The Cascais Letter · Buyer notes

Buying off-plan in Portugal: you are buying a promise, so the promise had better be good.

An off-plan purchase in Portugal happens twice. First on paper, when you sign the promise contract and start paying for a building that may be a frame, a shell or a hole in the ground. Then, a year or more later, at the deed, when the home finally exists and is licensed. Everything in between is governed by the promise, and the promise is only as strong as what was written into it and what stands behind the developer who signed it. This is how the staged money works, which protections Portuguese law hands you without asking, and the important one it leaves to you to negotiate.

Filed under: Buying in Portugal

What off-plan means in Portugal

Buying off-plan, em planta, or mid-build, em construção, means contracting today for a home that is not finished: sometimes a serviced plot and a set of drawings, sometimes a concrete frame, sometimes a complete shell waiting on its final licence. You are not buying from a previous owner. You are contracting with a developer, the promotor, who promises to build the home described in an approved project and to sell it to you when it is done.

The purchase therefore happens in two acts, often a year or more apart. The first is the CPCV, the contrato de promessa de compra e venda, signed at the start, under which you pay the price in stages as the building rises. The second is the escritura, the final deed, which only happens once the building is complete and licensed. Everything you pay in between is governed by the promise contract. Off-plan buying lives or dies on the quality of that document, and on what stands behind the developer who signed it.

People do it anyway, for real reasons. You choose your unit, your floor and sometimes your finishes before anyone else can. The payments are spread across the build instead of falling in one sum. And the home that arrives is new: current building standards, a full guarantee period ahead of it, no previous owner's surprises in the walls. Priced against finished new homes in the same streets, off-plan usually asks less per square metre. Treat that difference for what it is: it is the market paying you, modestly, for waiting, and for carrying a share of the build risk. The rest of this article is about keeping that share small.

The contract: what an off-plan CPCV has to contain

Portuguese law starts protecting you before the contents are even discussed, through the form of the document itself. Under article 410 of the Civil Code, a CPCV for a building or a unit that is already built, under construction or still to be built must contain two things: the in-person recognition of the promisors' signatures, and certification, by the entity that performs that recognition, of the existence of the respective use licence or construction licence. A promise to sell you a home in a building with no construction licence cannot properly be certified at all. Treat a developer who is relaxed about this formality as a finding, not a quirk.

Inside the document, an off-plan CPCV should pin down, at minimum:

  1. Who everyone is. The developer's full legal identity, and the authority of whoever signs for it. If the seller is a company, the person at the table must have the power to bind it.
  2. Exactly what you are buying. The building and the unit identified precisely: fraction, floor, typology, areas, parking space and storage, matching the licensed project, not the brochure.
  3. The construction licence. Its number and the council that issued it, tied to the approved project your unit forms part of.
  4. The price and the whole payment schedule. The deposit, every staged payment with the date or the verified building milestone that triggers it, and the balance payable at the deed. No stage should rest on the developer's say-so alone.
  5. The specification annex. The memória descritiva, the written schedule of materials, finishes, fittings and appliances, attached to the contract. What the developer may substitute, and on what terms, belongs here too.
  6. Dates with consequences. A completion deadline, a deadline for the deed, a daily or monthly penalty for delay that is the developer's, and a long-stop date after which you can walk away with your money back. None of this is automatic; it exists because it was written in.
  7. A clean handover of title. The property transfers free of charges, which in practice means the developer's own construction mortgage is released over your unit at the deed, out of the price.
  8. Your own exits. Completion conditional on the licence position being as promised and, where you are borrowing, on your mortgage being approved.

None of this is exotic. It is the standard architecture of a careful off-plan contract here, and a developer's reaction to being asked for it tells you a great deal about the developer.

The money: the deposit, the stages, and a presumption that matters

The Civil Code contains a rule every off-plan buyer should know before the first transfer. Under article 441, in a CPCV every amount the buyer hands to the seller is presumed to be sinal, deposit, even when the contract calls it an advance, a reservation payment or a part payment of the price. Labels do not soften it. From the first euro, you are inside the deposit regime described below, with everything already paid riding on the developer's performance.

