Modular construction or prefabricated houses in Portugal: Legal framework and permit requirements

Despite the simple and inexpensive construction of such structures, the question often arises as to whether prior approval is required for this type of construction. Recent legislation has now clarified this issue.

What are modular or prefabricated buildings?

Modular structures are permanent buildings consisting entirely or partially of industrially prefabricated components. These components – whether load-bearing or non-load-bearing – are designed to be connected either before transport or directly at the construction site.

The key feature of this construction method is modularity: standardised components enable rapid assembly, better quality control and a reduction in material waste. Although such buildings may be transportable or demountable, they can offer the same durability and functionality as conventional structures.

Important legislative changes

On 8 January 2024, Government Law No. 10/2024 was published, simplifying various administrative procedures in the field of urban planning and spatial planning. This law added Article 1.º-A to Government Law No. 555/99 of 16 December (Legal Framework for Urbanisation and Development). This explicitly clarifies that the scope of application also includes modular or prefabricated structures of a permanent nature, characterised by the use of ‘modular, load-bearing or non-load-bearing construction elements or systems, wholly or partly industrially prefabricated, connected together before or at the site, regardless of their transportability or dismantlability’.

Equal treatment with conventional buildings

This change makes it clear that prefabricated or modular buildings – often made of wood – are treated in the same way as conventional structures when it comes to planning permission. This means that even if they appear to be mobile, these structures are subject to planning permission or prior notification to the local authority, depending on the case, provided they are permanently attached to the ground.

Exceptions to the permit requirement

As with conventional buildings, there are exceptions here too. For example, a modular or prefabricated building may be exempt from the permit requirement if it complies with the applicable regulations. This applies, for example, to an outbuilding – such as a garage – that is adjacent to or separate from the main building, does not exceed a height of 2.20 m or the height of the ground floor of the main building, has a maximum area of 10 m² and does not border a public road.

Tax implications

Finally, it should be noted that modular or prefabricated structures that are permanently attached to the ground (i.e. remain in the same location for more than one year) are also subject to property tax (IMI) in accordance with the Portuguese IMI Code.

Marlene Sennewald Sippel / Carolina Costa