# Algarve Legal: Full Site Description > Portuguese Law in Plain English ## Overview Algarve Legal (algarve.legal) is an English-language legal information resource focused on the Algarve region of Portugal. It provides practical guidance for property buyers, expats, retirees, digital nomads, and investors who need to understand Portuguese law. The site covers property transactions, residency visas, taxation, succession planning, business formation, employment law, and consumer rights. The Algarve is Portugal's southernmost region, comprising 16 municipalities: Albufeira, Alcoutim, Aljezur, Castro Marim, Faro, Lagoa, Lagos, Loule, Monchique, Olhao, Portimao, Sao Bras de Alportel, Silves, Tavira, Vila do Bispo, and Vila Real de Santo Antonio. It is one of the most popular destinations in Europe for expatriates and property investors. --- ## Property Law ### Buying Process The Portuguese property purchase process follows a structured sequence: 1. Property identification and initial negotiation 2. Obtain a NIF (fiscal number) 3. Appoint a solicitor or solicitador 4. Conduct due diligence (caderneta predial, certidao permanente, planning certificates) 5. Sign a reservation agreement (optional, typically EUR 5,000-10,000) 6. Negotiate and sign the CPCV (promissory contract) with deposit (sinal), usually 10-30% 7. Apply for mortgage (if applicable) 8. Obtain IMT and stamp duty payment references 9. Pay IMT and stamp duty before the escritura 10. Sign the escritura (public deed) at the notary 11. Register the purchase at the conservatoria do registo predial 12. Transfer utilities and register with the local camara municipal The CPCV is legally binding under Portuguese law. If the buyer defaults, they lose their deposit. If the seller defaults, they must return double the deposit amount. This mechanism is codified in Article 442 of the Portuguese Civil Code. ### Due Diligence Essential documents to check before purchasing: - Caderneta Predial: the tax registry certificate from the Financas (tax office). Shows the property's fiscal description, area, construction details, and VPT (Valor Patrimonial Tributario), which determines IMI (annual property tax). - Certidao Permanente: the permanent land registry certificate from the conservatoria. Shows ownership, mortgages (hipotecas), liens, and encumbrances. Available online via Predial Online. - Licenca de Habitacao: habitation licence from the camara municipal, confirming the property is legally approved for residential use. - Ficha Tecnica de Habitacao: technical specification sheet (for properties built after 2004). - Certificado Energetico: energy performance certificate, mandatory for all sales and rentals. - Planning certificates: confirmation from the camara municipal that the property complies with the local PDM (Plano Director Municipal). ### IMT and Stamp Duty IMT (Imposto Municipal sobre Transmissoes Onerosas de Imoveis) is the property transfer tax. Rates for residential property: - Up to EUR 101,917: 0% (permanent residence only) - EUR 101,917 to EUR 139,412: 2% - EUR 139,412 to EUR 190,086: 5% - EUR 190,086 to EUR 316,772: 7% - EUR 316,772 to EUR 633,453: 8% - Above EUR 633,453 or EUR 1,102,920 (non-permanent): flat rates apply Second homes and non-permanent residences have higher rates starting from 1% on the first bracket. Stamp duty (Imposto do Selo) is fixed at 0.8% of the declared price or VPT, whichever is higher. Mortgage stamp duty is 0.6% of the loan amount. ### Land Registry Portugal operates a title registration system at the conservatoria do registo predial. Registration is not technically compulsory but is essential to protect ownership against third-party claims. The registration creates a presumption of ownership (Article 7 of the Land Registry Code). Unregistered interests may not be enforceable against bona fide purchasers. ### Building Licences Construction and major renovation require licences from the camara municipal. The Urban Simplex regime (Decreto-Lei 10/2024 of 8 January) simplifies the approval process for smaller works. Key changes under Urban Simplex: - Elimination of prior communication for many categories of works - Simplified process for interior renovations that do not affect structural elements - Faster timelines for camara responses - Digital submission through the Plataforma Electronica Major construction still requires a full building permit (alvara de construcao). After completion, a habitation licence (licenca de habitacao) is required before occupation. ### Rental Law Short-term rentals (Alojamento Local, AL) require a licence from the camara municipal. Law 56/2023 (Mais