What's NEW in the Portuguese Real Estate & Urban Planning Law ?

The Decree-Law no. 10/2024 was published on the 8th of January of 2024, introducing a reform and simplification of licensing in the fields of urbanism, territorial planning and industry (the "Urbanistic SIMPLEX").

This decree came into force, regarding its most significant changes, on the 4th of March of 2024. Other changes were already in force, or are scheduled to come into force in 2025, 2026 and 2030 (in particular, changes that relate to more in-depth legislative developments or IT applications that accommodate growing dematerialisation).

Among the main changes, the legislator's focus was on simplifying urban planning and territorial planning procedures, including relevant changes to the processing of urban construction procedures and the respective deadlines, as well as the introduction of a regime of tacit approval of urban planning requests subject to licensing when the municipal administration does not decide within the set deadlines, which will place greater demands on the Municipal Public Administration.

Below, we summarise the main changes in this regard.

1.    Operations subject to prior control

Operations subject to prior control and their respective control modalities have been reformed, significantly increasing the number of situations exempt from any prior control by the municipalities.

As a result, urban planning operations are now grouped as follows: i) operations subject to Licensing, ii) operations subject to Prior Communication, iii) operations subject to Prior Communication with Deadline, and iv) exempt operations.

Cases of Prior Communication are provided for, with the consequent exemption from obtaining an urban planning license (and prior control). Specifically:

- Allotment operations in an area covered by a detailed plan or execution units with certain characteristics. In the latter case, there will first be a strict definition of what can be built and where.

- Urbanisation works in an area covered by a detailed plan, or an execution unit, which meet certain conditions, or located in an area covered by an allotment operation; and

- Construction, alteration, or extension works in an area covered by a detailed plan, allotment operation or execution unit with certain characteristics.

It should be noted that it is no longer possible for private individuals to follow the (more rigid) licensing regime when the legally applicable procedure is prior communication (where there is no prior authorisation from the public body).

2.    More situations categorised as exempt from prior control

New situations of exemption from prior control are introduced:

- When the works result in an increase in the number of floors, but without altering the height or façade (e.g. creation of a mezzanine in a commercial or industrial establishment);

- When the interior works involved affect the stability structure, but whose intervention is carried out by a qualified technician, through a term of responsibility attesting that the stability is not jeopardised (and may even be improved) compared to the situation in which the property was before the work was carried out, and this document may have to be shown during any inspections;

- When the work to be carried out has been preceded by favourable prior information, and the conditions of the construction to be carried out have been defined in advance;

- For the replacement of spans with others that, by providing an exterior finish identical to the original, promote energy efficiency.

3.    Use of buildings

- The procedure for authorising the use of buildings is eliminated. When there has been work subject to prior control, the individual is only obliged to submit the documents established by law, produced and signed by qualified technicians, attesting to the completion of the work in accordance with the prior control carried out by the municipalities, by means of a Prior Communication.

The building or fraction can be used for the intended purpose immediately after the submission of the Prior Communication and the respective necessary documentation.

- A stricter and "new" Prior Communication procedure with a Deadline, has been introduced, if there is one:

· Change of use of a building without works subject to prior control; and

·         Use of buildings exempt from prior urban planning control.

The use of the building or its fractions is therefore dependent on the delivery of the required documentation/the presentation of a mere Prior Communication with  Deadline.

In the latter case, a Prior Communication must be submitted, with the possibility of the Municipality objecting to the new use within 20 days (the referred deadline).  At the end of this period, the building or its fractions may be used for the purpose communicated.

It also points out that, regardless of the procedures applied to each urban planning operation, any work or use must comply with the applicable municipal urban planning, otherwise measures will be taken to protect the legality of the property (embargo, suspension of a prior control act, order to carry out corrective or alteration work, legalisation, total or partial demolition of works, restoring the land to the condition it was in before the work began or ceasing to use buildings or their fractions).

4.       Simplification of procedures

The new law introduces other simplifying measures:

No more permits

- Licensed urban planning operations will now be titled by a receipt of payment of the fees legally due. The permit which entitled the construction license is now expressly eliminated. Prior Communication is now recognised by proof of submission.

