Deposits, advance rent and guarantors in Portugal (2026 rules)

For a residential lease in Portugal you may ask for a deposit of up to two months' rent and, by written agreement, up to two months of rent in advance. These caps have applied since 1 January 2023 and are still in force in October 2026. On top of them you can ask for a guarantor, a bank guarantee or rent-default insurance. A bill approved in principle on 30 September 2026 would loosen the caps, but it is not law yet.

What you may ask for when the lease is signed

The rules are in article 1076 of the Civil Code (Código Civil). The State Budget Law for 2023 (Lei n.º 24-D/2022, of 30 December) rewrote that article with effect from 1 January 2023. Mais Habitação (Lei 56/2023) is often credited with these caps, but it did not change article 1076.

Before 2023, advance rent could cover up to three months and the deposit had no legal ceiling.

Advance rent is rent paid early and used up month by month; a deposit is security you give back at the end, less justified deductions. For example: with a rent of €1,000, the deposit can be at most €2,000, and you can agree up to €2,000 of advance rent on top of the first month's rent.

Asking for all of this at once is lawful but narrows your pool of tenants.

Guarantors (fiador): what they are liable for

A guarantor gives a personal guarantee (fiança, Civil Code arts. 627–654). They become personally liable for the tenant's obligations. Under art. 634, a guarantee covers whatever the tenant owes, including the legal and contractual consequences of late payment or fault. This can mean unpaid rent, the late-payment indemnity and damage to the property, if the contract says so.

The renúncia ao benefício da excussão prévia

By default, a guarantor can refuse to pay until you have first pursued the tenant's own assets without success. This is the benefício da excussão prévia (benefit of prior enforcement, art. 638).

Lease guarantees almost always include a clause in which the guarantor waives this benefit, or accepts liability as principal pagador (principal payer). Art. 640 then prevents them from invoking it. In practice you can then claim from the tenant and the guarantor together, without first exhausting the tenant's assets.

Rules that catch owners out

• Notify the guarantor of arrears in time. If the tenant has not cleared the arrears, you must notify the guarantor of the arrears and the amounts owed within the 90 days that follow (art. 1041(5), added by Lei 13/2019). You can only demand payment from the guarantor after that notice. Courts have held that you lose the right to claim from the guarantor any arrears older than 90 days if you miss this. Send the notice by registered letter as soon as rent goes unpaid, and again if the debt grows.
• Spell out how long the guarantee lasts. Since 2006 there has been no special statutory regime for lease guarantees, so the guarantee covers what the document says.
  • State whether it covers renewals, rent updates and damage, and that it runs until the keys are returned.
  • Courts have read open-ended clauses about "all renewals" narrowly.
  • On long leases, consider having the guarantor sign again at renewal.
• Check that the guarantor can actually pay. Ask for the same income evidence as for the tenant. A guarantor abroad with no assets in Portugal is harder to pursue.

There is legal debate about whether a guarantor counts towards the two-month cap, because art. 1076(2) allows security "by any of the legally provided forms". Common practice is a two-month deposit plus a guarantor; take advice before combining several guarantees.

Bank guarantees and rent-default insurance

Bank guarantee (garantia bancária). The tenant's bank promises to pay you up to a fixed amount if the tenant defaults. Ideally it is payable "on first demand". The tenant pays the bank's fees, and banks often require the tenant to pledge savings of the same value.

A bank guarantee given as the deposit counts towards the two-month limit. Check three things in the document: the expiry date (it should run beyond the lease end), the amount, and how you make a claim.

Rent-default insurance (seguro de renda or proteção de rendas). You take out this policy yourself. It reimburses unpaid rent within the policy's limits and often covers the legal costs of an eviction.

Terms vary by insurer. As an example, one Portuguese broker's product covers up to 12 months' rent, caps the insured rent at €3,000 a month, and applies a two-month excess before payments start. It covers only residential leases under the NRAU (the urban lease regime), so seasonal lets and room lets are excluded.

Insurers usually vet the tenant first; read the waiting period, excess and claim deadlines closely. Do not confuse this with "loss of rent" cover in a buildings policy. That pays when the home becomes uninhabitable after a fire or flood, not when the tenant stops paying.

Holding the deposit and declaring it

Portugal has no deposit-protection scheme like the ones in England and Wales. You hold the deposit yourself, and the law sets no rule on interest or on where you keep it. It is good practice to keep it in a separate account so that you can repay it promptly.

The tax authority treats the deposit as rental income (rendimento predial, category F). According to Portal das Finanças FAQ 1910:

• Include the deposit in an electronic rent receipt, giving the start and end dates of the lease as the period.
• When you repay it, document the refund and enter it in Anexo F of your IRS return as an expense you bore and paid.

