The succession law in Portugal regarding real estate assets obtained by foreigners

1 September, 2022

News article by Mafalda Cunha Luís, Lawyer and Diana Ribeiro, Lawyer - International Atlantic Services

Portugal has become more and more an attractive country for the relocation of foreigners. Proof of that has been the success that the residency program by investment (the Golden Visa program) has been having since it was implemented in 2012. Under the scope of the program, one of the most common ways of investment was the acquisition of real estate in Portugal.

Following the acquisition of the property, and as lawyers that have assisted several clients with such diligences, one of the questions most asked to us was what happens to the property I acquired in the event of death?

Until 2015, the succession of the deceased's property would be governed by his personal law, i.e. the law of his nationality.  On August 17, 2015, entered into force the Regulation (EU) no. 650/2012 of the European Parliament and of the Council, of July 4, 2012. This Regulation has established, as a rule, that the law applicable to the succession will be the law of the habitual residence of the deceased at the time of his death.

Despite the application of the law of "habitual residence" (a concept that will only be ascertained at the date of death of the deceased), the Regulation provides exceptions. The multiplicity of particularities in the Regulation may create situations of legal uncertainty for the relatives of the deceased, as the authority that will regulate the succession may apply a law that was not foreseen by the relatives of the deceased. Therefore, in order to avoid unpredictable situations and to provide legal security for our investors, it is advisable to execute a will, in which not only the law that will be applied at the time of death is defined, but also who will be the heir of the investor who will inherit the property (the property may be bequeathed to his/her spouse, son/daughter, parent, or a third party).

The possibility of executing a will applies to nationals of EU countries and to nationals of non-EU countries. Furthermore, a will can be executed by the owner of the property and by his/her spouse, if they are married under the regime of total sharing of assets or community of assets acquired during the marriage.

The will must be drawn up in Portugal and cannot be executed by Proxy. It should take place after the deed of purchase of the property by the investor is performed. Two witnesses are required to make the will, and they may be foreigners, but must understand/speak Portuguese. The will is only written in Portuguese and if the investor does not understand Portuguese, a translator (who cannot be one of the witnesses) will have to be present.

If you have any further questions regarding the possibility of executing a will, please do not hesitate to contact your case responsible.


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