Procedure deadlines

- New rules have been established for a more transparent and realistic calculation of deadlines. Deadlines start counting when the individual submits the request;

- Legal deadlines are only suspended if the individual takes more than 10 days to respond to requests for information, additional documents, or other requests from the Public Administration. Deadlines continue to be counted in working days;

- There will now be a single possibility to request information, additional documents or make other requests during the procedure. As a consequence, an urban planning request cannot be rejected on the grounds that the request was incomplete if there was no preliminary rejection or invitation to correct or complete the request or communication;

Increase in the legally prescribed decision deadlines:

·         120 days, in the case of construction, reconstruction, alteration or extension, conservation, and demolition works carried out on a property with a gross construction area of 300 sqm or less;

·         150 days, in the case of construction, reconstruction, alteration or extension, conservation, and demolition works carried out on a property with a gross construction area of more than 300 sqm and less than or equal to 2200 sqm, as well as in the case of classified properties or properties in the process of being classified;

·         200 days, in the case of urbanization works, allotment operations, and in the case of construction, reconstruction, alteration or extension, conservation, and demolition works carried out on property with a gross construction area of more than 2200 sqm.

Failure by the municipalities to meet these deadlines will result in tacit approval of the request made by the private individual.

5.       The tacit approval regime

The tacit approval regime is thus one of the great new features of this reform and will now apply to licensing procedures:

- If the Administration fails to issue a decision or notify the applicant within the decision period legally provided for the issuing of acts, within the scope of licensing procedures, after the expiry of this period, the requests for their issue will be considered tacitly granted.

- Tacit approval forms the license to carry out the urban planning operation, which must be certified through the issuance of a certificate obtained through an electronic procedure.

6.       The period of validity of favourable prior information is extended from one to two years, without the need to request extensions.

7.       The deadline for carrying out the work can be extended without the current limits of only being able to do so once and for no more than half of the initial deadline.

8.       Legislative modernisation and simplification

•  Certain requirements of the General Regulation on Urban Buildings ("Regulamento Geral das Edificações Urbanas (RGEU)") are revoked or replaced, and the new Construction Code is due to come into force on the 1st of June of 2026.
•  Models for the compulsory use of licenses, responses to prior communications and acts to be carried out by technicians under this law will be approved by an ordinance of the members of the Government responsible for administrative modernisation and construction, in order to standardize procedures nationwide.

9.       Real Estate Transactions

One of the most symbolic changes, in transactional matters, is the possibility of transferring urban buildings without urbanisation titles.

In other words, for the purchase and sale of urban buildings to take place, it no longer matters whether they are urbanistically regularised or have a valid urban title.

• Practical effects: Until the 31st of December of 2023, the purchase and sale of buildings or fractions of buildings that could not prove that they had a Licence to Use or, alternatively, that they were exempt (e.g. the case of pre-1951 properties under Decree-Law no. 38 382 of the 7th of August of 1951, which approved the General Regulation on Urban Buildings ("Regulamento Geral das Edificações Urbanas (RGEU)")) was prevented, which is now no longer the case. Transactions are simplified, but the purchase and sale of buildings must follow a stricter procedure.

10.   Horizontal property ("Horisontell äganderätt")

In buildings constituted under horizontal property, the alteration of the purpose or use for which each fraction is intended for habitation no longer requires the authorisation of the other condominium members (which is the general regime). Changes to the title of the horizontal property must be notified to the administrator within 10 days.

11.   Establishment of conditions for the promotion of housing through urban plans

A simplified procedure is established for reclassifying rustic land as urban, with a view to increase the availability of areas for housing use.

The conversion of land for residential use, which allows for the construction of new buildings in urban areas that were previously classified in the applicable territorial plan as space for equipment, commerce, and services, is also carried out through a simplified regime. 

In essence, there are several changes implemented by this decree-law, and their implementation and regulation are expected in the near future.

The speed of implementation will require a great deal of commitment from the government and municipalities.