Real Estate Due Diligence in Portugal

Real estate due diligence: a legal requirement, not a formality.

Real estate due diligence consists of a thorough investigation and verification of the legal, registration, urban planning, and tax status of a property, as well as the suitability and legitimacy of the parties involved in the transaction. In Portugal, this process has been gaining regulatory density, especially regarding the prevention of money laundering and terrorist financing (ML/TF), which makes compliance the central axis of any responsible real estate operation—whether it involves buying and selling, long-term leasing, or the establishment of guarantees.

The regulatory framework in force

The regime applicable to "real estate entities"—a concept that encompasses mediators, developers, and, where applicable, professionals involved in the transaction—is essentially based on three pillars:

• Law No. 83/2017, of August 18 — establishes measures to combat money laundering and the financing of terrorism, imposing preventive duties of identification, due diligence, communication, refusal and training.
• Regulation No. 603/2021, of July 2 (IMPIC) — regulates the sectoral application of those duties to the real estate market, including limits on cash payments and procedures for reporting suspicious transactions.
• The goAML platform — updated in 2026 — centralizes the systematic communication of real estate operations and transactions to IMPIC and the communication of suspicious transactions to the Financial Information Unit (UIF) of the Judicial Police.

In practice, these regulations translate into the mandatory implementation of a true "know your customer, know your transaction, know your process" system — identifying the origin of funds and the beneficial owner has ceased to be a good practice and has become a legal obligation, with administrative and, in certain cases, criminal liability for those who fail to comply.

Land registry and cadastral records: what will actually change in 2026?

Verification of the registration status remains the primary filter for legal certainty: a permanent certificate from the land registry (to confirm ownership, encumbrances, mortgages, liens, and pending legal actions), an updated property tax assessment document, and, in the case of property owned by a legal entity, a certificate from the commercial registry attesting to the powers of representation of the person granting the deed.

Decree-Law No. 87/2026, of April 15, amended the regime of the simplified cadastral information system and the Single Building Counter (BUPi), extending the free georeferencing of rural and mixed properties until September 30, 2026, and establishing charges from October onwards. For rural and mixed properties without consolidated cadastral registration, confirmation of georeferencing in BUPi has become a relevant step in due diligence, with a direct impact on the security of the title.

Urban planning compliance and technical documentation

Due diligence doesn't end with the land registry. It's essential to confirm the existence and validity of the occupancy permit, the correspondence between the existing construction and the project approved by the municipal council, the current energy performance certificate, and, where applicable, the technical data sheet for the dwelling. Discrepancies between the physical reality of the property and the municipal documentation are a frequent cause of nullity of transactions or the impossibility of executing the deed, and only a careful technical-legal analysis allows for their identification before any contractual commitment.

Money laundering risks

The Portuguese real estate market remains among the preferred destinations for international investment, which exposes it, in an increased way, to the risk of structured operations designed to conceal the illicit origin of funds, including the use of "shell buyers". Compliance due diligence therefore implies the identification of all participants and their respective beneficial owners, the analysis of the economic coherence of the operation and, whenever justified, the communication of the operation to the competent authorities.

Lawyer and notary: distinct roles, complementary responsibilities.

It is common to confuse the intervention of a notary (or a professional authorized to authenticate private documents, under Decree-Law No. 116/2008 of July 4) with the prior legal assessment that falls to a lawyer. The notary confirms the identity of the parties and formalizes the contractual intent at the time of the deed, but does not negotiate, does not assess risks, nor defend the interests of either party. It is the lawyer's responsibility, prior to the deed, to identify risks, negotiate conditions, coordinate the registration, urban planning and tax due diligence, and ensure that the client understands the scope and consequences of what they are about to sign.

The fiscal dimension of the operation — calculation of IMT (Property Transfer Tax), Stamp Duty, potential VAT liability, and the correct application of special regimes, such as the reinvestment of capital gains — also requires coordination between the civil and tax aspects of the transaction, otherwise tax contingencies may arise that only an integrated legal analysis can anticipate and mitigate.

Why is it that only a lawyer can guarantee the legal validity of the transaction?

Guiding checklist (does not replace legal advice)

The following list systematizes the elements typically verified in real estate due diligence. It is merely indicative: its analysis, interpretation, and the conclusions drawn regarding the validity and legal security of the transaction are always the responsibility of the lawyer.

Final note from the team

The strengthening of the regulatory framework in 2026 confirms a clear trend: the legal security of a real estate transaction increasingly depends on specialized and continuous technical monitoring, and less and less on generic checks or reliance on the good faith of the parties.

Our team remains available to assist with real estate due diligence, review and validate contracts, and ensure that each transaction fully complies with current legal and compliance requirements. We recommend that any contract, promise, or draft be submitted for legal review before signing.

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