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Construction & Renovation

Construction of a new house or renovation of an existing one? This can be a big decision when you’re buying in Portugal, since everything’s new and you’re not really familiar with the market. When considering building your home in Portugal, you can choose either to build a new house from scratch or to renovate an already existing structure. This guide will provide you with all the vital, up-to-date information you need to make the best possible decision. We work in cooperation with many construction companies in Portugal and have helped many clients to successfully complete their projects!  

Frederik Pohl
Frederik Pohl, CEO
Find the best construction companies in Portugal.
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Put your trust in Pearls of Portugal

Choosing the right construction companies in Portugal when renovating or building your home is definitely an important decision. However, the local market can be confusing. Most construction services you find on the Internet are big firms that won’t work on a single property – smaller companies who’ll take on your project are much harder to find. When you work with Pearls of Portugal, we set you up with our trusted construction and architecture partners. This way, your project can meet all your expectations and you can avoid issues. 

Construction contract in Portugal

To ensure success in the analysis of the budget presented to you and to minimize possible surprises in the construction process, you should always take into account the following attributes:

  • Detailed description of the idealized project for the property (down to the last detail, such as switches and electrical connections) and list of materials to be used (as far as the architect’s plans are concerned);
  • Utilities connections (water, electricity, gas, etc.) to the house and not only to the construction site;
  • Insulation (against heat and cold) and protection against humidity;
  • Exact location and orientation of the building on the property;
  • Landscaping (if any);
  • Construction and payment plan – which should be done in stages, depending on the progress of the construction;
  • Penalty clause for late completion;
  • Keep a percentage (for example 5% to 10%) of the construction costs as a guarantee against defects;
  • Information regarding how to solve possible disputes;
  • All costs – including architectural fees (unless agreed separately);
  • Registration of the new building.
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Advice when renovating or building a home in Portugal

Even so, the budget values may vary according to the construction systems and materials in use. In order to better compare the various values presented, it will always be important to check the quality ratio between the materials indicated in the possible budgets under analysis.

Before accepting an offer, you should check whether the offer (which should include a 19% VAT share) is only an estimate or whether it comprises a fixed value, since the cost may sometimes increase dramatically due to contractual clauses and possible changes during the construction phase.

Before signing, you should definitely get a lawyer to help you, since construction contracts can be distorted and biased in favor of the construction company, giving few rights to the client. When you work with Pearls of Portugal, we set all of this up for you. 


According to Portuguese law, construction companies are liable for minor defects up to one year after completion and structural defects up to five years. In fact, it is not uncommon for problems to arise during construction, particularly with regard to material defects. If you have problems, you generally have to be very patient and persistent.

A completed building should be checked by a civil engineer for possible defects and a problem report developed afterwards. If there are any deficiencies, the surveyor should determine who is responsible for them, and architects and contractors in Portugal are legally required to take out liability insurance.

Upon completion of the work, the construction company should (where necessary) arrange for a council visit to ensure that the house was built following the plans and building codes. After a satisfactory inspection, the council will issue an habitation license. When this process is complete, the property must be registered with the council, the Tax Office (IRS), and the local land registry (Conservatória de Registo Predial). 

renovate house portugal

Should I renovate or build?

You should be aware of all the necessary procedures to understand whether the right choice is new construction or renovations. Renovations make sense if you want to buy a cheaper property and add your personal touch to it. Designing a new build makes more sense if you have your own idea of the property, if you want to build in a very modern way, or if you want to live in a very specific (rural) location.

Advantages of building a new house in Portugal

Building your dream home – personalized customization

  • By building a home from scratch, you have the opportunity to customize it to meet your tastes, needs, and aspirations, resulting in a space that is entirely tailor-made and comfortable to live in. The choice of design, materials, and finishes is entirely yours.

Valuation potential

  • New construction obviously adds value to a land. The cost of construction added to the value of a well-located plot is predominantly lower than the cost of a property already built on that same site. It can represent the opportunity to live in a good location at a lower cost.

Contemporary design and natural light

  • A new construction makes use of contemporary materials and design, allowing for open space areas and larger windows that let in more natural light. These factors will increase the appeal of the construction itself to younger buyers in the future. 

