What is Propriedade Horizontal
Propriedade Horizontal is the Portuguese legal framework governing multi-unit buildings where individual units are privately owned while common areas are collectively owned. The term literally translates to "horizontal property" and dates to the Portuguese Civil Code (Código Civil).
When you purchase an apartment in Portugal, you're not buying a simple standalone property. Instead, you acquire two distinct legal interests: exclusive ownership of your individual apartment (your autonomous fraction) and co-ownership of all common building areas alongside other owners.
This dual ownership structure creates both rights and obligations that differ significantly from detached house ownership or condominium systems in other countries.
Understanding Your Ownership Rights
The Autonomous Fraction
Your autonomous fraction (fração autónoma) is the apartment unit itself. You have exclusive ownership and control over this space, including:
- Interior walls, floors, and ceilings
- Windows and doors opening to the exterior
- All installations serving only your unit (plumbing to the first connection point, electrical wiring within your apartment)
- Any private balconies or terraces designated for your exclusive use
You can renovate, decorate, and use your autonomous fraction as you wish, provided you don't compromise the building's structural integrity or disturb other owners' peaceful enjoyment of their units.
Common Parts Co-Ownership
Simultaneously, you co-own all common building elements with every other owner in the building. Common parts include:
- Building structure (foundation, load-bearing walls, roof)
- Main entrance, hallways, stairways, and elevators
- Common areas (lobby, garage, gardens, swimming pool, gym)
- Building systems (central heating, water supply to distribution points, sewage to collection points)
- External walls and building facade
No single owner can unilaterally modify or dispose of common parts. Changes require approval through the general assembly decision-making process.
The Permilage System Explained
Calculating Ownership Percentage
Every autonomous fraction has an assigned permilage (permilagem), expressed as a fraction or percentage of the total building value. This percentage determines your share of common part ownership and your proportional financial obligations.
Permilage is calculated based on multiple factors:
- Floor area of your apartment
- Location within the building (higher floors sometimes valued more than lower floors)
- Sun exposure and views
- Number of parking spaces allocated
- Storage room size
Example: In a building with total permilage value of 1,000, if your apartment has permilage of 50, you own 5% of the building's common parts.
The permilage calculation appears in your property deed (escritura) and is registered with the property registry (Conservatória do Registo Predial). It cannot be changed without unanimous consent of all owners, as it would affect everyone's proportional rights.
Why Permilage Matters
Your permilage percentage determines:
- Monthly condominium fees: Calculated proportionally based on your permilage
- Voting power: Each owner's vote in general assembly weighted by their permilage
- Share of expenses: Extraordinary costs distributed according to permilage
- Reserve fund contributions: Allocated proportionally to ownership percentage
Understanding your permilage is essential for budgeting ongoing apartment ownership costs.
Condominium Fees Structure
Typical Monthly Costs
Condominium fees (taxas de condomínio or quotas de condomínio) in Portugal vary widely based on building characteristics:
Basic apartment buildings without amenities: €30-€50 monthly
Mid-range buildings with elevator and common cleaning: €50-€100 monthly
Buildings with amenities (pool, gym, concierge, gardens): €100-€150+ monthly
Luxury developments: €200-€500+ monthly
Your specific fee depends on your permilage percentage of the total annual budget. A larger apartment pays proportionally more than a smaller unit in the same building.
What Your Fees Cover
Monthly condominium fees fund building operations and maintenance:
Regular maintenance: Cleaning common areas, elevator servicing, garden upkeep, lighting
Utilities: Water for common areas, electricity for hallways/elevators, heating in common spaces
Insurance: Building structure insurance (mandatory), civil liability insurance
Professional services: Building manager (administrador de condomínio), accounting, legal advice
Reserve fund: Mandatory allocation for future major repairs and replacements
Security: Concierge services, CCTV maintenance, access control systems (in buildings with these features)
Condominium fees do NOT typically cover utilities within your apartment (water, electricity, gas used in your unit) or your individual property taxes (IMI).
Mandatory Reserve Fund Requirements
Legal Obligation
Portuguese law requires every condominium to maintain a reserve fund (fundo de reserva) for extraordinary maintenance and repairs. This fund protects owners from unexpected large expenses by accumulating resources over time.
The Propriedade Horizontal regime mandates that a minimum percentage of the annual budget must be allocated to the reserve fund. While the exact percentage varies by building age and condition, standard practice allocates 10-15% of annual condominium fee income to reserves.
What Reserves Fund
The reserve fund covers major building expenses beyond routine maintenance:
- Roof replacement or major repairs
- Facade renovation or painting
- Elevator replacement or major overhaul
- Structural repairs (foundation work, load-bearing walls)
- Building system replacements (plumbing mains, electrical distribution)
- Emergency repairs (fire damage, flood damage, structural issues)
Routine maintenance and minor repairs continue to be funded through the regular annual budget, not reserves.
