Habitation Licence in Portugal: Why It Matters When You Buy

The habitation licence (licença de utilização, often still called licença de habitação) confirms that a building, or a unit within it, may legally be used for a specific purpose, such as housing. It is issued by the municipality (Câmara Municipal) once construction or major works are finished and comply with the approved project.

US buyers will recognise it as the Portuguese counterpart of a certificate of occupancy. In the UK, the closest equivalents are the building regulations completion certificate and planning consent. The difference: in Portugal, missing or wrong licences are far more common, especially in older and rural homes, so checking is essential.

What the licence shows

• the building or unit it applies to,
• the authorised use: housing (habitação), commerce, services or other,
• the number and date of the licence and the municipality that issued it.

The authorised use matters as much as the licence itself. A unit licensed as an office or shop may not simply be used as a home, and banks usually will not finance it as such. The use should also match the tax record (Caderneta Predial).

Why it matters for buyers

Since January 2024, the licence no longer has to be shown when the deed is signed. That does not make it less important:

• Mortgages: most banks still require it.
• Renting out: a residential lease must state the licence; holiday rental (Alojamento Local) registration generally requires it too.
• Resale: your future buyer’s bank will ask for it.
• Legality: using a building without the required authorisation can be fined, and extensions, pools or annexes not covered by the licence may be illegal.
• Utilities and insurance: new connections and some insurers may ask for it.

Our advice: do not buy an existing home without a valid licence or a pre-1951 exemption certificate, unless the price fully reflects the cost and uncertainty of regularising it.

Homes built before 1951

Many older homes have no licence because they were built before licensing became generally mandatory with the urban building regulations of 1951. Instead, the municipality can issue a certificate confirming the building predates that requirement. Some cities, such as Lisbon and Porto, had their own rules earlier, so the exemption is not automatic. Check whether later extensions or changes were licensed: an old house with a new, unlicensed extension is a common problem.

How the licence is obtained

For new buildings or major works, the owner or builder applies to the municipality after completion. The application is based on declarations from the professionals responsible for the works and, where required, an inspection. If you buy off-plan or a new build, the developer is responsible for obtaining it before the deed.

If a house has no licence, it must be regularised (legalização): an architect prepares plans of the existing building, any non-compliant parts may have to be adapted or demolished, and the municipality decides. This can take months and cost far more than the municipal fees, which vary by municipality.

What buyers should check

1. Is there a licence, or a pre-1951 exemption certificate, for the property?
2. Does the authorised use match how you intend to use it?
3. Do the licence, the approved plans, the land registry certificate and the property itself match? Pools, annexes and converted spaces are often missing.
4. For apartments: is the licence for the individual unit in the building’s division (propriedade horizontal)?
5. For extensions or renovations: were they licensed?

You can request the municipal building file (processo camarário), including approved plans, from the municipality. Have your lawyer check it before you sign the promissory contract, and make a valid licence a condition of the purchase.

How we can help

As your buyer’s agent, we check licences, plans and the municipal file with your lawyer before you commit. Book a free consultation.