Setting the rent for a new long-term lease in Portugal (2026)

For most homes you can set the rent for a new long-term lease freely, but one Mais Habitação rule still applies in October 2026: a home let under a contract signed between October 2018 and October 2023 may only be re-let at the last rent plus 2%, unless the new rent stays within the official affordable-rent limits. A reform that would scrap this rule early passed its first vote in Parliament on 30 September 2026, but it is not yet law. Within whatever room the law leaves you, price from real market data, and keep in mind that a rent of €2,300 a month or less can cut your income tax on it from 25% to 10%.

Is there a legal limit on the rent for a new lease?

The limit is in article 34 of Lei 56/2023 (Mais Habitação), often called the travão às rendas (rent brake). It covers new residential leases for homes that had a lease signed in the five years before the law came into force on 7 October 2023. For those homes, the new initial rent may not exceed the last rent charged under the previous contract × 1.02.

The rule has these features:

• It applies only above the affordable-rent limits. Under art. 34(2), the cap only bites if the new rent is higher than the general limits by home type and municipality. These are the limits of the Programa de Apoio ao Arrendamento (state affordable-rent programme) in Portaria 176/2019. As an illustration, the 2019 base table set €1,150 for a two-bedroom flat in the top band, which includes Lisbon. The limits have been updated since then, so check the current figure for your municipality before relying on it.
• You can catch up on missed indexation. If the previous rent was never raised by the annual coefficients, you may add the coefficients you skipped, for up to three years after each first became available (art. 34(3)).
• You can add the cost of major works. If the home has had deep renovation or restoration certified by the Câmara Municipal (town hall), you may add the cost you paid, up to 15% a year (art. 34(5)).
• Each coefficient can be used once. Each coefficient may be applied only once per calendar year (art. 34(6)).
• It runs until 2029. The rule has effect until 31 December 2029 (art. 54(2)).

Read literally, the rule targets homes whose earlier lease was signed between about 7 October 2018 and 6 October 2023. Many summaries describe it loosely as "homes let in the last five years". It does not cover a home that has never been let, or a home whose only earlier leases were signed outside that window. If your case is borderline, for example a lease signed in 2018 or a home let only since 2024, get a lawyer's view before you advertise.

What the pending reform would change

The government's rental reform (Proposta de Lei 103/XVII) was approved by the Council of Ministers on 9 July 2026. It would end the cap on new-contract rents three years early and let landlords and tenants agree the initial rent freely. It would also give the parties more freedom on deposits and advance rent (up to three months of advance rent is reported) and shorten the arrears period before a landlord can terminate from three months to two.

On 30 September 2026, Parliament approved the bill in general reading, with PSD, IL and CDS in favour and Chega abstaining. It now goes to committee, where it may be amended, and then to a final vote and promulgation. Until the new law is published and in force, article 34 still applies. If you are re-letting a capped home and can wait, it may be worth timing the new lease for after the reform takes effect. Do not sign a lease above the cap on the assumption that the law will change.

How to find the market rent for your home

INE (the national statistics institute) is the most reliable source. Its housing-rent statistics at local level publish the median rent per m² of new leases, based on contracts registered with the tax authority (Modelo 2). These are rents actually agreed, not asking prices. INE publishes:

• quarterly figures for regions and municipalities with more than 100,000 inhabitants;
• rolling 12-month figures for every municipality, and for parishes in Greater Lisbon, the Setúbal Peninsula and Greater Porto.

Portal asking prices (idealista and others) show what landlords are asking. They run well above INE. In May 2026, idealista's asking median was €16.3/m² nationally and €21.8/m² in Lisbon, as reported by Montepio. Use them to see your competition, not as the price tenants pay.

To estimate your rent:

1. Find your municipality's (or parish's) latest 12-month INE median.
2. Multiply it by the home's useful floor area.
3. Adjust for the home itself. Smaller homes get more per m²: in every region, studios and one-bed flats had the highest median €/m² (INE, Q1 2026). Also adjust for condition, energy rating, parking, outdoor space and furniture.
4. Compare the result with 10–20 live listings nearby that match the home, and with what local agents say actually lets.

Indicative rents by region

Median rent per m² of new leases (INE, as published and reported). These are medians across all sizes and conditions, so they are a starting point, not a valuation.

