Portugal's Inherited Property Law Won't Fix the Court Crisis, Lawyers Warn

Portugal's Ministry of Justice has sent a controversial legislative proposal to the Assembleia da República that would allow a single heir to force the sale of inherited property after just 2 years of deadlock—a move that legal experts are calling a political stunt designed to deflect attention from the real problem: a broken court system.

Why This Matters

• Single heir veto power: One beneficiary (or an executor) can now trigger judicial sale of any urban or rural property stuck in inheritance disputes beyond 2 years, without unanimous consent.

• Housing market angle: The government frames this as an emergency measure to unlock up to 250,000 urban homes and 3.4 million rural plots trapped in estate gridlock, which it claims will ease Portugal's housing crisis.

• Legal pushback: Senior lawyers warn the measure is "for show" ("para inglês ver"), arguing the Cabinet should fix the glacial court system instead of interfering with private property rights.

• Timeline: Approved by the Council of Ministers in March 2026, the bill—titled "Special Process for the Sale of Real Estate Integrated in Undivided Inheritance"—now awaits parliamentary debate and presidential assent.

The Legislative Proposal: How It Would Work

The draft law would amend the Portuguese Civil Code to create a fast-track judicial process for liquidating contested estate assets. Under the scheme, any sole heir, surviving spouse (in community-property marriages), or testamentary executor with partition powers may petition a court to sell a property if the estate remains undivided 2 years after the death of the owner—or at any time once a formal inventory proceeding (processo de inventário) is already underway.

The process unfolds in two phases. First, a declaratory stage in which the court verifies standing, examines the inheritance structure, and sets a floor price based on expert appraisals designed to reflect fair market value. If heirs fail to agree or arrange a private sale, the second phase proceeds: an electronic auction overseen by the court. To prevent forced below-market sales, any co-heir retains a right of redemption (direito de remição), permitting them to buy out the property at the final sale price and keep it within the family.

The government markets the measure as part of "Construir Portugal" (Build Portugal), a wider legislative package targeting the country's housing shortage. Officials estimate that hundreds of thousands of habitable homes and millions of rustic parcels sit idle, locked in family disputes or lost in procedural limbo. By monetizing these frozen assets, the Cabinet hopes to inject fresh inventory into a starved real estate market where prices have risen far faster than the EU average, pricing out young professionals and squeezing rental affordability across metropolitan Lisbon and Porto.

Certain properties remain exempt: the family's permanent residence, any asset already subject to court seizure, and estates declared insolvent. The proposal also introduces arbitration for inheritance disputes and creates a new role—the testamentary liquidator—empowered to administer, settle, and partition estates without unanimous heir consent.

What This Means for Heirs and Property Owners

For families navigating estate disputes, the reform is double-edged. Sandra Passinhas, a family-law professor, acknowledges the bill will "allow a single heir to unlock a single asset" while leaving the rest of the estate in shared ownership or proceeding to formal inventory. She points out that in cases where one valuable urban property becomes the sticking point—perhaps because a child hopes eventually to buy out siblings—current law allows a single dissenting heir to freeze the entire process indefinitely.

The redemption clause offers a safety valve: if an electronic auction concludes, the holdout heir can step in and purchase the property at the hammer price, which may even be below market if initial attempts to sell failed. Passinhas describes this as "an instrument of last resort" that strikes a fair balance when beneficiaries number in the dozens and unanimous consent becomes impractical.

Yet she flags a structural concern. Allowing forced sales after only 2 years "appears to be very short," potentially encouraging premature liquidation before heirs have exhausted good-faith negotiation. The monetization of illiquid assets—transforming brick-and-mortar into cash—may streamline division but also hollows out the traditional partition process and risks undervaluing culturally or sentimentally significant properties.

For Portuguese residents, the practical takeaway is stark: if you inherit jointly and cannot reach agreement within 24 months, expect any co-heir to trigger a forced judicial sale. Those with elderly parents or pending estate plans should consider updated wills, clearer testamentary instructions, or even pre-mortem gifting to sidestep forced sales.

Immediate Actions for Residents

If you are currently in an inheritance dispute, here is what you need to know:

• When the 2-year clock starts: The trigger begins from the date of death, meaning properties from deaths occurring after 2024 could become eligible for forced sale once this law passes and enters into effect. However, an heir can petition for judicial sale at any point once a formal inventory proceeding has already begun, regardless of the 2-year timeline.

