1. Illegal Construction and Missing Permits

The Risk: One of the most serious issues when buying Portuguese property is discovering unauthorized alterations or structures built without proper permits.

Warning Signs:

• Listings advertising “recently refurbished” without mentioning permits
• Garage conversions into living spaces
• Attic conversions completed informally
• Pools or extensions not present in original plans

How to Protect Yourself:

• Always verify the habitation license (licença de habitação) for any home you’re considering purchasing
• For renovated properties, ensure all works were properly licensed
• Consider hiring an engineer for thorough inspection
• Contact the local council’s planning department to confirm the property matches approved plans
• Request documentation showing all structures are legally authorized

Illegally built structures can become your liability after purchase, potentially resulting in removal orders from authorities.

2. Hidden Property Debts

The Risk: In Portugal, certain debts stay with the property rather than the seller, potentially becoming your responsibility after purchase.

Common Hidden Debts:

• Unpaid property taxes (IMI)
• Outstanding utility bills
• Condominium fees in arrears
• Liens from unpaid contractors
• Existing mortgages not discharged

Protection Strategy:

• Have your lawyer obtain debt-free statements for all potential liabilities
• Insist that the seller clear all pending bills before closing
• Explicitly state in the purchase contract that the property comes free of all charges and debts
• If the seller has a mortgage, ensure the bank provides a payoff statement
• Verify mortgage cancellation at deed signing (the notary often coordinates this with bank representatives)

Remember: If a debt or mortgage isn’t properly cleared, you could “inherit” it along with your new property!

3. Tenant and Occupancy Issues

The Risk: Buying a property with existing tenants or occupants can create significant complications, especially in Portugal where tenant protection laws are strong.

What You Need to Know:

• Rental contracts from before 1990 often include lifelong tenancy rights with controlled low rent
• Eviction options are limited and may require substantial compensation
• Even family members of the seller occupying the home can create complications

Red Flags:

• Properties being sold below market value with current tenants
• Sellers reluctant to discuss current occupancy status
• Refusal to include “livre de pessoas e bens” (free of people and possessions) clause in contracts

How to Verify:

• Always confirm if there are any existing tenants or occupants
• Ensure your promissory contract explicitly states the property will be vacant upon completion
• Be aware of scams, particularly in Porto, where groups have rented properties and then “sublet” via fake leases to foreigners.

4. Title Fraud

The Risk: While not common, title fraud involves someone falsely claiming ownership of a property to sell it.

Prevention Measures:

• Work exclusively with reputable notaries and lawyers who will verify seller identity
• Never skip the formal deed process or attempt “under-the-table” transactions
• Ensure all rightful owners are signing off, especially with inherited properties
• Be cautious with properties that have complex ownership histories due to inheritance or divorce

Important Note: Portuguese inheritance laws can result in multiple co-owners for a single property. All must consent to the sale, either personally or through legal proxies.

5. Unlicensed Agents and Middlemen

The Risk: Unlicensed individuals acting as real estate agents operate illegally in Portugal and provide little recourse if problems arise.

How to Identify Legitimate Agents:

• Verify that any real estate agent has a valid AMI number (issued by the Portuguese government)
• Be wary of “friends of the owner” or random individuals on social media offering to broker deals
• Legitimate agencies will have physical offices and professional documentation

Verification Process:

• All real estate agents must be licensed in Portugal
• You can verify an agency’s AMI number through the IMPIC website (Instituto dos Mercados Públicos, do Imobiliário e da Construção)
• Always insist on proper promissory contracts and legal representation

6. Payment and Wire Transfer Scams

The Risk: Large money transfers for property purchases can attract sophisticated cybercriminals attempting to intercept funds.

Safety Protocols:

• Confirm bank details directly with your lawyer or seller in person or via verified phone calls
• Be alert to emails claiming “new bank account details” – these are often fraud attempts
• Double-check all IBANs before transferring money
• Consider negotiating that deposits be held in escrow rather than transferred directly to sellers
• Never pay the full purchase price before the deed is signed

Best Practice: Only transfer funds at the official closing or to a trusted escrow account in exchange for signed documentation.

7. Renovation Contractor Scams

The Risk: If purchasing a property that needs renovation, selecting unreliable contractors can lead to financial loss and substandard work.

Protection Strategy:

• Obtain multiple quotes from different contractors
• Thoroughly check references and previous work
• Never pay 100% upfront – structure payments based on completion milestones
• Verify that contractors are properly registered and insured
• Use written contracts for all significant renovation work

Common Complaint: Expat communities frequently report issues with builders who disappear after receiving payment or complete substandard work.

8. Timeshare and Holiday Club Pitches

The Risk: Particularly in tourist areas like the Algarve and Madeira, aggressive sales tactics for timeshares or vacation clubs are sometimes disguised as real estate investments.

Warning Signs:

• Invitations to “free weekend stays” with mandatory sales presentations
• Properties offered at suspiciously low prices with limited annual usage rights
• High-pressure sales environments with “today only” offers
• Difficulty understanding the full contractual obligations

Important Distinction: While these arrangements may be legal if properly structured, they should not be confused with actual property ownership and often involve ongoing annual fees.

Protecting Your Portuguese Property Investment

While Portugal generally provides a safe and transparent environment for property purchases, foreign buyers should exercise the same—if not greater—level of due diligence as they would in their home countries.

Key Protection Strategies:

• Assemble a team of qualified local professionals (lawyer, notary, property inspector)
• Thoroughly verify all documentation related to the property
• Follow legal procedures diligently without shortcuts
• Be particularly vigilant regarding property history, occupancy, and financial obligations

5 dicas para quem quer comprar casa em Portugal
byu/JoaoRochaOnReddit inliteraciafinanceira

https://www.deco.proteste.pt/dinheiro/comprar-vender-casa/dicas/como-funciona-credito-habitacao-imigrantes-emigrantes