Buying and Renting Property in Portugal vs. the U.S.: What Expats Need to Know

 

Moving to Portugal is exciting, but the legal side of buying or renting property can be confusing for expats — especially Americans. That’s because Portugal’s legal system is civil law, rooted in Roman traditions, while the U.S. follows common law, inherited from England.

These differences have a big impact on contracts, property rights, rentals, and even how disputes are resolved. Let’s break it down.

1. Civil Law vs. Common Law

Portugal (Civil Law): Laws are codified in statutes. Judges apply the law as written, with less room for interpretation. Past court decisions don’t have the same “binding precedent” effect as in the U.S.
U.S. (Common Law): Judges play a bigger role in shaping law. Court precedents are often as important as written statutes, and can directly influence future rulings.

For expats, this means you cannot argue your case in Portugal simply by pointing to “what happened before in court.” The law itself is what counts.

2. The CPCV (Contrato-Promessa de Compra e Venda)

In Portugal, property sales almost always involve a CPCV, or promissory contract:
- Signed before the final deed (escritura).
- Includes the conditions of the sale, deadlines, and obligations.
- Requires a down payment (sinal), usually 10–20% of the price.

Penalties:
- If the buyer withdraws, they lose the deposit.
- If the seller withdraws, they must return double the deposit.

In the U.S., “earnest money deposits” are often refundable depending on contingencies (inspection, financing, appraisal). In Portugal, once you sign the CPCV, you’re legally committed.

3. The Role of the Notary

Portugal: The notário is a fully trained lawyer with public authority. They prepare and validate the deed, check legal compliance, ensure taxes are paid, and register the transfer. Without a notary, the transaction is not legally valid.

U.S.: A notary public only witnesses signatures and often has no legal training. Real estate transactions are usually handled by title companies or attorneys.

This is one of the biggest cultural shocks for Americans: in Portugal, the notary is central to the process.

4. Property Registration

Portugal: Ownership must be registered in the Conservatória do Registo Predial (Land Registry). Once recorded, ownership is guaranteed and protected by the State.

U.S.: Property records are kept at the county level. Because mistakes or disputes can happen, buyers often rely on title insurance.

In Portugal, title insurance doesn’t exist — it’s not needed, since registration is definitive.

5. Renting and Tenant Rights

Portuguese rental law (arrendamento urbano) strongly protects tenants:
- Evictions take time and require court intervention. A landlord cannot simply “change the locks.”
- Leases have minimum terms, and renewal rules favor the tenant.
- Deposits (caução) are usually 2–4 months’ rent, paid directly to the landlord. There is no escrow system.

In the U.S.:
- Rules vary by state, but landlords often have faster eviction procedures.
- Deposits are sometimes held in escrow and must be returned promptly, often with interest.

For American expats: expect stronger tenant rights in Portugal, but also more landlord caution when choosing tenants.

6. Litigation Culture

U.S.: Litigation is common, expensive, and can lead to large damages. “Sue first, negotiate later” is not unusual.

Portugal: Litigation is slower, less common, and damages are modest. Mediation or arbitration is often encouraged before going to court.

Conclusion: What Expats Should Expect

• More formalities, paperwork, and notarial involvement than in the U.S.
• A slower process, but one that provides very strong protection once completed.
• Rental rules that favor tenants, which can be good if you rent, but tricky if you buy to let.

Portugal’s legal system may feel heavy at first, but once you understand the basics, it offers clarity, security, and stability.

👉 Are you an expat thinking of buying or renting in Portugal? Understanding these differences is the first step to a smooth experience. If you’d like guidance through the process, feel free to get in touch — I help expats navigate the Portuguese property market with clarity and confidence.