Selling a Rented Property in Portugal: Lease, Tenant’s Pre-emption Right and Value

You can sell a let property without waiting for the tenant to leave. The sale does not end the tenancy agreement: the buyer becomes the new landlord, on the same terms. Even so, the agreement in place and the tenant's rights change the way you sell and, quite often, the price.

Under certain conditions set out in law, the tenant has a right of first refusal (direito de preferência). In that case, the tenant must be told about the sale before the escritura (the public deed of sale) and can buy the property on the same terms as the buyer you have found. The tenancy also shapes who is interested. A property with a tenant in place mainly draws investors, who look at the rent, while a vacant property also appeals to people who want to live in it.

Before you decide whether to sell with the tenant in place or wait until the property is vacant, it helps to know its market value and how the tenancy is likely to affect that value. Value your let property for free

Selling a tenanted property in Portugal: what changes with a tenant in place

The lease passes to the buyer

Selling does not end the tenancy agreement. The buyer steps into the landlord's shoes on the same terms: the same rent, the same duration, the same clauses. The tenant goes on living in the property just as before.

In practice, the buyer receives a copy of the lease and learns from what date the rent becomes theirs. After the escritura (the public deed of sale), the tenant should be told who the new landlord is and where to pay from then on. That way, no payment goes astray while ownership changes hands.

When the tenant has a right of first refusal

Under certain conditions set out in law, the tenant has a right of first refusal, known in Portugal as direito de preferência. They must be informed of the sale and may buy the property on the same terms as the buyer you have found, meaning the same price and the same payment arrangements. The rules are in the urban tenancy regime, published in the Diário da República.

This has two consequences for you as the seller. The price you give the tenant must be the real price of the deal, with the terms actually agreed. And the buyer should know from the start that the tenant may end up taking the property. How to make this notification is covered in the next section.

Occupied or vacant: two different sets of buyers

A tenanted property mainly appeals to investors. They work out the rent, the running costs and how long the lease still has to run. A vacant property also appeals to people who want to live in it, which widens the pool of buyers.

So the same property can fetch a different price in each case. A two-bedroom flat (a T2) with a recent lease and a rent close to market level finds investors fairly easily. The same T2 with an old lease and a low rent interests fewer people, and they factor that into their offer.

The paperwork a buyer will ask for

A serious investor wants to understand what they are buying before making an offer. Get these ready in advance:

• The signed tenancy agreement and any addenda.
• Proof that the lease was registered with the tax authority (Finanças).
• The most recent electronic rent receipts.
• Details of the deposit paid at the start of the tenancy, if there was one.
• Any letters or messages already exchanged about the rent or renewal.

Having these documents to hand saves questions and delays halfway through the sale. For the rest of the sale paperwork, see the guide to the documents you need to sell a property in Portugal.

Know the value before you decide

Before choosing between selling now and waiting until the property is vacant, find out what it is worth on the local market without a tenant. That figure is the baseline for measuring the effect of the tenancy. Without it, you will struggle to judge whether an investor's offer is reasonable.

It also helps to compare selling with keeping the property let. The sell or rent tool sets the two options side by side. The guide how much is my property worth explains what makes up the value of a property in Portugal.

Selling a tenanted property in Portugal: the tenant's right of first refusal and the weight of the lease

When the tenant can buy first

Under certain conditions, Portuguese law gives the tenant the right to buy the property before anyone else. The tenant buys at the same price and on the same terms. This is the legal right of first refusal (direito legal de preferência), set out in the Civil Code under the urban tenancy rules.

This right does not apply in every case. It depends on several factors, including how long the tenancy has lasted and the type of sale. The Diário da República explains what a legal right of first refusal is. If you are unsure about your own situation, check it with a lawyer or a solicitador (a legal professional who handles property transactions) before you advertise.

Your property may be part of a building that is not divided into separately registered units (propriedade horizontal). In that case, Law no. 64/2018 sets specific rules for the tenant. A situation like this always needs a legal professional to look at it.

How the sale is notified to the tenant

When the tenant has a right of first refusal, the landlord must tell them about the planned sale and its main terms. In practice, this happens once there is a buyer and the terms are agreed, before the escritura (the public deed of sale). The notice should state at least:

• the price agreed with the buyer;
• how payment will be made, including any deposit paid under the CPCV (the promissory contract of sale);
• the expected date and place of the escritura;
• any other terms the buyer has accepted.

The tenant then has a legal period in which to reply. If they accept, they buy the property themselves, on the same terms. If they decline or do not reply in time, the sale to your buyer can go ahead. Keep proof of the notice, as it is often asked for on the day of the escritura.

If the terms change later, for example a lower price or a different way of paying, the tenant must be told again. If this step is skipped, the sale can be challenged. The tenant can ask a court to take the buyer's place and acquire the property.

How the lease affects the value

The buyer takes on the lease exactly as it stands. That is why they look closely at the rent, the length of the contract and the time left to run. An older lease, with a low rent or special protection rules, weighs more on the value than a recent one.

Picture two identical flats in the same building in Almada. One has a recent lease with a rent close to the market level. The other has an older lease with stronger protection for the tenant. An investor works out the figures differently for each, and the offer they make reflects that difference.

Papers to gather before you advertise

• the tenancy agreement and any addenda;
• proof that the lease was registered with the tax authority (Finanças);
• the most recent rent receipts;
• any letters exchanged with the tenant about rent updates.

The list of documents for selling helps you cover the rest of the process. With the lease to hand, the free estimate or a market study starts from solid ground. Read the lease carefully and, if anything is unclear, ask a lawyer or a solicitador for help.

