Common Construction on Separate Property — Quid Iuris?

The Portuguese Supreme Court of Justice Ruling No. 9/2025 (Diário da República No. 174/2025, Series I) has standardised case law concerning the legal regime applicable when an ex-couple — married under the community of acquisitions regime — builds, using common assets, a house (the family home) on land belonging exclusively to one of the spouses.

At first instance, the court held that the construction amounted to a useful improvement (benfeitoria útil), thereby recognising a credit over the common estate. In other words, the land and the building erected on it would remain the separate property of the spouse who owned the land, but the common estate would hold a credit corresponding to the value of the improvement made.

That decision was overturned by the Court of Appeal, which found that Article 1726 of the Civil Code should apply. Consequently, the classification of the property would depend on which contribution had the greater value: if the land were worth less, the property would be deemed the separate asset of the spouse who owned it, with an obligation to compensate the common estate; if the building were worth more, both would be considered common assets, and the land-owning spouse would in turn be compensated for its value.

When called upon to decide the matter, the Supreme Court ruled that a construction built on land owned by one spouse, using common funds, constitutes not merely the improvement of an existing thing but the creation of a new one. This new asset remains the separate property of the land-owning spouse, yet generates a right of credit in favour of the common estate against that spouse’s estate, thereby restoring the patrimonial balance between them.

In other words, for the Supreme Court, the family home should neither be treated as a simple improvement nor as an accessio, and the automatic application of Article 1726 of the Civil Code must also be rejected. In the absence of a legal rule preventing such a conclusion or prescribing a different outcome, the Court held that ownership of the new building remains with the owner of the land, while the common estate holds a compensatory credit for the value of the construction.