Assessing Reserve Fund Health
When purchasing an apartment, review the condominium's reserve fund balance. A healthy reserve fund indicates good building management and protects you from sudden large assessments.
Warning signs of inadequate reserves:
- Building deferred maintenance (visible repairs needed but not addressed)
- Reserve fund balance less than one year's total budget
- Recent history of special assessments for emergency repairs
- Aging building (30+ years) with small reserve fund
Ask your lawyer to request financial statements from the building administrator during due diligence.
General Assembly: Decision-Making Process
Structure and Frequency
The general assembly (assembleia geral de condóminos) is the governing body for all condominium matters. All owners have the right to participate, either personally or by appointing a proxy representative.
Ordinary assembly: Held at least once annually to approve budgets, review accounts, and elect the building administrator
Extraordinary assembly: Called as needed to address specific issues requiring owner decisions
Notice of assemblies must be provided to all owners with reasonable advance time (typically 8-15 days) including the agenda of matters to be decided.
Voting Rights and Requirements
Each owner's voting power equals their permilage percentage. Decisions require different approval thresholds depending on importance:
Simple majority (over 50% of votes present):
- Approving annual budgets
- Electing or removing the building administrator
- Authorizing routine repairs and maintenance
- Establishing building usage rules
Qualified majority (two-thirds of all owners):
- Amending building bylaws (regulamento de condomínio)
- Authorizing major renovations affecting common parts
- Changing permilage allocations
- Modifications to building structure or appearance
Unanimous consent:
- Converting building to different use
- Dissolving the condominium
- Certain fundamental changes to ownership structure
Owners who cannot attend may grant power of attorney to another person to vote on their behalf. This written authorization must be provided to the administrator before the assembly.
Administrator Responsibilities
The building administrator (administrador de condomínio) can be an individual owner or a professional management company. The administrator handles:
- Collecting monthly condominium fees
- Paying building expenses
- Contracting services (cleaning, elevator maintenance, repairs)
- Maintaining financial records and preparing annual accounts
- Enforcing building rules
- Convening and conducting general assemblies
Administrators serve for terms defined in building bylaws (typically 1-3 years) and can be replaced by general assembly vote if performance is unsatisfactory.
Owner Obligations and Responsibilities
Financial Obligations
As an apartment owner, you must:
Pay condominium fees on time: Late payments may incur interest and can lead to legal action for collection
Contribute to reserve fund: Cannot opt out of reserve fund contributions
Pay special assessments: If extraordinary expenses exceed reserve fund and require additional owner contributions
Maintain your unit: Keep your apartment in good condition to prevent damage to neighboring units or common parts
Unpaid condominium fees create a debt that attaches to the property itself, not just the owner. If you sell your apartment with outstanding condominium debt, the buyer may be liable for up to three years of unpaid fees.
Compliance with Building Rules
The building's bylaws (regulamento de condomínio) establish usage rules for both private units and common areas. Common restrictions include:
- Noise restrictions (quiet hours typically 10 PM to 8 AM)
- Pet policies (size restrictions, number limits, common area access)
- Renovation requirements (prior notification or approval for major works)
- Common area usage (storage in hallways prohibited, parking space assignments)
- Waste disposal procedures
Violations can result in warnings, fines, and ultimately legal action to compel compliance.
Maintenance of Your Unit
You're responsible for maintaining everything within your autonomous fraction. However, you must also ensure your unit maintenance doesn't cause problems for other owners:
- Fix water leaks promptly to prevent damage to units below
- Maintain proper ventilation to prevent mold affecting neighboring units
- Keep plumbing and electrical systems in good repair
- Report any issues that might affect common building systems
If damage to other units results from your failure to maintain your apartment properly, you're liable for repair costs.
Special Considerations for Apartment Buyers
Alojamento Local Authorization
If you plan to operate short-term rentals (Alojamento Local), you may need condominium authorization depending on building bylaws. Some condominiums prohibit or restrict short-term rental activity through bylaw provisions.
Even if bylaws don't explicitly address AL, operating a high-turnover rental in a residential building can create disputes with neighbors. Check building rules carefully before purchasing if AL operation is part of your investment strategy.
The general assembly can modify bylaws to prohibit or restrict AL operations with a qualified majority (two-thirds) vote, potentially affecting your rental plans even if allowed when you purchased.
