It is understood the woman, named locally as Brenda, 72, had not been seen by friends and family for a couple of months.
Excavations were carried out at the property on Tuesday night and the woman’s body was reportedly found under cement in the garden shortly after 8pm.
Portuguese authorities are said to have acted after being contacted by their British counterparts, after the woman’s son reported her missing in the UK.
The British Embassy told The Portugal News: “We can confirm the case of a British national reported as missing in the Algarve, Portugal since December 2014. We are providing the family with consular assistance.”
A man, the woman’s partner, who is believed to be 59, was arrested at the property that same night shortly after the digs were carried out. According to reports in the national press he told police that she had committed suicide.
Following his arrest the man, identified as Nigel, was held on charges of suspicion of murder.
A source close to the investigation explained that for an arrest to be made there must be enough grounds on which to base a suspicion of involvement.
In a statement on Wednesday the PJ’s Portimão Criminal Investigation Bureau said the man was to undergo a first judicial interrogation to see what measures of enforcement would be applied to him.
Shocked locals who knew the couple told The Portugal News they were “very surprised” at the developments and said the individual was regarded as “a nice man” who did odd jobs in the area.
He was known to play golf and regularly seen in the mornings at his local café where he was well-known among patrons.
Locals also revealed that Brenda had looked “very ill” in recent times and, in the past, is believed to have fought a serious illness.