The Church and Hospital were built in 1592 upon an existing hermitage from 1522 (or prior), devoted to the Holy Spirit, becoming the first church and hospital of the settlement. During the XVII and XVIII centuries they were rebuilt, becoming Igreja do Espírito Santo (also known as Igreja do Senhor dos Passos or Igreja da Misericórdia) with baroque features.
After the extinction of religious orders in 1834, the existing hospital facilities and services were transferred to the Convento de São Francisco da Vila. During the XXth century the old hospital building became a Finance Department, Court House and Archive. From 2010 the iron railings that existed on the windows were removed from the building.