• Court fees versus notarial costs: Judicial inventory proceedings typically cost significantly less than notarial alternatives, but court fees remain a barrier for many families. Legal experts note that approximately 90% of heirs lack the financial capacity to pursue court actions due to these fees. The government is considering fee waivers for inventory proceedings as part of this reform.

• Redemption right timeline: If a property is sold at auction, co-heirs retain the right to purchase it at the final sale price. The redemption right must typically be exercised within the timeframe specified by the court order—generally within 10 to 30 days of the auction, though this should be clarified once the final law is published.

• Alternative dispute resolution: Rather than waiting for forced sale procedures, consider engaging a mediator or arbitrator before the 2-year mark approaches. Many inheritance disputes can be resolved through negotiated settlement, which preserves family relationships and often yields fairer outcomes than forced liquidation.

Legal Backlash: "A Bluff to Distract from Court Delays"

Eduarda Proença de Carvalho—a veteran litigator with over 30 years' experience and vice-president of the General Council of the Portuguese Bar Association—dismissed the Cabinet's initiative as political theater. "This is a bluff," she told journalists. "The heirs, as property owners, still have the legitimacy to decide which path they want to follow. The State needs to understand that justice happens primarily in the courts, and that is where it must be fast."

Carvalho's firm has handled some of Portugal's most notorious probate battles, including the decades-long fight over the estate of industrialist Tomé Feteira, contested since 2000 between his daughter Olímpia and former secretary Rosalina Ribeiro. Both women died before the case concluded. She argues that inventory proceedings—even uncontested ones—routinely drag on for 30 years because they are "the most forgotten cases in Portugal."

The root cause, she insists, is systemic judicial dysfunction. When probate jurisdiction was partially transferred to notaries, the cost differential became prohibitive: notarial inventories cost ten times more than judicial ones, driving almost all families back to the courts. Those courts, in turn, operate under crushing backlogs and chronic staffing shortages. "A property-division case in a divorce never takes less than 4 to 5 years," Carvalho explains, adding that statutory deadlines are routinely ignored by both judges and prosecutors.

She contends that 98% of inheritance cases involve parties who want to settle and are entitled to timely judicial resolution when they disagree on asset valuations. "Don't come and tell me there is no housing because it's the heirs' fault and because of undivided estates," she said. Nor are heirs uniformly wealthy: she estimates 90% lack the financial capacity to file court actions due to court fees. Her proposed remedy is straightforward: "Exempt inventory proceedings from court costs."

Carvalho also challenges the premise that private property should be conscripted to solve a public-policy crisis. "Governments do not need to interfere with private property, even when we're talking about housing. They can, yes, impose rules. The State can order reconstruction when a building is collapsing, and if that order is not obeyed, it can seize the asset through expropriation," she said, invoking existing constitutional mechanisms for public health and safety. She concluded bluntly: "We are wasting time. Instead of providing resources and forcing the courts to comply…"

The Housing Crisis Context: 380,000 Homes, Millions of Plots

Portugal's residential market has become one of Europe's most unaffordable. Average purchase and rental prices have surged faster than wages, pushing home-ownership out of reach for millennials and forcing families to allocate unsustainable shares of income to rent, especially in Lisbon, Porto, and the Algarve.

Government data cited in the legislative dossier indicate that approximately 250,000 urban dwellings in good condition and 130,000 requiring rehabilitation remain off the market, alongside 3.4 million rustic parcels, all frozen in estate disputes or administrative neglect. The Cabinet argues that even a modest release of this inventory could dampen price inflation and expand rental supply.

Critics counter that the real bottleneck is not recalcitrant heirs but an under-resourced judiciary unable to process even straightforward estate partitions in less than half a decade. Without parallel investment in judges, court clerks, and digital case-management infrastructure, they warn, the new forced-sale mechanism will simply pile more urgent filings onto an already collapsing system, producing neither housing relief nor timely justice.

What Happens Next

The authorization bill now enters committee review in the Assembleia. If passed, it must secure promulgation by the President of the Republic and official publication in the Diário da República before taking effect. Parliamentary debate is expected to hinge on the 2-year trigger, the adequacy of redemption protections, and whether fiscal incentives—such as waiving court fees for inventory filings—should accompany any forced-sale regime.

For residents navigating inheritance today, the message is clear: estate planning has become urgent. Clear testamentary language, advance agreements among heirs, and early engagement with notarial or arbitration services may prove the only reliable defense against either protracted litigation or forced liquidation under the new rules. And if you are counting on Portuguese courts to resolve a family property dispute swiftly, the data—and the lawyers—suggest you prepare for a very long wait.