Housing reform: undivided inheritances

1. The issue

In Portugal, thousands of properties are “locked up” in undivided inheritances.

Disputes between heirs, lack of agreement, and the costs associated with division mean that many homes remain off the market for years, that is, they are neither sold, rented, nor rehabilitated.

2. Impact on housing

When an undivided inheritance becomes blocked:
• The supply of homes available for sale and rent decreases;
• The deterioration of vacant properties worsens;
• Pressure on prices increases in an already scarce market.

3. What the Government announces

In the Council of Ministers communiqué of 27 March 2026, the creation of a new fast-track mechanism for resolving undivided inheritances is announced, as part of the housing reform, alongside:

• Tax incentives for housing supply;
• Revision of the Legal Regime for Urbanisation and Building;
• Measures for the better use of rural property.
The objective: to bring more properties onto the market.

4. What is at stake

This new mechanism should make it possible to:
• Reduce deadlock between heirs;
• Accelerate decisions on sale, lease, or rehabilitation;
• Prevent legal disagreements from keeping “frozen” assets idle indefinitely.

5. Challenges and opportunities

If effective, this instrument could release a significant volume of properties and create opportunities for investment, rehabilitation, and leasing.

For legal practitioners, it will also be a new field of intervention at the intersection of succession law and housing policy.

The key will lie in balancing speed with the heirs’ safeguards, and in how these legislative measures are implemented in practice.