Permilagem: how a Portuguese condominium fee is really split

One sentence of the Civil Code decides everything else

The question that brings people to this topic is nearly always the same: why do I pay more in condominium fees than my neighbour, when the flats are similar? The answer sits in a single sentence, in article 1424(1) of the Portuguese Civil Code as amended by Law 8/2022: expenses necessary for the conservation and use of the common parts, and those relating to the payment of services of common interest, are paid by the owners in proportion to the value of their fractions¹.

Notice what the law picked as its criterion, and what it did not. Not the floor area of the flat. Not the number of people living in it. Not consumption of anything. It is the relative value of the fraction, and that value has a name and a place of its own.

Permilagem is read, not calculated

Article 1418(1) requires the deed of horizontal property to fix the relative value of each fraction, expressed as a percentage or in thousandths of the total value of the building². That figure, and only that figure, is what the condominium uses. And because it is a figure fixed in a document, permilagem is not a sum an owner performs: it is a fact an owner looks up.

That has a practical consequence which catches many people out. Two fractions with the same layout and the same area can carry different permilagens, because what the deed fixes is relative value and not surface. A top floor with a view, a terrace for exclusive use or an included parking space weigh more than a first-floor inward-facing flat with the same plan. Anyone trying to deduce their permilagem by dividing their square metres by the building’s square metres will reach a plausible number that is wrong.

Where to look, easiest first:

• the fraction’s urban property tax register entry, on the Portuguese tax portal;
• the deed of horizontal property, usually attached to the purchase deed;
• the condominium administrator, who necessarily holds the full list, because that is what the fees are issued from.

A simple check closes the matter: added together, the permilagens of all the fractions in the building come to 1000. If you add up your building’s and do not get there, the problem is in the deed and not in your arithmetic. Article 1418(3) goes as far as making the absence of this specification a ground for the deed to be void.

From budget to fee: the sum, step by step

The owners’ assembly approves an annual budget. Each fraction’s fee is that budget multiplied by its permilagem, plus two corrections the law imposes.

Take a building with 24,000 EUR of general expenses a year, plus 3600 EUR for the lift alone, and a fraction of 45 thousandths:

The two middle lines deserve explaining, because they are the ones the law treats differently from the rest.

The lift: the word that settles the arguments

Article 1424(4) is short and carefully worded: only owners whose fractions can be served by the lift take part in lift expenses¹.

The test is possibility, not use. Someone on the first floor who always takes the stairs still pays, because their fraction can be served by the lift; no resident can ask to be excused for not using it. A shop with its own street entrance that the lift does not reach is outside, and that is not a matter of agreement between neighbours: it is what the law provides.

Article 1424(3) generalises the idea to any common part: expenses on common parts serving only some of the owners fall on those who use them.

What happens to the sum when part of the building falls outside

Here is the consequence that is almost never explained. The lift bill does not shrink because some fractions do not take part: it is simply shared among those that do.

If the ground-floor shops account for 150 of the 1000 thousandths, the remaining 850 carry the whole 3600 EUR. For our fraction of 45 thousandths, the lift share stops being 162 EUR and becomes 190.59 EUR a year, because the same bill is now divided by 850 rather than 1000. There is nothing irregular about it: it is the direct effect of the rule in paragraph 4, and it is why it is worth knowing how many of the building’s thousandths are actually inside the lift account.

The common reserve fund is added to the fee

Article 4 of Decree-Law 268/94 makes it compulsory to set up, in every condominium, a common reserve fund to cover the cost of conserving the building. Its paragraph 2 sets each owner’s contribution in a sentence worth reading slowly: each owner contributes an amount corresponding to at least 10% of their share of the remaining condominium expenses³.

The decisive word is remaining. It means the other expenses, that is, those which are not the fund. The 10% is computed on the share of those expenses and added to it. In the example above, a 1242 EUR share carries a further 124.20 EUR, and the annual fee is 1366.20 EUR. The wrong reading, on which 10% of the fee would be set aside inside it, would give 1242 EUR and a monthly fee of 103.50 EUR instead of 113.85 EUR.

Note the words at least, too. Ten per cent is the legal minimum, not the mandatory figure, and the assembly can vote a higher one, which is in fact prudent in an older building with works ahead. Paragraph 4 of the same article requires the fund to be deposited with a bank, and paragraph 3 requires any amount the assembly has decided to spend on another purpose to be replaced within twelve months.

When the fees can be equal for everyone

They can, but less often than people think. Article 1424(2) allows expenses relating to the payment of services of common interest to fall on the owners in equal shares or in proportion to their use. The exception comes, however, with three cumulative conditions¹:

1. it must appear in a provision of the condominium regulations, not in a one-off vote at any given meeting;
2. that provision must be approved without opposition, by a majority of owners representing the majority of the total value of the building;
3. the criteria must be properly specified and justified.

And its reach is limited: it covers services of common interest, not the expenses necessary for conserving the common parts, which continue to be shared by the value of the fractions.

Two notes for anyone buying or selling a fraction

The first is about debts. Article 1424-A, added by Law 8/2022, requires the administrator to issue, within a maximum of ten days, a written statement of all condominium charges in force on the fraction and of any existing debts, and that statement is a compulsory document for the deed. Liability for the debts is measured by when they should have been settled, and amounts falling due after the transfer belong to the new owner. The buyer may waive the statement, but in doing so expressly accepts liability for any debt the seller owes the condominium, which is rarely a good idea.

The second is about who owes. Article 1424(1) says the expenses are the responsibility of the owners of the fractions at the moment of the relevant resolutions. It is the date of the resolution that fixes who owes, not the date the work is carried out.

What the calculator does with all this

The condominium fees calculator starts from your fraction’s permilagem and the approved annual budget, applies the proportion in paragraph 1, handles the lift separately under paragraph 4, lets you say how many thousandths actually take part in those expenses, and adds the common reserve fund on top, returning the monthly and the annual fee. It deliberately leaves out the equal split of paragraph 2, because that depends on a provision in your own condominium’s regulations rather than on the default regime.

And it is worth remembering that the fee is not the only annual cost of owning a fraction: property tax is charged on the same property’s taxable property value, and anyone letting it out can deduct condominium expenses against rental income tax.