Rental Property Considerations
If purchasing an apartment as a rental investment, understand that:
Condominium fees remain your responsibility: Unless your rental contract explicitly transfers this obligation to the tenant (uncommon in Portugal), you pay monthly fees even when the property is rented
Your tenant must follow building rules: As owner, you're responsible for your tenant's compliance with condominium bylaws. Tenant violations can result in penalties against you
You retain voting rights: Tenants cannot participate in general assemblies or vote on condominium matters; only owners have these rights
Due Diligence Before Purchase
Before purchasing an apartment in a Portuguese condominium, conduct thorough due diligence:
Request financial documents:
- Last two years of financial statements
- Current reserve fund balance
- List of any outstanding special assessments or pending major expenses
- History of condominium fee increases
Review building bylaws: Understand usage restrictions, renovation requirements, AL policies
Check for pending litigation: Some buildings have ongoing legal disputes between owners or with contractors
Inspect common areas: Physical condition of hallways, elevators, garage, roof indicates building maintenance quality
Talk to current owners: If possible, speak with existing owners about building management, neighbor relations, and any recurring problems
Your lawyer should obtain this information from the building administrator as part of the purchase process.
Dispute Resolution in Condominiums
Common Sources of Conflict
Condominium living inevitably creates disputes:
- Noise complaints between neighbors
- Disagreements over repair priorities or spending
- Conflicts over building rule enforcement
- Disputes about administrator performance
- Disagreements over special assessments
Resolution Process
Portuguese law provides several mechanisms for resolving condominium disputes:
Internal resolution: Raise issues at general assembly meetings for collective discussion and voting
Mediation: Voluntary mediation services can help owners reach agreements without litigation
Court action: Owners can file lawsuits in civil court to compel compliance with bylaws, recover unpaid fees, or challenge general assembly decisions
Arbitration: Some building bylaws include arbitration clauses for dispute resolution
Serious or recurring disputes can significantly affect your enjoyment of the property and may impact resale value. Research building harmony before purchasing when possible.
Regional and Building Type Variations
Urban vs Suburban Condominiums
Urban condominiums in Lisbon, Porto, and other cities typically have:
- Higher monthly fees (€80-€150+) due to elevators, security systems, professional management
- More formal administrative structures with professional management companies
- More comprehensive building insurance coverage
- Stricter usage rules for denser living
Suburban or smaller town condominiums often feature:
- Lower monthly fees (€30-€60) with more owner self-management
- Less formal administrative processes
- Owner volunteers serving as administrators rather than professional companies
- More relaxed usage rules
Historic Buildings vs New Developments
Older buildings (pre-1980s) may have:
- Lower permilage precision (older calculation methods)
- Deferred maintenance issues requiring larger reserve funds
- Less comprehensive building insurance
- Adaptation challenges for modern needs (elevator installation, accessibility)
New developments typically include:
- Modern building management systems and professional administration from start
- Comprehensive amenities (pools, gyms, parking) reflected in higher fees
- Clear permilage calculations and comprehensive bylaws
- Builder-provided initial years of maintenance through warranty period
Condominium Fees and Tax Deductibility
Unlike mortgage interest or property taxes, condominium fees are generally NOT tax-deductible in Portugal for owner-occupied residences or investment properties. They are considered personal living expenses or property operating costs rather than tax-deductible expenses.
However, if you use your apartment for business purposes (registered business location, professional office), a portion of condominium fees proportional to business use may be deductible as a business expense. Consult a Portuguese tax professional for guidance on your specific situation.
Key Questions to Ask Before Buying
Before committing to apartment purchase, obtain clear answers to:
- What are the current monthly condominium fees, and what's the history of increases?
- What is the current reserve fund balance, and what percentage of annual budget goes to reserves?
- Are there any pending special assessments or major repairs planned?
- What does my permilage percentage represent, and how was it calculated?
- Does the building allow Alojamento Local or long-term rentals?
- Who is the current administrator, and what are their responsibilities?
- When was the last building exterior maintenance performed?
- Are there any ongoing disputes or litigation involving the condominium?
- What are the building usage rules regarding noise, pets, renovations?
- Can I review the minutes of the last three general assembly meetings?
Your lawyer should obtain this information from the building administrator and verify details with the property registry.
Next Steps for Apartment Buyers
Understanding Propriedade Horizontal is essential before purchasing any apartment in Portugal. The framework protects owner rights while ensuring collective responsibility for building maintenance.
Before making an offer:
- Review building financial statements and reserve fund balance
- Read the condominium bylaws (regulamento de condomínio) thoroughly
- Calculate total monthly costs including condominium fees, property taxes, and utilities
- Assess building condition and maintenance quality
During the purchase process:
- Verify permilage calculation in property deed matches what seller represented
- Confirm no outstanding special assessments or unpaid condominium fees
- Obtain contact information for building administrator
After purchase:
- Pay condominium fees on time to avoid penalties and maintain good neighbor relations
- Attend general assembly meetings (at least annually) to participate in building governance
- Maintain your unit properly to prevent damage to neighboring apartments or common parts
- Review building financial statements annually to monitor reserve fund health
Portuguese condominium living offers excellent value when you understand the legal framework and choose buildings with competent administration and adequate reserve funds. By conducting proper due diligence, you'll avoid unpleasant surprises and enjoy your apartment ownership.
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