same thing.

Construction projects can be delayed for many reasons, so buyers should understand exactly what the CPCV says about timing.

Relevant questions can include:

• Is there a defined contractual deadline?
• Can that deadline be extended?
• Under what circumstances?
• Is notice required?
• What happens if completion is substantially delayed?
• What rights or remedies does the contract provide?

The answers depend on the wording of the individual agreement.

Do not assume that a delay automatically gives the buyer the right to cancel the purchase or recover money. The legal position should be assessed by the buyer's lawyer based on the contract and circumstances.

Buyers requiring mortgage finance should discuss the timing with a lender or mortgage professional early in the process.

A mortgage decision obtained today may not necessarily remain applicable if the property will only be completed much later.

The lender may also have requirements concerning valuation, documentation and the stage of completion before funds can be released.

Buyers should therefore understand both the contractual payment schedule and how it fits with their intended financing.

A new property should not simply be assumed to be defect-free because it has never been occupied.

Before completion, buyers should establish when they will be able to inspect the finished property and whether an independent technical inspection is appropriate.

This can help identify matters such as unfinished work, defects or differences between the completed property and the agreed specification.

Where issues are identified, the appropriate next step will depend on their nature and the contractual position.

I can help coordinate the practical process and access where appropriate, while technical inspections should be carried out by suitably qualified professionals and legal questions should be addressed by the buyer's lawyer.

Before the final purchase is completed, the buyer's lawyer should confirm that the documentation required for the transaction is in order.

Depending on the property and circumstances, this can include matters relating to the property's registration, use, technical documentation and energy certification.

Portuguese legislation also provides for the Ficha Técnica da Habitação, or Housing Technical File, in circumstances where it applies. For properties still under construction, the legal framework provides for a provisional version based on the relevant architectural and specialist projects.

The documentation required in an individual transaction should always be confirmed by the buyer's lawyer.

Marketing images and brochures are useful for understanding the intended appearance of a development.

But they should not replace proper consideration of the documents that define what is actually being purchased.

Before committing, buyers should understand which plans, specifications, finishes, areas and other characteristics form part of the contractual agreement.

If something is particularly important to your decision to buy, raise it before signing rather than assuming it will be included.

Before signing for a new-build or off-plan property, make sure you understand:

• who the developer is
• the legal status of the property and development
• what plans and specifications form part of the agreement
• what materials and finishes are included
• whether substitutions or alterations are permitted
• the deposit and payment schedule
• what triggers each payment
• the contractual completion deadline
• circumstances in which that deadline can be extended
• what happens if completion is delayed
• your financing timetable
• when the finished property can be inspected
• what documentation must exist before completion

The exact due diligence required will vary between developments.

New-build purchases often involve more coordination than buyers initially expect, particularly when they are based outside Portugal.

I can help you assess suitable developments, understand the practical buying process, coordinate property and development information, arrange viewings and inspections where appropriate, and keep the different stages of the purchase moving.

Where specialist advice is required, I can also connect you with the appropriate legal, mortgage and technical professionals, with the wider support and resources of The Agency Portugal.

The aim is not simply to find a new property, but to make sure you understand what you are buying and the process required to get from reservation or offer through to completion.