Selling a tenanted property in Portugal: the steps from tenancy agreement to escritura

The order of the steps matters more when you sell with a tenant in place than when the property is vacant. The price, the tenant's right of first refusal and the date of the escritura (the deed of sale signed before a notary or other authorised official) all depend on each other. Take a step out of order and you may have to go back.

Before you put the property on the market

1. Gather the tenancy agreement and check the rent, the term, the renewals and the conditions. Add any addenda, rent reviews and the receipt for the deposit.
2. Gather the usual sale documents: the caderneta predial (the property's tax record at the tax office), the certidão permanente (the land registry certificate), the energy certificate and the licença de utilização (the occupancy licence). The full list is in the documents needed to sell.
3. Find out the market value of the property and the likely effect of the tenancy. A free estimate gives you a first reference. Say from the outset that the property is let, and whether the agreement is recent or long-standing.
4. Decide whether to sell with the tenant in place or wait until the property is vacant, at the end of the agreement and under the terms it sets out. Compare both scenarios using the same figures: the likely price, the selling costs and the waiting time.

To work out the full picture, see how much it costs to sell a property and what you keep at the end with the what's left after the sale tool. A price gap between a tenanted and a vacant property can only be judged with these figures alongside it.

While the property is on sale

1. Arrange viewings with the tenant, giving notice and choosing times that suit them. The property is their home, so agreeing a schedule at the start avoids misunderstandings.
2. Advertise the property as let, with the rent and the status of the agreement clearly explained. An investor buyer does the sums from these details. A clear listing saves viewings that go nowhere.
3. Negotiate the price, the payment terms and the expected date of the escritura with the buyer. These terms form the basis of what you tell the tenant.
4. Where the tenant has a right of first refusal, notify them of the planned sale and its main terms before the escritura. Keep proof of the notice and of their reply. The rules are in the urban tenancy regime published in the Diário da República.

If the tenant decides to buy, the sale goes ahead with them, on the same terms the other buyer accepted. So tell anyone who makes an offer, right from the start, that the property has a tenant who may have a right of first refusal. This condition should be written into the CPCV (contrato-promessa de compra e venda, the promissory contract of sale).

At the escritura and afterwards

1. Sign the escritura: the buyer takes over the tenancy agreement, with the same rent and the same conditions.
2. Agree with the buyer what happens to the deposit and to the rent for the month of the escritura. Put the agreement in writing so there is no doubt later.
3. Tell the tenant about the change of landlord and the new details for paying the rent. Give the buyer a copy of the agreement and the payment history.

The usual timescales for a sale, from listing to escritura, are in the guide on how long it takes to sell a property. For a tenanted property, add the time needed to notify the tenant.

Which documents to prepare when selling with a tenant in place

A tenanted property needs the same documents as any other sale. It also needs the papers that show where the tenancy stands. Gather everything before you advertise. You can then answer buyers' questions straight away, and the CPCV (promissory contract of sale) won't stall while someone waits for a missing paper.

The documents every sale needs

• Caderneta predial (the property's record at the tax office): it shows the matrix article number, the area and the taxable property value. You can get it from the Portal das Finanças.
• Certidão permanente (the property's land registry certificate): it shows the owner and any mortgages or other charges. You can request it online at Predial Online.
• Licença de utilização (the town council's permit to use the property as a home): check that it matches how the property is used today.
• Certificado energético (energy performance certificate): it is issued through the system run by ADENE and must exist before the property is advertised.

The energy certificate is prepared by a qualified assessor, who needs to get inside the property. If your certificate is no longer valid, this will be the first visit to arrange with your tenant. The full list, with what to do in each case, is in our documents for selling checklist.

The tenancy agreement and proof it was registered with the tax office

Keep the signed tenancy agreement to hand, with every addendum. The buyer will take over this agreement and will want to read it before signing the CPCV. The notary or solicitador handling the escritura (the final deed of sale) may also ask for it.

The landlord must register the tenancy agreement with the tax office. Proof of this is available on the Portal das Finanças, in the rental section. Print it and keep it with the agreement. If the agreement was never registered, or has changed since, speak to a solicitador and put things in order before the property goes on the market.

If you issue electronic rent receipts, keep the full history. It is the simplest way to show that the rent is paid and how much it is.

A tenancy summary for the buyer

An investor is mainly buying an income. A single page with the right facts saves them work and builds trust. Include:

• the current rent and the day it is paid;
• the start date of the agreement and how it renews;
• any rent increases already applied;
• the payment record, with receipts as proof;
• the deposit, if there is one, and what happens to it on sale;
• who pays for what: condominium fees, minor repairs, insurance;
• the furniture and appliances included in the tenancy.

This summary is for buyers who are already negotiating, not for the listing. Never publish the tenant's name, contact details or other personal data. In the listing, one factual line is enough, for example: "Two-bedroom flat, let on a current agreement, rent paid on time".

Arranging viewings and the valuation with your tenant

The property is your tenant's home for as long as the agreement runs. Every viewing steps into someone else's daily life. A good relationship at this stage also matters to the buyer, who will inherit it.

1. Talk to your tenant before you advertise, ideally in person, and explain what will happen.
2. Suggest set days and times for viewings that suit them.
3. Give notice of each viewing well ahead and confirm the day before.
4. Where possible, group the energy assessor, the photographs and the valuation on the same day.
5. Be there yourself, or ask the estate agent to attend, so nobody enters the property alone.
6. Keep the first viewings for the most serious buyers, after a phone conversation.

Frequently asked questions about selling a tenanted property in Portugal