Residential rentals in Portugal in 2026: what has changed and what is still under discussion

New tax incentives aim to bring more homes onto the rental market. For landlords the opportunity is real — but it depends on the rent amount, the purpose of the agreement and the tax framework applicable to each case.

The Portuguese rental market entered 2026 with a clear political priority: increasing the supply of housing. The State acknowledges that properties remain outside the market and that many landlords are wary of unstable rules, non-payment and the complexity of day-to-day management. The response combines tax incentives that have already been published with a wider rental reform which, at the date of this article, cannot yet be treated as law in force.

This distinction matters. A measure announced or approved by the Council of Ministers does not automatically affect existing agreements. Decreto-Lei n.º 97/2026, of 20 May, on the other hand, is already in force and introduced benefits with potential impact on residential rental income. Before deciding, a landlord should understand what has changed, what the requirements are and which aspects still depend on approval or further regulation.

Why is the State encouraging letting?

A shortage of available homes cannot be solved through new construction alone. Building takes time, requires investment and depends on licensing, labour and financing. Part of the public strategy therefore focuses on mobilising properties that already exist but remain vacant or away from long-term letting.

For that to happen, it is not enough to ask landlords to place properties on the market. Conditions have to make letting more predictable, more attractive in tax terms and legally safer. The new tax package acts on profitability, while the reform announced in July aims to change contractual rules and the mechanisms available in case of non-payment.

The political goal is shared, but the legal status of the measures differs: the tax incentives set out in Decreto-Lei n.º 97/2026 have been published; the general rental reform was approved by the Government as a draft law and still has to complete the legislative process.

The 10% autonomous rate for certain residential rents

One of the changes of greatest interest to landlords is the new article 45.º-C of the Estatuto dos Benefícios Fiscais (the Portuguese tax benefits statute). It provides for a 10% autonomous tax rate on property income arising from agreements intended exclusively for residential letting, where the monthly rent does not exceed the legal threshold and provided that no more favourable rate applies.

The benefit covers eligible income earned until 31 December 2029 and produces effects from 1 January 2026. That does not mean, however, that every rent below a given amount is automatically taxed at 10%. Application depends on meeting the legal requirements cumulatively and on the specific framework of the income and the agreement.

For corporate income taxpayers (IRC) or personal income taxpayers (IRS) with organised accounting under category B, the same provision sets out a different mechanism: only 50% of eligible income is taken into account. Here too, the form of taxation applicable to the property owner must be confirmed.

What does “moderate monthly rent” mean in 2026?

Decreto-Lei n.º 97/2026 defines moderate monthly rent as an amount not exceeding 2.5 times the guaranteed minimum monthly wage (retribuição mínima mensal garantida) set for 2026. In mainland Portugal that wage was set at 920 euros, so the general threshold is 2,300 euros per month.

This figure should be read carefully. The legal calculation may take into account everything paid under the agreement, including certain goods, equipment, ancillary parts or services that add value to the property, even where they are the subject of separate arrangements. The threshold may also be updated by ministerial order (portaria).

A rent of 2,300 euros or less is therefore only one element of the analysis. On its own it is not a guarantee of access to the 10% rate.

Is letting for residential subletting covered?

The act expressly covers residential letting, letting for residential subletting and residential subletting itself. This reference is relevant to models in which a company rents the property from the owner and then manages its residential occupation.

Even so, the tax benefit applicable to the landlord's income must be assessed against the specific wording of article 45.º-C, the exclusively residential purpose of the agreement, the total rent considered and the owner's tax situation. The fact that the act mentions letting for subletting does not allow the conclusion, without further analysis, that any such agreement automatically benefits from the reduced rate.

In practice, the agreement should clearly identify the residential purpose of the property and the agreed model of use. Consistency between the agreement, actual use, tax documentation and payments is decisive in supporting any framework.

The new affordable rental regime starts in September

The same decree-law created the Simplified Affordable Rental Regime (Regime Simplificado de Arrendamento Acessível), intended to replace the earlier Rental Support Programme (Programa de Apoio ao Arrendamento). It produces effects from 1 September 2026 and is based on a rent limit linked to 80% of the median rent per square metre in each municipality.

This regime should not be confused with the general 2,300 euro threshold associated with moderate monthly rent. They are distinct mechanisms with their own rules and conditions. A landlord interested in affordable letting should confirm the regulations, the limits applicable to the municipality and the procedures available at the time of application.

What has not changed yet: the July rental reform

On 9 July 2026 the Council of Ministers approved a draft law to reform the urban tenancy regime. The measures announced include greater freedom in setting deposits and advance rent, changes to opposition to renewal, electronic communications by agreement and simplification of mechanisms related to non-payment and vacating the property.

These measures should not be applied in advance. Until the draft law is approved by Parliament, enacted, published and has reached its date of entry into force, agreements remain subject to the rules currently in force.

For landlords this means it is not prudent to change contract templates, impose new conditions or take decisions based solely on a Government statement. Legislative monitoring should continue until there is a final text, because the content of a draft law can change during the parliamentary process.

What should a landlord confirm before deciding?

A letting decision should not rest on a tax rate alone. Before choosing the rent, the term or the management model, it is advisable to check:

• whether the agreement is intended exclusively for residential use;
• which total amount is relevant for the rent threshold;
• how furniture, equipment and associated services will be treated;
• the category and tax regime applicable to the landlord's income;
• whether a more favourable rate applies given the term of the agreement;
• which reporting and documentation obligations must be met;
• how maintenance and upkeep responsibilities are allocated;
• which tax consequences may arise from a later change to the agreement or to the use of the property.

The analysis should be carried out before signing and revisited whenever the legislation, the rent or the use of the property changes.

Professional management: turning a possible benefit into an organised process

Tax incentives can make letting more attractive, but on their own they do not solve the day-to-day work. Qualifying applicants, following up payments, organising documentation, handling requests, coordinating interventions and keeping the landlord informed still take time and method.

This is where professional management can add value. With ANH Connect, the landlord has a single partner for rental management. We assess the property, present a proposal and, where there are conditions to proceed, set out in writing the rent, the term, the use and the responsibilities. We then follow the residential occupation, the payments, incidents, coordinated maintenance and the scheduled inspections. You can also read how rental management reduces a landlord's day-to-day concerns.

The tax framework is neither promised nor presumed. Any scenario presented is indicative and must be validated by an accountant, a tax lawyer or the Portuguese tax authority. The aim is to allow the landlord to assess the property with clear information, organised documentation and defined responsibilities from the outset.

Conclusion: 2026 brought opportunities, but it requires informed decisions

2026 marked a relevant shift in housing policy: the State began using new tax incentives to stimulate the supply of rental properties. The 10% autonomous rate can be a significant advantage in eligible agreements, but it should not be communicated as a universal or automatic benefit.

At the same time, the broader reform of tenancy rules is still going through the legislative process. Distinguishing law in force from political proposals protects landlords from premature decisions and from agreements built on rules that may still change.

If you are considering placing your property on the market, the first step is to look at the achievable rent, demand in the area, the model of use and the sustainability of the operation. ANH Connect can carry out that initial assessment and present a solution suited to the characteristics of the property.

Frequently asked questions

Official sources

• Decreto-Lei n.º 97/2026, of 20 May — Diário da República (official gazette)
• Declaração de Retificação n.º 26/2026/1, of 13 July — Diário da República
• Estatuto dos Benefícios Fiscais, article 45.º-C — consolidated version
• Decreto-Lei n.º 139/2025, of 29 December — guaranteed minimum monthly wage of 920 euros in 2026
• Council of Ministers statement of 9 July 2026 — draft rental reform law