The inventory: photos, condition and meter readings

Under art. 1043, the tenant must return the property in the condition received, except for the deterioration that comes with careful use. Art. 1043(2) adds a presumption: if there is no document describing the property's condition at handover, the home is presumed to have been delivered in good condition.

A signed inventory protects you both: it records the real starting point.

At move-in:

1. Go room by room and list every fitting, appliance and piece of furniture, with its condition.
2. Take dated photos or video, including close-ups of existing marks.
3. Record the electricity, water and gas meter readings, and photograph each meter.
4. List the keys, remotes and access cards handed over.
5. Have both parties sign and date every page, then attach the inventory to the lease.

At move-out, repeat the same walk-through against the original list, with new photos and meter readings, and both parties sign. Note anything disputed on the spot.

Returning the deposit and making deductions

Neither the Civil Code nor the NRAU sets a fixed deadline for returning the deposit. Write one into the lease, for example a set number of days after the keys are returned. Then you only need time to inspect the property, get quotes and check final utility bills.

You may deduct:

• unpaid rent;
• unpaid utilities or charges that the tenant owed under the lease;
• the cost of repairing damage beyond normal wear.

Normal wear stays with you. Examples are faded paint after several years, light scuffs and small picture-hook holes.

Back every deduction with the inventory, photos and quotes or invoices, and send the tenant a written breakdown. Return the balance promptly.

Unless the lease says otherwise, the deposit is not a substitute for the last months' rent. A tenant who stops paying at the end is still in arrears. You may then also claim the late-payment indemnity of 20% of the amounts due (art. 1041(1); it was 50% before 2019).

Typical disputes

• No inventory, or one too vague to show change.
• Deductions for ordinary wear, or without quotes or invoices.
• Final utility bills arriving after the deposit has been repaid.
• The tenant withholding the last rent "against the deposit".

If a dispute cannot be settled and a Julgado de Paz (small-claims court) serves the municipality, it can hear lease claims up to €15,000, except eviction actions. Otherwise the claim goes to the ordinary courts.

Screening tenants: what you may lawfully ask for

Checking a tenant's ability to pay is legitimate. The GDPR still applies: collect only what you need for that purpose, tell the applicant why you need it, and keep it securely.

Reasonable requests at the stage of a serious application or contract negotiation are:

• identification;
• the Portuguese tax number (NIF), which you need for the lease and receipts;
• proof of income, such as recent payslips, an employment contract or the latest IRS assessment;
• a reference from a previous landlord, if available.

DECO has criticised demands for payslips and tax returns just to book a viewing. Ask for these documents only once an applicant wants to proceed.

Limits to respect:

• ID card copies. Law 7/2007 prohibits copying the Portuguese Cartão de Cidadão without the holder's consent. The data protection authority (CNPD) says that consent is only valid if the holder is offered a real alternative, such as showing the card in person.
• Sensitive data. Do not ask about health, religion, political views or similar.
• Discrimination. Law 93/2017 prohibits refusing or conditioning a rental on grounds such as nationality, ethnic origin or religion. This also applies to the wording of adverts.
• Retention. Delete or return unsuccessful applicants' documents once you have chosen a tenant. Keep the chosen tenant's documents only as long as the lease and your tax obligations require.

What the reform approved on 30 September 2026 would change

The Government's bill revising the rental regime (Proposta de Lei 103/XVII) entered Parliament on 12 August 2026. It was approved in principle on 30 September 2026. As tabled, it would:

• remove the two-month ceiling on deposits;
• allow up to three months of advance rent.

PSD and Chega signed an agreement on the same day to limit those deposit and advance-rent provisions at committee stage. The final rules are therefore likely to differ from the bill. The bill still needs committee work, a final vote, promulgation and publication.

Until a new law is published in the Diário da República, the two-month caps apply to every lease you sign. Check the final text's transitional rules before relying on any change.

Checklist

• Ask for no more than two months' deposit and two months' advance rent, and put the advance rent in writing.
• Choose one or two guarantees (guarantor, bank guarantee or rent insurance) instead of stacking every option.
• In a guarantee, include the waiver of the benefício da excussão prévia and state that it covers renewals, rent updates and damage.
• If rent goes unpaid, notify the guarantor by registered letter within the 90-day window.
• Include the deposit in an electronic rent receipt, and record any refund in Anexo F.
• Make a signed inventory with dated photos and meter readings at move-in and at move-out.
• Set a return deadline in the lease, and itemise deductions with evidence.
• Ask for income documents only from serious applicants, never copy an ID card without consent, and delete the files of applicants you do not choose.
• Wait for the final text of the 2026 reform before changing your lease template.