Buying a house without presenting the usage licence to use (licença de utilização) is one of the 2024 real estate market innovations, part of the Portuguese Urbanistic Simplex measures. Recent regulations in Portuguese legislation aim to increase housing supply, reduce costs, and streamline transactions. This is the Portuguese Urbanism Simplex, in effect since the beginning of 2024.

On January 4, 2024, the President of the Republic promulgated the decree to reform and simplify urban licensing, with the main objective of promoting more housing (Mais Habitação) in Portugal. The Government aims to reduce ancillary procedures in urban planning to simplify transactions and streamline company operations.

How does the Portuguese Urbanistic Simplex influence the buying and selling of properties?

It’s outlined in Decree-Law No. 10/2024, dated January 8, the simplification of urban licensing. It mentions the measure objective is to achieve “zero licensing,” eliminating unnecessary administrative acts. This measure covers the areas of urban planning and land use and aims to facilitate the creation of new spaces for affordable housing construction. These actions aim to provide low-cost housing and reduce the time to complete real estate projects.

• From now on, the usage licence or housing technical form is not required to purchase or sell a property. This measure does not imply selling a house without a licence, but rather without the obligation to present the usage authorization at the deed;

• Municipal or inter-municipal companies linked to the State conducting works related to the public sector, especially for housing, such as student residences, will be exempt from presenting the urbanistic licence and prior control acts;

• There is now also a tacit deferment regarding construction licences. In other words, if the deliberations are not given within the established deadlines, individuals can proceed with the construction project;

• The construction permit is no longer mandatory, being replaced by the payment receipt of fees;

• The obligation to obtain the urbanistic licence or make prior communications is eliminated when there is already a case of exemption or dispensation from prior control by the Municipalities;

• The usage authorization is also eliminated when there is prior control of the work in question, with only the submission of the project documents being mandatory;

• Opt for prior communication, with a deadline of 20 days, in case of a change of use, considering the request accepted in the absence of a response from the Municipality;

• Transform commercial properties into housing. This will increase the number of residences, and this conversion will dispense with condominium deliberation (the measure will be in effect from March 4);

• Simplification of the process of requalifying rustic land for urban use, provided that construction results in buildings at controlled costs or intended for public housing.

Interesting fact:

In the measures presented, bidet use is no longer mandatory, a ceramic fixture famous in Portuguese bathrooms. Originating from France in the 17th century, bidets were included in the General Regulation of Urban Buildings (RGEU) in Portugal on August 7, 1951, with alterations the following year. This regulation stipulated that sanitary facilities must have a sink, bathtub, toilet, and bidet. Therefore, only in 2024 was this law revoked, and now sanitary facilities can have any equipment.

Administrative process simplification:

• Delegation of powers to handle municipal services in new situations, such as granting construction licences, avoiding overburdening municipal councils;

• Response times will be counted from the document submission;

• These deadlines are suspended if the individual, within 10 days, does not respond to requests for information or document submissions from the public administration;

• The public administration can only request documents or information once during the process;

• A new online platform is planned, mandatory for all municipalities from 2026, to streamline processes. However, municipalities will continue to receive these cases, and online processing is not exclusive.

This set of measures brings several advantages to real estate processes in Portugal, such as:

• Increased availability of properties in the market, promoting a smoother transaction. The absence of licensing will bring houses to the market, and correctly informed buyers may not find inconveniences in this situation;

• Streamlining the sales process. Agents won’t have to wait months for the utilization licence, which used to delay the deeds of buying and selling properties or lead to breaches in the promise of sale contracts;

• Reduction in administrative costs. Obtaining the utilization licence certificate became costly due to associated fees and expenses.

The changes in the Portuguese Urban Simplex can also bring disadvantages, some of which are:

• Property buyers, such as families or investors, may find themselves less protected with the streamlining of real estate processes, potentially acquiring properties that do not comply with safety rules;

• Unlicensed properties may be sold more easily. Illegal properties or unauthorized constructions could be (completely or partially) demolished if there are complaints from neighbours or inspections by the municipality;

• An increase in litigious cases is expected until buyers become more cautious in their property purchases. However, buyers should always request the usage licence to safeguard against potential issues. It becomes a moral responsibility of sellers and agents to alert buyers to this fact;

• Obtaining housing credit from a banking institution might become more challenging without the property’s usage licence. Although licences are not mandatory, banks may require this document to grant housing credit. This practice is adopted to protect banks in case of default by the buyer.

To protect buyers from potential drawbacks or disadvantages, it is crucial to demand all property documentation, including the usage licence (although not obligatory) or the housing technical sheet.

Always count on me as your partner in real estate choices. Opt for secure transactions, keeping in mind the new measures of the Portuguese Urban Simplex.