For decades, a single reluctant heir could hold an entire family’s property hostage. That is about to change.
Somewhere in Portugal, there is a well-preserved apartment in a Lisbon neighbourhood sitting empty. It belongs, technically, to five siblings who inherited it from their mother years ago. Two want to sell, two are indifferent, and one refuses to engage at all. The property is clean, structurally sound, and ready to house a family — yet it will remain closed until everyone agrees. Or until a court resolves the impasse, which in Portugal can take the better part of a decade.
This story is not unusual. It is, in fact, the story of roughly half a million urban properties across the country.
The numbers are striking: approximately 3.4 million rural plots and around 500,000 urban homes are currently locked in succession deadlocks across Portugal. Of those urban properties, 250,000 are in good condition but sit empty, and 130,000 are in urgent need of rehabilitation. These are houses without life, land without management — patrimony frozen by the disagreement or simple inertia of a single heir.
This situation has had serious knock-on effects. Forest land left unmanaged by fractured inheritances has contributed directly to Portugal’s devastating wildfire crisis. Urban properties left vacant have worsened an already acute housing crisis in cities where rents and sale prices have spiralled beyond the reach of ordinary residents.
The legal architecture that allowed this to happen was not malicious — it was simply old. Under existing rules, unanimous consent among all heirs was required before any property in an undivided estate could be sold. Article 2101 of the Civil Code grants any co-heir the right to demand partition, and Article 1412 establishes that no co-owner is obliged to remain in a state of indivision — but in practice, these rights ran headlong into the need for full agreement or the grinding slowness of judicial inventory proceedings, which routinely dragged on for years. The result was that millions of Portuguese remained, for decades, trapped in exactly this situation.
On 27 March 2026, the Council of Ministers approved legislation establishing a Special Procedure for the Sale of Undivided Immovable Property. In practice, it is now possible for a single heir to initiate the sale of an urban or rural property simply by expressing the wish to sell — without the unanimous agreement of all co-heirs being a precondition for starting the process.
The proposal — filed with Parliament on 16 April 2026 as Legislative Proposal 69/XVII/1 — authorises the government to introduce a series of changes to succession law, including the creation of this Special Procedure. Any heir can now judicially compel the sale of an undivided property without needing the consent of the others.
The trigger point is time. Any heir may initiate the process two years after the acceptance of the inheritance, if no agreement on partition has been reached. After this period, a single heir can start the sale procedure for one or more properties in the estate.
Crucially, the other co-heirs or the surviving spouse can also request the sale of additional properties within the same estate, either together or separately from those identified by the initiating heir. This prevents the process from becoming a tool of pressure by one party alone — all heirs can participate once the mechanism is triggered.
The reform goes beyond the sale mechanism. The legislation also introduces two entirely new legal concepts to Portuguese succession law: the testamenteiro com poderes de partilha — an executor empowered to carry out the distribution of assets — and arbitragem sucessória, or succession arbitration, through which the government hopes to divert inheritance disputes away from the already burdened court system.
The executor with partition powers is a particularly significant innovation. Previously, a testator could appoint an executor, but that person had no authority to actually divide the estate. Under the new framework, a person can now, while still alive, designate someone specifically tasked with carrying out the division — potentially sidestepping family conflict entirely before it begins.
Succession arbitration similarly seeks to resolve disputes through a faster, private process, rather than the traditional judicial inventory that has historically consumed years and drained families financially.
The implications for Portugal’s housing market are significant. A study by the Institute for Housing and Urban Rehabilitation (IHRU) found that approximately 250,000 homes in good condition are currently sitting outside the rental and sale markets. Unlocking even a fraction of these properties would meaningfully increase supply in a market that has suffered from chronic undersupply for years.
The reform is framed explicitly as part of the broader Construir Portugal housing package — a legislative push that also includes cuts to construction VAT, reductions in rental income tax, and the IMT changes for non-resident buyers. The government’s logic is straightforward: the housing crisis cannot be solved from the supply side alone if millions of existing properties remain legally paralysed.
For foreign buyers and investors, the practical consequence is also worth noting. Properties that have been stuck in inheritance limbo for years — often sold at significant discounts when they finally do reach the market — may now come to market more frequently and more predictably. Conversely, heirs who had previously assumed they could delay a sale indefinitely now face the real prospect of a co-heir forcing the process.
It is important to note the law’s current status. The legislative authorisation must still be debated and approved by the Assembly of the Republic. As of June 2026, the proposal is in parliamentary proceedings and has not yet entered into force. The timeline for passage is uncertain, and amendments remain possible.
For estates already open at the time the law enters into force, the two-year waiting period will be counted from the date of entry into force — not from the original date of death or acceptance. This means families currently locked in inheritance disputes will not face an immediate trigger, but the clock will start from day one of publication.
Portugal’s undivided inheritance problem has been an open secret for decades — widely acknowledged, structurally damaging, and stubbornly resistant to resolution. The new legislation, once enacted, would represent the most significant reform of Portuguese succession law in a generation. It will not resolve every dispute, and it will certainly be tested in court. But for the hundreds of thousands of families and co-heirs trapped in frozen estates, it offers something that the current system never could: a way out, even when not everyone agrees to take it.
Anyone with an interest in Portuguese property — whether as a potential buyer, a co-heir, or an investor — should follow the parliamentary process closely. When the law passes, the Portuguese property landscape may look quite different, very quickly.
Taken together, the Construir Portugal measures represent the most coordinated housing policy intervention Portugal has attempted in a generation. They work across the full chain of the supply problem: construction costs reduced through VAT; new projects enabled through simplified licensing; capital unlocked from dormant assets through the capital gains regime; rental income made more attractive through lower taxation; frozen properties mobilised through the inheritance reform; and the next generation given a viable path into ownership through exemptions and state guarantees.
The measures are not permanent. Most fiscal incentives are explicitly time-limited, with a window that closes on 31 December 2029. That deadline is the strategy’s central mechanism: create a concentrated period of favourable conditions to catalyse supply, then reassess. Whether four years is long enough to produce the structural shift the government is seeking will depend on how quickly the construction sector can scale, how effectively local authorities implement the licensing reforms, and whether investors treat the time-limited nature of the measures as a reason to act urgently or a reason to hesitate.
For those who understand the rules and are positioned to move within them — landlords with properties to let, owners of secondary assets to sell, developers with qualifying projects, young buyers who have been waiting for the right moment — the window under Construir Portugal is open. The question is whether it will be used.
English • Portuguese • Spanish • German