Government Rushes to Clarify Legal Status of 300+ New Parishes Ahead of October Elections
The Portuguese Government has announced a new legislative proposal aimed at clarifying the operational and legal framework for more than 300 new municipal parishes ('freguesias') that are set to be created following the local elections on October 12. The government announcement, made via the Council of Ministers this Thursday, comes as a response to growing concerns about potential administrative chaos. The new parishes are the result of a law passed in January that allows for the reversal of unpopular parish mergers enacted a decade ago. However, the original law lacked the detailed regulations needed for a smooth transition, creating significant legal uncertainty.
The specific details of the new proposal aim to “clarify and operationalize the reinstatement of parishes,” according to the official government statement. The core of the problem lies in the complex administrative process of dividing the assets, debts, and personnel of the larger 'unions of parishes' that will be dissolved. Key issues that the new law must address include the legal mechanism for transferring funds from the Parish Financing Fund (FFF) to ensure employees in the new parishes are paid, the fair division of public property and existing financial liabilities, and the formal process for establishing new legal and fiscal identities for each new parish, including tax numbers and bank accounts.
The implementation timeline is extremely tight and represents the main source of risk. The local elections are scheduled for October 12, a mere 17 days from the announcement of the bill. The legislative process requires the bill to be debated and approved in the Assembly of the Republic, and then promulgated by the President, Marcelo Rebelo de Sousa. Given these procedural requirements, there is a significant risk that the clarifying legislation will not be in effect by the time the new parish councils are elected, potentially leaving them without the legal authority or administrative tools to function correctly from day one.
This situation affects a wide range of stakeholders, most notably the municipal employees and local residents of the more than 300 communities involved. The Minister of Economy and Territorial Cohesion, Manuel Castro Almeida, had previously warned about the severity of the issue, stating in July that without action, “we could let some employees of the parish unions reach the end of October and have no one to pay their salary.” This highlights the potential for significant disruption to public services and administration at the most local level. Property owners and real estate investors are also directly impacted, as the 'freguesia' plays a role in property-related administrative processes.
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To manage the transition, the law provides for the creation of 'de-aggregation committees.' These bodies are tasked with the practical work of separating the parishes. However, their actions must be in full compliance with a clear legal framework, which is what the current bill is intended to provide. The compliance requirements for these committees are one of the key areas needing clarification. The government's proposal aims to provide these committees with the necessary legal backing to perform their duties, such as the official partitioning of assets and the creation of new administrative entities, without facing legal challenges.
The industry reaction, particularly from municipal associations, has been one of anxious waiting. There is a broad consensus that clarification is urgently needed. The National Association of Portuguese Municipalities (ANMP) has previously called for a clear and robust legal framework to avoid a chaotic transition. The government's rationale for acting now is to “reinforce institutional stability in the transition process” and “acautelar algumas questões relativas ao funcionamento e a prestação dos serviços aos cidadãos” (safeguard some issues related to the functioning and provision of services to citizens). The delay in presenting this solution, however, has drawn criticism.
Legal professionals have pointed out that the tight schedule is a direct result of the initial de-aggregation law being passed without sufficient accompanying regulation. A constitutional law expert noted, “This is a classic case of political will outpacing administrative planning. The decision to allow parishes to separate was popular, but the hard work of figuring out the details was postponed. Now, the government is in a race against the clock.” The government had initially considered a decree-law, which would be faster, but has opted for a full bill, which requires parliamentary debate, further compressing the timeline. Navigate Portuguese property regulations with expert guidance at realestate-lisbon.com.