Portugal Strengthens Property Rights: What Foreign Investors Must Know About Law 67/2025

Portugal has approved Law 67/2025, introducing major changes to how the country handles illegal property occupation. This reform significantly strengthens property rights, increases criminal penalties and implements a fast-track eviction mechanism, offering greater protection to foreign investors and property owners.

This article explains what has changed, why it matters and how the new rules improve legal certainty for anyone investing in Portuguese real estate.

1. Background: How Illegal Occupation Was Treated Before

Before this reform, illegal occupation (“usurpation of immovable property”) was punishable with up to two years’ imprisonment or a fine. However:

• penalties were low, even in serious cases;
• organised or profit-driven occupation was not specifically addressed;
• property owners faced long court processes to regain possession;
• vacant assets were exposed to higher risk;
• investors lacked practical, rapid remedies.

This reality affected confidence in the Portuguese real estate market, especially among foreign buyers and institutional investors.

2. What Law 67/2025 Changes

(a) Stronger Criminal Penalties

The reform creates new aggravated forms of illegal occupation:

• up to 3 years when violence or threats are used;
• 1 to 4 years when the occupation is profit-oriented or professionally organised.

This targets more complex or repeated behaviours.

(b) Fast-Track Judicial Reinstatement of Possession

The most impactful innovation for investors. Courts may now order immediate reinstatement when:

• the owner proves their right;
• there is clear evidence of illegal occupation.

This dramatically reduces vacancy risk, legal exposure and asset-management uncertainty.

(c) Special Rules for Public Property

When a State-owned property is occupied, the law requires:

• evaluation of occupants’ socio-economic vulnerabilities;
• referral for social support when needed.

This balances protection of public assets with social responsibility.

3. Why This Matters for Investors

Law 67/2025 increases security across the real estate market:

• Faster dispute resolution — reduced waiting times for court decisions
• Stronger enforcement of ownership — clearer legal remedies available
• Greater predictability during transactions — improved due diligence outcomes
• Lower operational and litigation costs — streamlined legal processes
• Reduced risk for vacant properties — deterrent effect of higher penalties
• Improved environment for foreign capital — enhanced market confidence

Conclusion

Law 67/2025 modernises Portugal’s approach to illegal occupation, strengthening protection for property owners while reinforcing market stability. For international investors, this legislation provides a safer and more predictable legal framework, reducing risks and increasing confidence in long-term acquisitions.

If you need tailored legal advice on protecting assets, conducting due diligence or navigating Portugal’s property laws, I am available to assist. Contact Diana Gondim for expert guidance on your Portuguese real estate investment.