Renovation passport Portugal: what the EPBD means for your property
By Pascal Niggli · July 8, 2026 · 14 min read
Since 29 May 2026, properties in Portugal rated D or below on the EU energy scale require a renovation passport under the EPBD. The passport sets out the staged upgrades needed to reach an A or B rating. It must be disclosed on sale or rental.
Housing stock affected
65%
Passport validity
15 yrs
Passport document cost
€300–800
Cost gap vs reality
15–25%
What is a renovation passport?
A renovation passport is a legal document that sets out the staged energy upgrade plan for a property. It is issued by a certified SCE energy auditor and must accompany any sale or rental of properties rated D or below.
The renovation passport was introduced by EU Directive 2024/1275, the recast Energy Performance of Buildings Directive, and became mandatory in Portugal from 29 May 2026. It is separate from the EPC (Certificado Energético) that already existed in Portugal, the EPC tells you the current rating, the passport tells you the required path to reach compliance.
Think of it as a planning document rather than a demand for immediate action. It specifies what work needs to happen, in what sequence, and to what standard, but the timing of each stage depends on your specific situation, whether you are selling, renting, or triggering a major renovation.
§ LEGALEU Directive 2024/1275/EU (EPBD recast), Transposed into Portuguese law from 29 May 2026. Issued under the SCE framework (Decreto-Lei 101-D/2020).
Which properties need a passport?
Any residential property rated D, E, F or G needs a renovation passport. In Portugal this covers roughly 65 percent of the housing stock.
EPC RatingPassport Required?
A+, A, B, CNo passport
D, E, F, GPassport required
The passport obligation is triggered in three situations: on sale of the property, on signing a new rental contract, or when starting a major renovation (defined as one that affects more than 25 percent of the building envelope or costs more than 25 percent of the property's market value). Routine maintenance does not trigger the requirement.
Properties that are currently exempt from the EPC requirement remain exempt from the passport: listed heritage buildings, buildings used for less than four months per year, and standalone buildings under 50 square metres.
i TIPIf you do not know your current EPC rating, check the certificate date on the SCE portal at sce.pt. Certificates issued before 2015 may not reflect the current scale, commission a fresh EPC before any sale or rental.
What does the passport actually contain?
The passport has six required components under the EPBD and the Portuguese SCE regulations:
1
Current EPC assessment
Full energy audit of the property as it stands, including U-values for walls, roof, and windows, the existing heating and cooling systems, and the annual primary energy consumption in kWh/m².
2
Staged renovation plan
A sequenced set of renovation measures, typically two to four stages, moving from the current rating toward A or B. Each stage must be logically ordered so later stages build on earlier ones rather than requiring rework.
3
Indicative cost per stage
Estimated cost for each renovation stage based on standardised unit costs. These are the figures that most consistently understate real market prices, see the section on the cost gap below.
4
Projected EPC rating after each stage
Modelled energy rating after each stage is complete, so the property owner can see the interim improvements and when full compliance is achieved.
5
Available incentives and financing
A list of applicable government incentives, PRR grants, EcoCredito, municipal subsidies, and any available financing products. This section varies significantly by municipality.
6
Auditor identification and validity
The SCE auditor's registration number, the date of issue, and the 15-year validity period. The passport must be registered in the SCE database.
What renovation stages does it require?
The number and type of stages depend on your current EPC rating. An F-rated property typically requires four stages. A D-rated property may need only two.
The most common renovation path for foreign-owned properties in the Algarve and Lisbon areas runs as follows:
Stage 1Building envelope, roof and external walls
Roof insulation (ETICS or equivalent), external wall insulation where applicable, and thermal bridge correction at structural junctions.
Passport:€8–12K
Market:€10–14K
Stage 2Windows and external doors
Replacement of single or low-performance double glazing with high-performance double or triple glazing meeting Uw values specified in the passport.
Passport:€6–9K
Market:€7–12K
Stage 3Heating, ventilation and hot water
Replacement of gas boiler or direct electric heating with an air-source heat pump. Hot water cylinder with heat pump or solar thermal collector.
Passport:€7–11K
Market:€9–13K
Stage 4Renewable energy generation
Solar photovoltaic system sized to the property's annual consumption, with battery storage where the passport specifies self-consumption optimisation.
Passport:€5–8K
Market:€6–9K
⚠ WARNINGPassport stage costs exclude scaffolding, site protection, waste disposal, permit fees (where required), and VAT at 23 percent. These exclusions typically add 20 to 30 percent to the headline figures.
Why passport cost estimates are wrong
Passport estimates use standardised national unit costs that exclude scaffolding, access, VAT, regional variation, and heritage premiums. Real costs in the Algarve and Lisbon run 15 to 25 percent above passport figures.
Renovation Measure · Passport vs Market Reality (Algarve)
MeasurePassport Est.Market Reality
Roof and envelope insulation€8–12K€10–14K
Window replacement€6–9K€7–12K
Heat pump installation€7–11K€9–13K
Solar PV and thermal€5–8K€6–9K
Total (F to A, typical)€26–40K€31–48K
The main exclusions from passport estimates are: scaffolding and temporary site access structures (often €2,000 to €5,000 for a standalone villa), VAT at 23 percent on materials and labour (6 percent for qualifying ARU rehabilitation work), regional demand premiums in coastal areas, heritage zone surcharges where the câmara requires specific materials or finishes, and structural remediation if envelope work reveals hidden defects.