Habitacao) imposed significant restrictions on new AL licences, particularly in Lisbon, and introduced a moratorium on new registrations in many areas. Decreto-Lei 76/2024 subsequently reversed some of these restrictions, reopening new AL registrations subject to municipal approval. The Algarve municipalities have varied approaches to AL licensing. Long-term rentals fall under the NRAU (Novo Regime do Arrendamento Urbano, Lei 6/2006, as amended). Key provisions: - Minimum fixed-term contract duration: one year (since 2019 amendments) - Automatic renewal unless notice given - Landlord notice period for non-renewal: minimum 240 days before contract end - Tenant notice period: 120 days before contract end - Rent increases: limited to annual coefficient published by the government - Eviction requires court proceedings (except in limited circumstances) --- ## Residency and Visas ### D7 Passive Income Visa The D7 visa is the most common route for retirees and those with passive income (pensions, rental income, dividends, interest). Requirements: - Proof of sufficient means of subsistence: benchmarked at the Portuguese minimum wage (currently around EUR 870/month for a single applicant) - Portuguese bank account - NIF - Proof of accommodation in Portugal - Clean criminal record from country of origin and Portugal - Valid health insurance The D7 grants an initial two-year residence permit, renewable for three-year periods. After five years of legal residence, permanent residency or Portuguese citizenship can be applied for. ### Digital Nomad Visa (D8) Introduced in October 2022, the D8 visa targets remote workers employed by or contracting with entities outside Portugal. Requirements: - Employment contract or service agreement with a non-Portuguese entity - Monthly income of at least four times the Portuguese minimum wage - Proof the work is performed remotely - Standard documentation (NIF, accommodation, criminal record, health insurance) The D8 grants the same residence permit structure as the D7. ### Golden Visa The Portuguese Golden Visa programme underwent significant changes in 2023. Real estate investment is no longer a qualifying route. Remaining options: - Investment fund subscriptions: minimum EUR 500,000 in qualifying Portuguese investment funds - Job creation: creation of at least 10 permanent jobs - Scientific research: contributions of at least EUR 500,000 to research activities - Cultural heritage: investment of at least EUR 250,000 in cultural production or heritage preservation - Capital transfer: minimum EUR 1,500,000 Processing times have increased to 12-24 months in many cases. The Golden Visa grants a residence permit with minimal stay requirements (7 days in the first year, 14 days in subsequent two-year periods). ### NHR/IFICI Tax Regime The Non-Habitual Resident (NHR) regime provided a flat 20% income tax rate on Portuguese-source employment and self-employment income from "high value" activities, and broad exemptions on foreign-source income for 10 years. NHR closed to new applicants from 1 January 2024. The IFICI (Incentivo Fiscal a Investigacao Cientifica e Inovacao) is the replacement scheme, effective from 2024. It offers a flat 20% tax rate on qualifying Portuguese employment income for 10 years, but with more restrictive eligibility: - Scientific researchers and university professors - Qualified professionals in defined technology and innovation roles - Employees of startups certified by Startup Portugal - Members of fund management entities and carried interest recipients Applicants must not have been Portuguese tax residents in the five years prior to application. The broad exemptions on foreign-source income that characterised NHR are not replicated in IFICI. --- ## Essential Guides ### Powers of Attorney A procuracao (power of attorney) allows a legal representative to act on your behalf. Common for overseas buyers who cannot attend the escritura in person. Must be notarised and, for documents executed outside Portugal, apostilled under the Hague Apostille Convention (1961). Portuguese consulates abroad can also certify powers of attorney. ### Fiscal Number (NIF) The NIF (Numero de Identificacao Fiscal) is a nine-digit tax identification number. Required for all legal and financial transactions. Non-residents must appoint a fiscal representative (representante fiscal) who is tax-resident in Portugal. Following 2023 changes, EU/EEA nationals no longer need a fiscal representative. Application is made at any Financas office or online through the Portal das Financas. ### Banking Portuguese banks commonly used by expatriates include Millennium