A quiet problem with structural scale
For decades, one of the most difficult issues affecting property ownership in Portugal has also been one of the least visible: properties tied up in undivided estates, where a lack of agreement between heirs could prevent any decision from being made for years. Unused homes, poorly maintained buildings, unmanaged land, or assets that simply never reached the market. A legislative change currently being prepared aims to change this situation.
What has been approved, and what is still missing
On 17 July 2026, Parliament approved a legislative authorisation allowing the Government to create a Special Procedure for the Sale of Property Included in an Undivided Estate. The decree passed by the Assembly of the Republic was subsequently promulgated by the President of the Republic on 10 August. However, there is an important distinction: the new mechanism cannot yet be used in practice. The authorisation allows the Government to approve the legislation that will create and regulate the procedure. Only once that legislation has been approved, published and entered into force will it be possible to make use of the new process.
What is being proposed
The main change is significant. Where a property remains part of an undivided estate because the heirs cannot reach an agreement, a single heir may be able to initiate judicial proceedings aimed at selling the property, without first obtaining the consent of all the other heirs. The objective is not to allow one heir to sell a property belonging to the estate unilaterally. Rather, it is to create a judicial mechanism capable of resolving prolonged deadlock while safeguarding the financial rights of the other interested parties. As a general rule, the mechanism is expected to apply to estates that have remained undivided for more than two years due to a lack of agreement among the heirs. Where no probate or inventory proceedings are already under way, an application may be submitted through the new special procedure. Where such proceedings are already pending, the matter should be dealt with within that process.
The sale will not be decided freely by one heir
This is probably the most important point in understanding the reform. An heir will not suddenly be able to choose the buyer, set the price and sell the property unilaterally. What they may be able to do is ask the court to initiate the sale process. The proposed framework includes an independent valuation of the property to determine its value and establishes electronic auction as the standard method of sale, with the aim of ensuring that the asset is sold transparently and at market value. The remaining heirs retain their right to their respective share of the proceeds from the sale. In addition, one or more heirs may have the opportunity to acquire the property themselves, meaning that it does not necessarily have to leave the family.
Certain situations will be protected
The approved version introduces important safeguards. The family home will, in principle, be excluded from this special procedure where the protection of a surviving spouse or surviving partner is concerned, unless express consent is given. Certain other situations will also fall outside the scope of the regime, including estates subject to insolvency proceedings and cases where there is a valid agreement to maintain the estate undivided. Likewise, where all heirs wish to keep the estate undivided and expressly agree to do so, the new mechanism is not intended to force a sale.
Why this change could matter to the property market
The scale of the issue helps explain the purpose of the reform. According to figures presented by the Government, the 2021 Census identified approximately 485,000 vacant dwellings in good habitable condition, around half of which were unoccupied with no intention of being sold or rented. The Government considers that part of this housing stock may be linked to undivided estates. The scale is even more striking in relation to rural property: the Government estimates that at least 3.4 million rural properties are held within undivided estates, out of an estimated total of 11 million rural properties. Not all of these properties are tied up because of disputes between heirs, and it would be misleading to assume that the new legislation will automatically bring millions of assets onto the market. But its potential impact is still significant. By creating a legal route out of situations where disagreement continues for years, the new regime may help resolve unused or underutilised property, encourage agreements between heirs and, in some cases, bring additional properties onto the market.
The impact may begin before the first sales take place
There is another, less obvious effect. The existence of a mechanism capable of overcoming deadlock may change the negotiations between heirs themselves. Until now, an heir who refused any proposed solution could, in certain circumstances, prolong the undivided status of an estate for a considerable period of time. If all parties know that, once the legal conditions are met, there is a route through the courts, the incentive to reach an agreement beforehand becomes stronger. Indeed, one of the Government's stated objectives is to encourage agreement between heirs before judicial intervention becomes necessary.
For property owners, buyers and investors
For families with property held within an undivided estate, this reform may provide an alternative where negotiations have reached an impasse — but it does not remove the need to assess each succession case individually. For buyers and investors, it may mean that properties previously tied up in inheritance disputes gradually become available on the market. And for the property market as a whole, the measure addresses a particularly relevant structural issue in Portugal: property exists, but part of it remains outside the market for legal, family or succession-related reasons. Unlocking an inheritance will not solve the housing problem. But preventing a single disagreement from keeping a property indefinitely without a clear future may contribute to more efficient use of the existing housing stock.
In summary
What has been approved? A legislative authorisation allowing the Government to create a Special Procedure for the Sale of Property Included in an Undivided Estate. Will one heir be able to sell the property alone? No. An heir may be able to ask the court to initiate the sale process, provided that the legal requirements are met. When will the procedure be available? Not immediately. The Government must still approve the legislation that gives effect to the legislative authorisation. Is there a minimum period? The proposed regime is generally intended for situations where more than two years have passed since the opening of the succession without an agreement being reached. How will the value be determined? An independent valuation is expected, together with a sale mechanism designed to secure market value, with electronic auction as the standard procedure. Do the other heirs lose their rights? No. They retain their rights to their respective share of the proceeds, and additional safeguards are also foreseen. Can every home be included? No. The approved version provides for exclusions and specific protections, including in relation to the family home of a surviving spouse or surviving partner.
A premise that changes
The legislative change does not automatically turn inherited property into property available for sale. But it changes an important premise: a lack of unanimity may no longer mean that a property can remain tied up indefinitely. In a market where limited supply remains one of the central challenges, this could have implications extending well beyond succession law.
Do you own a property that forms part of an undivided estate? Every situation is different. If you are considering the sale of an inherited property, Valle Real Estate Group can help you understand its position in the market, assess its value and prepare the next steps towards a potential sale, alongside any necessary legal advice. Speak to us for a confidential assessment of your property.
Talk to usThis article is for information purposes only and does not constitute legal, tax or succession advice. Each situation should be assessed according to its specific circumstances.