For buyers negotiating on a property with an outstanding passport: use the market cost figures, not the passport estimates, when calculating the brown discount adjustment. The gap can easily represent €10,000 to €15,000 on a mid-range renovation.
The brown discount: how passports affect sale price
Properties with outstanding passport obligations are increasingly subject to a buyer-negotiated discount of 5 to 15 percent of the agreed price, reflecting the cost and disruption of mandatory renovation work.
The term brown discount (or brown penalty) comes from commercial real estate and refers to the price reduction buyers demand to account for the environmental and energy upgrade costs embedded in a property. It is now entering residential markets in Portugal as renovation passports make energy obligations explicit and legally binding.
Brown Discount by EPC Rating
RatingTypical DiscountContext
D-rated2 to 5%Two renovation stages, relatively modest cost. Buyers treat it as a known and manageable future expense.
E-rated5 to 10%Three stages, €22,000 to €35,000 in real costs. Increasingly a material factor in negotiation.
F or G-rated10 to 15%Four stages, €31,000 to €48,000 in real costs. Mortgage lenders beginning to factor into valuation. Some buyers walk away entirely.
i TIPIf you are selling a D, E, or F-rated property, investing in Stage 1 of the passport before listing can materially improve both the asking price and the pool of interested buyers. A completed Stage 1 typically costs €10,000 to €14,000 and removes the most significant buyer objections.
What obligations does the passport create for foreign owners?
For foreign property owners, the passport creates four practical obligations:
1
Disclose on sale or rental
The passport must be provided to any buyer or tenant. Failure to disclose is a legal violation under the SCE framework and can be used to challenge the validity of the contract.
2
Commission the passport before triggering events
The passport must be in place before signing a promissory contract (CPCV) for sale, before signing a new rental contract, or before starting a major renovation. It cannot be commissioned retroactively.
3
Renovation obligation follows the property
If you sell a property with an unactioned passport, the remaining obligations transfer to the buyer. The passport registers this explicitly. Buyers and their solicitors are now checking passport status as standard due diligence.
4
Use EPBD-qualified contractors
Renovation work carried out under a passport must use contractors with the relevant certifications, IMPIC alvará for general construction, DGEG registration for electrical and heat pump installation, and SCE-certified auditors for the post-renovation EPC reassessment.
⚠ WARNINGIf you are buying a property in Portugal with an outstanding renovation passport, your solicitor (advogado) must check the SCE database for the passport status and outstanding stages before you sign the CPCV. The seller cannot unilaterally cancel or modify the passport obligations.
Frequently asked questions
A renovation passport is a document issued under the EU Energy Performance of Buildings Directive (EPBD 2024/1275) that sets out the staged energy upgrades a property needs to reach an A or B EPC rating. In Portugal it is mandatory for properties rated D or below. It must be attached to any sale or rental agreement and must include a costed renovation plan for each stage.
Yes. Portugal transposed the EPBD requirement from 29 May 2026. Properties rated D or below must have a renovation passport. The obligation is triggered by a sale, a new rental contract, or the start of a major renovation. Properties exempt from the EPC requirement are also exempt from the passport.
The passport document itself costs roughly €300 to €800, issued by a certified SCE energy auditor. The renovation work it requires is separate and substantially more expensive. Passport estimates use standardised unit costs that typically understate real market prices by 15 to 25 percent.
Yes. Properties with outstanding passport obligations are subject to the brown discount, buyers reduce their offer by 5 to 15 percent to account for mandatory renovation costs. Properties where Stage 1 has been completed typically command a premium over comparable unactioned properties.
A renovation passport is valid for 15 years from the date of issue. It must be updated after each renovation stage is completed to reflect the new EPC rating. If the property is sold before the renovation is complete, the passport and its outstanding obligations transfer to the new owner.
Renovation passports are issued by certified energy auditors registered with SCE (Sistema de Certificação Energética). You can find registered auditors through the SCE database at sce.pt. The auditor inspects the property, assesses its current EPC rating, and produces the staged renovation plan.
This guide reflects Portuguese energy performance law as of July 2026, including EPBD Directive 2024/1275/EU and its Portuguese transposition effective 29 May 2026. It is intended as orientation for foreign property owners and is not legal or financial advice. Confirm your specific obligations with a certified SCE energy auditor and a licensed Portuguese solicitor before any transaction or renovation decision.
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Pascal is the co-founder of remodel. Originally from Switzerland, he has lived in Portugal for several years and has first-hand experience with permit, VAT, and contractor issues foreign owners run into. He built remodel to be the resource he wished existed when he started.
This guide provides general cost information based on remodel contractor network data. Actual renovation costs vary by property condition, scope, materials, and contractor. This is not a substitute for a detailed scope assessment and written quotation from a licensed contractor. Permit and tax information is general guidance, not legal or fiscal advice. Consult a licensed architect and tax advisor for your specific project.
Last updated: July 2026
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