What is the new income tax rate for rental property in Portugal?
Real Estate News Europe - What is the new income tax rate for rental property in Portugal for residential purposes and for non-residential lease agreements?
Here is the new income tax rate for rental property in Portugal for residential purposes:
The new income tax rate for rental property in Portugal for residential purposes is now 10% as long as the property is used exclusively for the residence of one person and the monthly rent does not exceed the limit defined by law that is 2,300 euros per month.
The former income tax rate paid by landlords for property rentals was 25% and the huge price drop is to encourage renting at moderate prices.
Portugal´s Personal Income Tax Code published on September 15th, 2026 sets out the new income tax rate for rental property in Portugal for residential purposes even if the lease agreement for the tenant is signed with a company, according to Art.72º F.
When the lease agreement is signed between the landlord and a company, the intended tenant must be identified by name for tax purposes in the contract. The lease agreement must also include the express prohibition of subletting, assignment of contractual position or any use of the property for commercial, industrial or service purposes.
Portugal´s new real estate law is for property income earned until December 31, 2029.
Here is the income tax rate for rental property in Portugal for non-residential lease agreements:
For rental income from non-residential lease agreements, the Personal Income Tax rate is 28%, with the option to include it in the overall tax bracket.
