Here's Why There Are So Many Abandoned Properties in Portugal
If you've wandered around Lisbon and thought to yourself, "Why are there so many properties abandoned here? Surely someone would want to buy these apartments, houses, and homes?" - you wouldn't be the first to ask this question.
You might even have thought, "I would totally buy a property that's abandoned - renovate it just the way I want - and live in it. The location is great, it's definitely spacious enough, I would love to have that property!"
It's not just Lisbon that has a lot of residential and commercial properties vacant, left abandoned, and at times completely derelict. These types of properties exist all around Portugal - and yes there are a plethora of them.
And yes, some of them are stunning, in great locations, and would make incredible homes and commercial properties, if only they were renovated.
The reason has nothing to do with the price of the property - many abandoned properties exist in very expensive areas of Portugal. Ones that would cost a great deal to purchase.
That being said - the more you understand why these properties are abandoned in the first place - the more you realize - trying to buy a property that is abandoned in Portugal is nowhere near straight forward, and in most cases, not worth the headache.
I'll get into why that is now, starting with why there are so many abandoned properties in the first place.
The Reason There Are So Many Abandoned Properties in Portugal: Inheritance Law
The reason why these properties are abandoned - and will likely continue to be for many, many years, comes down to something most would never guess: the way inheritance laws works in Portugal.
You see, when a Portuguese citizen dies, under Portuguese law, they are required by law to leave a fraction of their owned assets to each of their descendants.
Unlike in many other countries - where you can have it in your will that, for example, your son will inherit one property and your daughter will inherit for instance, money or other assets - in Portugal, the totality of the estate has to be divided with a reserved percentage inherited by each sibling.
And you cannot cut a descendant out of your will. So every single child you have will have a percent ownership of any assets (like properties) you leave behind.
This makes sense on one level. Making sure no sibling can be disowned by their parents and everyone has a fair share of what is inherited by default sounds great on paper.
The problem that results, however, is that there are a lot of abandoned properties in Portugal due to the way this inheritance system works.
Imagine you have two children and the property is inherited by the two of them, each getting 50% of the property. The two siblings have to agree on the price they want for the property, agree to sell for that price, and all is well with the world.
But if they don't agree - and yes, all individuals who have ownership in a property have to agree - the house is not sold.
Now imagine that you have 4 siblings instead of 2 inheriting a property after their parents pass away. It makes agreeing to sell and for how much a lot more complicated, and the property may not be sold.
Now imagine that each of those 4 siblings has 2 children of their own, and that property has not sold when they pass. Now you have 8 people who all have ownership of the property, all who have to agree to sell and about the sale price.
If no agreement can be met, again their percentage of the property is split amongst their descendants, and this keeps going on indefinitely.
Why Buying Abandoned Properties in Portugal Is Not Often Worth the Headache
You can likely already see why the pursuit of trying to buy an abandoned property in Portugal is likely not worth the headache already, but I'll spell it out nonetheless...
Tracking down all the individuals who each own a (sometimes very small) percentage of a property is ridiculously difficult - especially when those properties are owned by large numbers of people - sometimes dozens upon dozens.
Actually, sometimes hundreds. I've heard of some properties that had over 200 people being fractional owners of a single residence.
And no, you can't just look them all up in one place and get an easy list of all those hundreds of people in one go. Yes, the information is publicly accessible, but it's a massive process to find out, as some of the information is kept with local notaries and registries, and you have to do the right search at the right notary or registry to get the information you need.
Then and only then can you can begin to find out how to contact those people and begin the process of contacting each individually. Some of which no doubt have emigrated away from Portugal and are not easy to get a hold of.
That's just tracking those people down - then you have to negotiate a sale price for that property and get all of those people to sell and for how much.
Nearly an impossible feat in some cases - where it's either:
- Practically impossible to track everyone down because one or even many of the people who own the property have moved.
- Practically impossible to get all those people to agree on a sale price for the property.
All that work, all that headache, and still the abandoned/derelict property has to be renovated at the end of the day - which might end up costing more than making a property completely by scratch. So in most cases, it's nowhere near worth the amount of time, work, cost, and headache it would take to purchase and restore one of these abandoned properties.
Can it be done? Yes, absolutely. And it of course has been done before.
Is it easy? No way, and I don't envy the headache the real estate agent and potential buyer have to go through to get that kind of work done. Plus the patience, as you can imagine, this type of purchase would take aeons to complete.
The Future of Abandoned Properties in Portugal
As you can probably guess, the issue of so many abandoned properties in Portugal is not likely to resolve itself due to the way the inheritance system works.
Some of these abandoned properties will be bought and fixed up, but other properties will become abandoned over time as well as the inheritance continues to be divided amongst inheritors of an estate.
The laws may well change one day, allowing some way to make it easier to buy properties like this, but in my opinion that's quite unlikely to happen. Until then, the issue of abandoned properties across Portugal will continue, generation after generation.
And in the meantime, if you're looking for real estate to buy in Portugal, you're probably going to avoid trying to snap one of these types of places up.