The usual shape of the schedule, as market practice rather than law, is a deposit of roughly 10% to 20% of the price at the CPCV, further staged payments, reforços, released as construction reaches agreed points, and the balance at the deed. Practice varies by developer and by project, and the schedule in front of you is the one that counts. Read it as a risk curve. Early in the build, your exposure should be at its smallest, because what stands on the site is worth least. A schedule that front-loads the price, heavy payments against a hole in the ground, is transferring the developer's financing problem to you, and it can be renegotiated or refused.

Two habits protect the schedule's logic. Tie each staged payment to something checkable: a stage certified by the project's engineer or architect, a licence milestone at the council, a floor of structure standing that you or your lawyer can see. And keep the paper for every payment, bank transfers with references, never cash. If the purchase ever has to be argued about, the transfers are the argument.

If the developer defaults: what the law hands you

The deposit regime cuts both ways, and its teeth are real. Under article 442 of the Civil Code, a buyer who defaults for a reason that is their own fault loses the deposit to the seller. A seller who defaults owes the buyer double everything that was paid. Alternatively, the innocent party can ask a court for execução específica, specific performance: the sale completed by judgment, in the defaulter's place. For a finished building, that is a powerful remedy, and developers know it.

Two limits deserve plain statement. The first is article 442 again: unless the contract stipulates otherwise, there is no further compensation beyond the lost deposit or its double. Delay damages, extra loss, the cost of your plans unravelling: none of it is added by the law. It exists only if your CPCV wrote it in, which is why the penalty and long-stop clauses in the contract section above are not decoration. The second limit is simpler. A right to double your money is a claim against the developer. It is worth what the developer is worth on the day you come to collect it. Which leads to the protection Portuguese law does not give you, and the one this article exists to flag.

The protection Portugal does not provide automatically

Buyers arriving from some other systems, Spain is the usual comparison, carry an assumption worth examining at the door: that the law obliges the developer to guarantee their advance payments, through a bank guarantee or a surety bond, seguro caução, so the money comes back if the building does not. In Portugal, no such obligation exists. Portuguese lawyers have criticised the gap in print: the mandatory insurance of buyers' staged payments that neighbouring systems impose has no equivalent here, and the guarantee, where one exists, exists because the contract created it.

So create it, or price its absence. A bank guarantee or a surety insurance policy covering everything you pay before the deed is a normal commercial product in Portugal, and some developers offer one as part of the deal. If yours does, read the document itself, not the brochure's summary of it: who issues it, a bank or an insurer you can verify; what it covers, every staged payment or only some; what triggers repayment, and who decides the trigger has happened; and when it expires, which must be after the deed, not at the promised completion date. If no guarantee is offered, the standard fallbacks are contractual: smaller early stages, payments released only against certified progress, a retention held back until the use licence has issued. A developer who refuses every one of these is asking you to be their unsecured lender. Some buyers accept that knowingly, for the right project and the right price. Nobody should accept it unknowingly.

The two licences that bookend the build

The construction licence, the licença de construção, issued by the council under the approved project, is what makes the building legal as it rises. Article 410's certification requirement means its existence is confirmed at your CPCV signing, but your lawyer's job goes further: that the licence covers the project actually being sold, your unit included; that it is in force; and that its own deadlines for completing the works sit comfortably around the completion date you have been promised. A licence near expiry, against a completion date beyond it, is a delay already scheduled.

At the far end stands the use licence, the licença or autorização de utilização: the council's confirmation, after completion, that the building was finished in line with its approved project and is fit for the use stated on it. Until it issues, the home cannot lawfully be lived in. Two practical consequences follow. Your deed should be sequenced after it: the final deed for your unit also depends on the building having been constituted in horizontal property, so that your home exists as its own registered unit, and the normal order is licence, constitution, deeds. And since January 2024, under the Simplex law, the deed no longer forces the licence into the open: a deed can proceed without it being presented, with the notary recording a warning instead. Banks have not followed the deed's lead; in practice they still ask for the use licence before lending. For a cash buyer, nobody upstream will ask at all. Do not complete a new-build purchase without the use licence, or without your lawyer confirming in writing why your case is the exception.