BCP, Novo Banco, Santander Totta, and BPI. Requirements for account opening: valid passport, NIF, proof of address (home country address accepted for non-residents), and in some cases proof of income or source of funds. Anti-money-laundering regulations require banks to conduct due diligence on all new accounts. ### Wills and Inheritance Under EU Regulation 650/2012 (Brussels IV), the default law governing succession is the law of the country where the deceased was habitually resident. However, a person can elect the law of their nationality to govern their succession through a choice-of-law clause in their will. Portuguese inheritance law imposes forced heirship (legitima): the reserved portion ranges from one-half to two-thirds of the estate depending on which heirs survive (spouse, descendants, ascendants). If there are no descendants, the spouse and ascendants share the reserved portion. This cannot be overridden by will under Portuguese law. British nationals can elect English or Scottish law (which has no forced heirship, except in Scotland where "legal rights" apply) to govern their succession. A Portuguese will is strongly recommended for anyone owning Portuguese property, even if they also have a will in their home country. The Portuguese will should cover Portuguese assets only and should not inadvertently revoke the foreign will. ### Company Formation A Portuguese Sociedade por Quotas (Lda., equivalent to a limited company) can be formed in one day through the Empresa na Hora service at an IRN (Instituto dos Registos e do Notariado) office. Minimum share capital is EUR 1 (though this was EUR 5,000 before 2011). Requirements: NIF for all shareholders, proof of identity, registered office address in Portugal. Annual obligations include filing accounts with the conservatoria do registo comercial and tax returns with the Financas. ### Employment Law The Portuguese Labour Code (Codigo do Trabalho, Lei 7/2009) provides strong worker protections. Key provisions: 40-hour working week, minimum 22 days annual leave plus 14 public holidays, probation periods of 90-240 days, mandatory 13th and 14th month salary payments (Christmas and holiday subsidies), and dismissal only for just cause. Fixed-term contracts are limited to a maximum of two years (with renewals up to three times, not exceeding the two-year limit). ### Consumer Rights Consumer protection is governed by Lei 24/96 (Lei de Defesa do Consumidor). Key rights: three-year warranty on goods (extended from two years in 2022), 14-day cooling-off period for distance and doorstep sales, mandatory complaints book (Livro de Reclamacoes) in all commercial establishments. Consumer disputes can be resolved through arbitration centres (centros de arbitragem de consumo) without court proceedings. The Algarve is served by the CIAC (Centro de Informacao Autarquica ao Consumidor) in several municipalities. --- ## Key Legal Terms Glossary - Escritura: public deed of sale, signed at the notary - CPCV: Contrato de Promessa de Compra e Venda (promissory purchase contract) - Caderneta Predial: tax registry certificate - Certidao Permanente: permanent land registry certificate - Conservatoria: land registry office - Camara Municipal: municipal council - NIF: Numero de Identificacao Fiscal (tax number) - Licenca de Habitacao: habitation licence - Sinal: deposit paid under a CPCV - Solicitador: legal practitioner (not a full advogado/lawyer, but authorised for property transactions) - Advogado: lawyer (member of the Ordem dos Advogados) - Financas: tax office (Autoridade Tributaria e Aduaneira) - IMI: Imposto Municipal sobre Imoveis (annual property tax) - IMT: Imposto Municipal sobre Transmissoes (property transfer tax) - Imposto do Selo: stamp duty - VPT: Valor Patrimonial Tributario (tax valuation of property) - PDM: Plano Director Municipal (municipal master plan) - NRAU: Novo Regime do Arrendamento Urbano (tenancy law) - AL: Alojamento Local (short-term rental licence) --- ## Region Information The Algarve (PT-08) is Portugal's southernmost region, bordered by the Atlantic Ocean to the south and west, the Alentejo region to the north, and Spain to the east. It has 16 municipalities and a resident population of approximately 470,000. The regional capital is Faro. The Algarve is governed by the CCDR Algarve (Comissao de Coordenacao e Desenvolvimento Regional) for planning purposes, while each municipality has its own camara municipal for local governance and planning decisions. ## Language All content is in English (UK). Portuguese legal terms are provided with English translations throughout. ## URL https://www.algarve.legal/