Environmental certifications and energy efficiency

  • A newly built house must meet the directives of current legislation, resulting in a more energy efficient building, meaning that heating and cooling will be optimized, reducing your costs.

Budget control and medium-term savings

  • Starting new construction gives you full control over the materials you want to use, which means you can invest in the areas you value most – such as the living room or kitchen, saving money elsewhere. Since your home will be newly built, if it is done right, it will save you from many unexpected repairs long term.
Disadvantages of building a new house in Portugal

Project duration and bureaucracy

  • Besides the construction process itself, building a new house in Portugal involves a huge amount of bureaucracy and legal obligations. It can be a long process, especially if you want to build in rural areas where there are new fire protection rules.


  • Building a new house in Portugal usually implies choosing a location further away from the city center, which are mostly historic and therefore subject to certain rules regarding architectural design as well as heritage preservation. However, there is a wide range of locations in residential areas not far from the cities and essential services, and with the advantage of being located in beautiful and natural places, for example by the coast or in the countryside.
construction companies in portugal
Advantages of renovating a property in Portugal


  • Buying a property can allow you to save money on the purchase itself, since the costs of renovating should not exceed the original purchase price – unless your total investment results in an added value that compensates for this. You should check the current market value – per square meter – as saving money will be critical to your investment. It is important to note that while there are places that are very expensive, and renovation costs for rundown houses can be quite high, it will all depend on the state of repair and the ultimate goals of the buyer.


  • If your dream is a house in the center of a city or village, building a new house may not even be a possible option. Renovating is, in this situation, the key to owning a home right in the heart of a historic village or town, with all their charm and liveability. Furthermore, in certain rural areas, new buildings are only allowed if there are already previous buildings on the site, making renovation the only possible option. 

Simplified bureaucracy

  • Portugal has seen increasing investment in urban rehabilitation in recent years, supported by government measures and municipal plans. This has resulted in processes with less bureaucracy for those who are interested in renovating a house or apartment and only want to make changes to the interior space, without touching the overall structure of the building. The first step will be a simple notice to the municipality, accompanied by a declaration of responsibility and supervision by an architect.
Disadvantages of renovating

A more limited choice

  • Choosing to renovate an already built house will limit your choice to the existing market offer and other constraints that would not arise when building a new property. For example, you may not be able to adapt the interior spaces to your taste and/or needs and, in the case of certain historic sites, you are required by law to preserve the original facade.

Quality of construction

  • In an already constructed building, the quality of the pre-existing building materials and structure may hide unpleasant surprises, and thus additional costs may arise in this renovation process.
construction companies in portugal
Drafting a detailed budget for building a house in Portugal

In order to get a detailed and accurate budget, you must take into account the costs of:


  • Knowing these values can allow you to negotiate prices and further clarify the potential appreciation of the house. Before buying land, you should check with the local municipality to see if it has been approved for building purposes. If the land is located on a building lot in Portugal, it will usually already have basic pre-installed water and electricity supply or sewage system infrastructure – which will save you money.

Lot and floor areas

  • Deciding what is the actual required building area will be a plus when it comes to finding a suitable lot.

Construction methods

  • There are many different construction methods and choosing the right one for your wants and needs will warrant a multitude of advantages for you, as well as an understanding of drawbacks to consider, in addition to the associated cost.

Materials and Finishes

  • These are two elements that have a huge impact on the real estate budget. In Portugal, there is a huge variety of companies that sell construction items to the general public – from local stores to chains such as Leroy Merlin or BricoDêpot – with low shipping fees. This gives you a wide range of options and the opportunity to get the lowest prices on the market. However, if you want higher quality finishes such as custom-made marble kitchen counters and/or luxury wood flooring, you should understand how these options will impact your final budget. It’s essential to be conscious throughout the process and make the necessary adjustments in order to keep the budget realistic and avoid possible surprises.

The process of building a house in Portugal

In the construction phase, it is expected that mishaps will inevitably occur. Nothing beats having an architect and a construction company to help resolve them. Adapting to contingencies requires flexibility, but sticking to a budget and knowing that having a signed, well-written contract will be enough to feel protected in case things go wrong. When working with Pearls of Portugal, you can let go of these worries.

Frederik Pohl
Frederik Pohl, CEO
Find the best construction companies in Portugal.
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