Handover: the technical sheet, the snagging list and the guarantee clock

Completion day has its own paperwork. The developer of a home built after March 2004 must produce its ficha técnica da habitação, the technical sheet describing the dwelling's construction and systems as actually completed, under Decreto-Lei 68/2004. Since the Simplex, it no longer has to be handed over at the deed, and in practice nobody hands it over unprompted. Ask for it, at handover, by name: it is the record of what is inside your walls, and it is also deposited at the council, where a copy can be obtained. Walk the home before you accept the keys and put every defect, scratch and sticking door on a written snagging list, signed by both sides. The list starts the paper trail that the guarantees below run on.

Those guarantees are the strongest part of the off-plan bargain, and they run from delivery, not from the CPCV. Buying as a consumer from a professional developer, Decreto-Lei 84/2021 gives you ten years for a lack of conformity in the building's structural elements, and five years for any other lack of conformity, with the right to have the home repaired or the defect made good, a price reduction, or, at the end of the road, the contract undone. Alongside it, article 1225 of the Civil Code makes the builder, and the developer who built, liable for five years from delivery where the work ruins or shows defects from faults in the ground or the construction; defects under that regime must be reported within a year of delivery, so the snagging habit matters. One boundary to know: the consumer regime protects consumers. Buy through a company, or as a trade purchase, and you may be standing on the Civil Code alone. Either way, report defects in writing, promptly, and keep the letters.

The risks the brochure does not mention

Insolvency is the risk everything else organises itself around. Portuguese developers commonly build through a single-project company, a vehicle whose assets are the project itself, and whose substance drains away once the units are sold. If that company fails mid-build, your position is a claim for the money you have paid, in a queue, against a half-built asset, unless a guarantee stands behind it. The registry tells you part of the story in advance: the certidão predial on the land shows who owns it and what is registered against it, including, very often, the developer's own construction mortgage. A developer who does not yet own the land it is selling homes on, or whose build visibly depends on sales keeping pace, is a different proposition from one building with its financing already in place, and the paperwork will usually tell you which you are looking at.

Delay is the commoner, duller risk: weather, licensing, subcontractors, slow sales elsewhere in the building. There is no state compensation scheme for a late home. What you have is what the contract gives you, a penalty that accrues, a long-stop that lets you leave, and the double-deposit regime behind them. Specification drift is the quietest risk. Renders are marketing; the memória descritiva is the contract. Where the annex allows substitutions of equivalent quality, equivalent is an argument waiting to happen; the tighter the named brands, models and finishes in the annex, the shorter the argument. Finally, price: compare the off-plan price per square metre against finished new homes in the same streets, and remember that your money goes out earlier and sits at risk for longer. The gap between the two prices is what you are being paid for the wait and the risk. Decide, with the contract in front of you, whether it is enough.

The checks, in order

  1. Pull the registry extract on the land and the building. Who owns it, what mortgages and charges sit on it, and whether the seller at your table is the owner the register names.
  2. Read the licence file at the council. The construction licence, the approved project, your unit inside it, and the licence deadlines against the promised completion date.
  3. Check the builder. Construction in Portugal is a licensed activity, regulated by IMPIC; confirm the builder's licence, then look at the developer's finished work. A completed, occupied, well-kept earlier project is worth more than any brochure.
  4. Read the guarantee, if there is one. Issuer, coverage, trigger, expiry, in the document itself. If there is none, negotiate the staging down or the retention up, and price what remains.
  5. Read the specification annex line by line, against the showroom and the renders, before signing, while changes are still free.
  6. Match every staged payment to something you can verify, and visit, or have your lawyer verify, before each release.
  7. Use your own lawyer, instructed by you alone. The developer's lawyer drafts for the developer. Yours reads for you, runs the checks in this article and the wider set that precedes any CPCV, and writes what they find into the contract while the writing can still change the outcome.

Off-plan buying in Portugal is not a gamble by nature. It becomes one only when the promise is thin, the payments run ahead of the building, and nobody asked what stands behind the developer. Thick contract, staged money, verified licences, a guarantee where you can get one: on those terms, the wait for a new home is a reasonable bargain, and the keys, when they come, open a front door that was worth waiting for.

Sources

This is general information about how the system works, not legal advice on your own purchase. Every property has its own paper trail, and the checks above only protect you if they are run on yours, by your own independent Portuguese lawyer, before you sign.
Build your buyer briefRead: due diligence, before the CPCV

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