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Simplex - More Than Never a Real Estate Lawyer Is Vital

Feb 26, 2024

Teresa Arriaga e Cunha

Teresa Arriaga e Cunha | Lawyer

The DL 10/2024 – Portugal’s Simplex Urbanístico - was officially released on 8th January, with the goal of streamlining licensing procedures in urban planning, land use management, and industrial sectors. This decree-law is designed to simplify the current licensing processes by eliminating unnecessary licenses, authorisations, actions, and procedures, following a "zero" licensing approach.

The legislation will be enforced on 4th March 2024, with certain amendments already active since the 1st of January 2024 and others scheduled for implementation later. As part of this, one of the regulatory changes effective from 1st January 2024 involves streamlining the procedures concerning property transactions. This simplification eliminates the need to present or verify the housing data sheet and the authorization for use at the time of closing the deal, as their relevance or necessity is no longer required to be confirmed.

It is important to highlight that the housing data sheet is a crucial document for buildings constructed or modified post 30th March 2004. This sheet outlines the technical and functional aspects of urban residential buildings upon completion of construction, reconstruction, extension, or alteration. Its purpose is to enhance consumer rights, providing information and safeguarding economic interests in the purchase of urban residential properties, while also fostering market transparency.

Similarly, the authorisation for use is intended to confirm the successful completion of the urban development project and adherence to regulations, as follows:

The finished work aligns with the approved architectural project, the exterior arrangements and the requirements of the respective licence or prior notice;
The intended use complies with the legal and regulatory standards that establish the permissible uses and utilisations.

In this context, the absence of a requirement for buyers to provide these documents during the closing process can potentially lead them into a situation that may not comply with the law.

When a building is not properly licenced, meaning it was constructed without approval from the Town Hall, it is deemed illegal. In the future, whether through official action or a third-party complaint, the Town Hall may inspect the property. If they find any unauthorised constructions, the owner may receive a notification to legalise those areas, potentially facing fines. To rectify this, a legalisation process must be initiated at the Town Hall with the guidance of an Architect.

Moreover, if legalisation is unattainable (e.g. due to limitations in municipal licencing requirements outlined in the Local Municipal Plan that prohibit further construction), the property owner might need to dismantle the unauthorised structure.

If the owner fails to address the irregular areas within a specified timeframe, the Town Hall has the authority to assume possession of the property to carry out the required works for their rectification. The owners will bear the incurred costs.

We anticipate that banks will continue to request these documents, based on the scrutiny of the licencing entity, to facilitate a favourable response to the financing. In the absence of these documents, a thorough evaluation of the project will be necessary, incurring additional expenses for the buyer.

As urban planning simplification measures are implemented, they notably favour major investors and developers in real estate while inadvertently disadvantaging medium and small-scale buyers. These are the buyers genuinely interested in properties that may lack proper legalisation for various reasons.

In summary, real estate transactions can be intricate due to the involvement of legal documents and regulations. Additionally, sellers, landlords, or real estate agents may conceal crucial details from buyers regarding violations and defects that could impact the property's value.

LVP Advogados has the expertise to navigate these complexities, guaranteeing compliance with all legal requirements and safeguarding your interests. This ensures a seamless and successful real estate transaction, shielding you from potential disputes or legal complications in the future.

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Benefits of Personal Income Tax for Young Professionals

by Diogo Pedro • 07 May, 2024

Over the past four years, young workers who earned their first income as employees or self-employed individuals have been eligible for a tax benefit in their personal income tax, known as 'IRS Jovem”. This benefit is intended to offer young workers the possibility of minimising their tax obligations, allowing for a higher amount of disposable income. To enjoy this benefit, taxpayers are required to comply with the following requirements: Have a complete course of level 4 or higher studies on the National Qualifications Framework (high school level acquired through double certification and aimed at pursuing higher education such as a bachelor’s degree, a master’s degree, or a PhD). Age between 18 and 26 years old. Considered independent, i.e., no longer included in the parent’s household for tax purposes. The specified age limit includes individuals up to 26 years old, inclusive. However, this limit is extended to 30 years old for taxpayers who have completed a degree at level 8 of the National Qualifications Framework (PhD). In 2024, this tax benefit has been improved, with increased tax exemption rates and an expanded range of applications over time. In this sense, upon completing the course of studies required, the individual may qualify for an exemption from personal income taxes for a duration of 5 years, as explained in the following details: 100% of the income in the first year with a cap of 40 times the Social Support Index – “IAS” value (€20.370,40). 75% of the income in the second year with a cap of 30 times the IAS value (€15.277,80). 50% of the income in the third and fourth year with a cap of 20 times the IAS value (€10.185,20). 25% of the income in the fifth year with a cap of 10 times the IAS value (5€.092,60). Moreover, the exemption can only be used once by the same taxpayer and should be requested when preparing and filing the personal income tax return. It is also important to acknowledge that this benefit has implications for withholding tax, allowing adjustments to the value subject to withholding tax. However, be aware that, while the withholding tax rate applied corresponds to the total amount of income earned, it is only applicable to the portion that is not exempt. If you have any questions or need assistance with this or related matters, feel free to reach out . We would be delighted to help you.

Being an urgent process, this legal action has priority over legal actions not deemed to be urgent.

My application has been pending for months with the Immigration Office - AIMA. What can be done?

by Sara Ferreira • 29 Apr, 2024

It is known to the general public that the Portuguese Immigration Office (AIMA) has not been able to timely approve residency authorisation requests within the legal timeframe defined to do so, thus resulting in residency applicants having their applications on hold for months, in some cases even years. One way to tackle this inaction from the Immigration Office is to file a legal action, namely the Subpoena for rights, freedoms and guarantees of the citizens.