What are Portugal´s new Housing Rental rules?
- Portugal Business News - Valerie Charoux
- 3 hours ago
- 3 min read
Real Estate News Europe - Here are the new Housing Rental rules in Portugal, as well as the current housing rental market situation that is addressed by Portugal´s new housing legislation, according to an announcement by the Government of Portugal published on July 9th, 2026:
Portugal´s Council of Ministers approved a reform of the rental market aimed at increasing the housing supply and ensuring a more effective response to vulnerable families. Portugal´s news Housing decree is part of the "Building Portugal" strategy to promote access to housing and boost the rental market.
Portugal´s new Housing Rental rules address the shortage of supply, rising rents, and the high number of homes that remain unrented. The new housing legislation creates a simpler, more predictable, and balanced framework, encouraging owners to make more houses available.
What is the current housing rental market situation in Portugal?
Portugal just adopted new Housing Rental rules to address the current housing rental market situation. Here are the figures for Portugal´s current housing rental market situation:
Portugal has 250,000 empty houses that pose a security risk as they can easily catch fire.
Portugal registered a 68% increase in house rental prices since 2020 since the lack of housing supply raises prices
Only 22% of houses in Portugal are rented since the real estate sector concentrates on the acquisition market
What are the new Housing Rental rules in Portugal in 2026?
1 - Portugal is ending controls on new Housing Rental contracts:
Portugal has abolished controls on new housing rental contracts, while maintaining the regime applicable to existing contracts unchanged.
Landowners may now be free to define security deposits and advance rent payments, and rental agreements may now be signed and sent by email.
Portugal also ended the limits for opposing the automatic renewal of contracts and regulates the right of first refusal.
2 - Portugal is facilitating judicial decisions related to eviction and rent recovery:
Portugal has strengthened the mechanisms for rental contract termination in case of default and has simplified the procedures for vacating properties when there is a court ruling.
3 - Portugal is creating an Emergency Housing Fund (FEH) for home loss or domestic violence:
Portugal´s new Emergency Housing Fund will provide financial support for accommodation or relocation expenses, with automatic allocation within a maximum of 10 days after the application is submitted. The support will be managed by IHRU, in coordination with Social Security and other public entities.
Portugal´s new Emergency Housing Fund will provide up to €2,300 per month in rent support for 6 months. The housing support is a direct, non-refundable financial support to guarantee rapid, temporary or permanent rehousing.
For people who are over 65 years old or who have a disability of over 60% and who have rental contracts prior to 1990, rents can only be updated when the household's annual income is above 64,000 euros.
4 - Portugal´s measures to increase Housing supply include building incentives:
Portugal´s measures to increase Housing supply include simplifying construction licensing and applying a reduced VAT rate to construction that is now 6%.
5 - Portugal is simplifying the sale of houses in the case of inheritances:
Portugal´s new housing measures accelerate agreements between heirs to eliminate the issue of empty houses.
6 - Portugal has new Tax incentives for income from housing rentals:
Portugal has reduced IRS for housing leases and it is now limited to a ceiling of up to 10% income tax on rental income.
7 - Portugal´s new housing measures include support for young people to have access to housing:
Portugal´s housing support for the youth, that involves 180,000 beneficiaries, includes:
Exemptions from the Municipal tax on the Onerous Transfer of Real Estate (IMT)
Exemption from Stamp Tax (IS)
A Government Guarantee under the ¨The Porta 65 Jovem Program¨ that aims to provide support to young people aged between 18 to 35 years old to rent a house for permanent residence by allocating a percentage of the rent as a monthly subsidy. Through Decree-Law No. 42/2024, dated July 2, 2026, the possibility of applying for housing support without a lease agreement was introduced.
8 - Portugal is increasing its investment in public housing:
Portugal increased its investment in public housing to build 145,000 new houses.
