Buying a share of a property (quota-parte) at auction in Portugal

What a share is

Co-ownership (compropriedade) exists when two or more people own the same property at the same time (Civil Code article 1403). Each holds a share (quota-parte): a fraction of the right, such as 1/2, 1/3 or 1/8.

The share is a part of the right, not a part of the space. Someone with 1/2 of a house does not own the kitchen and one bedroom. They own half of everything, jointly with the other co-owner. The law calls this an undivided (indiviso) asset.

The law also says that co-owners' rights are equal in kind, though they may differ in size, and that shares are presumed equal unless the title says otherwise.

Why shares come up at auction

It happens when only one of the owners has debts. Common examples: a property owned by two siblings, by a divorced couple who never split their assets, or by several heirs who became joint owners after an estate was settled.

In enforcement brought against only one co-owner, neither the whole property nor a specific part of it can be seized (CPC article 743(1)). What is seized is the right of the debtor (executado), that is, the share. And the share is what goes on sale.

The whole property may be sold in two situations:

• when all co-owners declare that they want the whole to be sold (CPC article 781(2) and (4));
• when all shares have been seized in different cases: a single sale is held and the money is divided (article 743(2)).

What you actually buy

After a court sale, the buyer is put in possession "of their share" (CPC article 861(4)). If another co-owner lives in the house, this does not give you the keys or the right to make them leave.

The other owners have pre-emption

A co-owner has a pre-emption right (direito de preferência), ranking first among legal pre-emption holders, when another co-owner's share is sold to an outsider (Civil Code article 1409). Pre-emption means taking the share at the price of the best bid.

How it works in sales within proceedings:

• Civil enforcement. Pre-emption holders are notified of the day, time and place where bids are opened, so they can exercise the right there and then. If there are several, they bid against each other (CPC articles 819 and 823). These rules also apply to electronic auctions (article 811(2)).
• e-Leilões. Pre-emption holders exercise the right directly in the enforcement case, not on the platform (rules, article 13). The listing should mention pre-emption holders known in the case (article 6).
• Tax authority sale. Pre-emption holders are notified so they can exercise the right when the property is awarded (CPPT article 249(7)).

The practical effect: the highest bid is not enough. If a co-owner pre-empts, the share goes to them and the bidder does not buy.

If a co-owner is not told about the sale, the law gives them six months, from the time they learn the essential terms, to claim the share in court (Civil Code article 1410; CPC article 819(4)).

How co-ownership ends

Nobody is forced to remain a co-owner. Any co-owner may demand division, unless it was agreed to keep the asset undivided, which is only possible for periods of up to five years, renewable (Civil Code article 1412).

Division happens in one of two ways (article 1413):

• By agreement. The owners settle on a solution: one buys out the other, they sell everything to a third party and split the money, or they physically divide the property when that is possible.
• In court, "under procedural law", when there is no agreement.

A house or flat usually cannot be cut in two. In those cases the way out is either one owner keeping everything and paying the others, or the sale of the whole property. The outcome and length of court proceedings depend on each case; no time frame can be promised.

Risks to weigh

• Use. If another co-owner occupies the property, the buyer may go a long time without using it or earning income from it.
• Resale. There are few buyers for shares. The most likely ones are the other co-owners.
• Financing. Check with the bank, before bidding, whether it will finance the purchase of a share. See Mortgages for auction properties.
• Expenses. Property tax (IMI), condominium fees and works are split among the owners. Ask whether there are debts.
• Time and cost of a court division. Lawyer, court fees and possibly a new sale.
• Other rights. A share may carry a usufruct (usufruto) or a lease (arrendamento). See Liens and charges in a judicial sale.

Taxes when buying a share

Property transfer tax (IMT) has two specific rules for shares:

• Taxable value. When a co-owner disposes of their right, the tax is charged on the part of the taxable property value (valor patrimonial tributário, VPT) corresponding to the share, or on the value in the deed, whichever is higher (IMT Code, article 12(4), rule 1). For judicial and administrative sales, the same article says the value is the price (rule 16).
• Rate. When less than the whole property is transferred, the rate applied to the taxable value is the one that corresponds to the overall value of the property, taking into account the part transferred (article 17(6)(b)). In other words, buying 1/2 does not lower the rate to the bracket for half the value.

Stamp duty (Imposto do Selo) is 0.8% of the value. The auction cost calculator and the guide Costs of buying at auction help with the sums.

What to check before bidding

Frequently asked questions

Can I buy the share jointly with someone else?

The law expressly provides for it in one case. In a sealed-bid sale (carta fechada), if two bidders offer the same highest price, they may declare that they wish to acquire in co-ownership instead of bidding against each other (CPC article 820(2); CPPT article 253(b)).

Can the co-owners stop the sale?

They cannot stop the sale of the seized share. They can pre-empt, or declare that they want the whole property sold.

Where can I find shares for sale?

In the Leiloeiro search, the listing shows when the sale notice states that what is for sale is a share and not full ownership.