Notes:

• Q2 2026 figures come from INE's release of 29 September 2026 as reported by ECO and DNoticias. The other figures are from INE's Q1 2026 release (26 June 2026).
• In the Algarve, 9 of 15 municipalities with data were above the national median, and Albufeira was the highest.
• Worked example: a 70 m² flat in Porto at €14.29/m² comes to about €1,000 a month.

The €2,300 line and the 10% tax rate

Decree-Law 97/2026 created a 10% autonomous IRS rate, which applies from 1 January 2026 to 31 December 2029, to new and existing leases alike. To qualify:

• the rent must be within the moderate limit, which is 2.5 × the minimum wage, so €2,300 a month in 2026;
• the home must be let exclusively as housing for a named individual;
• the lease must be registered with the tax authority.

As reported, the limit is a condition, not a tax band. If the rent is above it, all of that lease's rent is taxed under the normal rules: 25% under CIRS art. 72(2), reduced for leases of five years or more. Because the limit is tied to the minimum wage, it should move each year.

The trade-off is sharp. Ignoring deductible expenses:

• €2,300 at 10%: €27,600 a year in rent, €2,760 tax, €24,840 net.
• €2,400 at 25%: €28,800 a year in rent, €7,200 tax, €21,600 net.

To match €24,840 net at 25%, you would need about €2,760 a month. On a lease of five to ten years, taxed at 15%, you would still need about €2,435. If your market rent sits between €2,300 and roughly €2,700, pricing at €2,300 often leaves you better off. It also widens your pool of tenants.

Two points to confirm with a tax adviser:

• whether the 10% rate applies to your situation as a non-resident (the text sets no residence condition, but practice is new);
• how any included charges are counted towards the limit (see below).

Furnished or unfurnished?

Portuguese law has no separate regime for furnished long-term lets. It is the same lease, and the money paid for furniture and appliances counts as rental income (CIRS art. 8(2)). In practice:

• Furniture lets faster to expats, students and people on assignment. Families who already own furniture often prefer an empty or part-furnished home.
• The premium is usually modest. Price it as part of one rent, and keep it under €2,300 if you are near the line.
• Furniture, appliances and decoration are not deductible against rental income (CIRS art. 41), and you will usually have to replace or repair them.
• Attach a signed, photographed inventory to the lease.

What can be included in the rent?

The parties decide in writing who pays which charges. If the lease says nothing, the default under Civil Code art. 1078 is:

• the tenant pays supplies to the home (water, electricity, gas, internet);
• the landlord pays the charges for common parts of the building: the condomínio (condominium fees).

Your options:

• Utilities in the tenant's name. This is the cleanest arrangement: you carry no consumption risk and no billing admin.
• Condominium fees. You can agree in the lease that the tenant pays them, or build them into a single rent. Either way, condominium fees you pay yourself are a deductible expense.
• "All-inclusive" rents. Amounts paid for services connected to the letting count as rental income too (CIRS art. 8(2)). Including bills therefore raises your taxable rent and stamp duty, and may push you over €2,300. If you do include bills, set a fair-use cap in the lease.

Pricing for a quick let versus the best tenant

Whatever you agree is the base for years. You cannot raise the rent during the first year. After that, unless the lease sets its own update rule in writing, each rise is limited to the annual coefficient: 2.24% for 2026 and 2.56% announced for 2027. An overpriced start costs you through vacancy, and an underpriced one costs you for the whole lease.

• Vacancy is expensive. One empty month costs 8.3% of a year's rent. Asking €1,250 instead of €1,200 gains €600 a year, but one extra month of vacancy costs €1,200 or more.
• Use the first two weeks as your test. Plenty of viewings but no applications means the home is overpriced or under-presented. Reduce the rent in one clear step rather than in small cuts over several weeks.
• Pay for quality, not top rent. A slightly lower rent to a well-documented tenant with stable income, references and a guarantor is often the best return. Arrears and a vacant month cost more than a small discount.
• Stay within the tax lines. Price within the €2,300 limit and the article 34 cap, and keep the agreed rent identical in the lease, the Modelo 2 registration and the receipts.

Checklist

• Check whether the home had a lease signed between October 2018 and October 2023. If it did, work out the article 34 ceiling, or whether the rent stays within the affordable-rent limits.
• Gather the previous rent, any missed coefficients and any town-hall-certified works.
• Look up the latest INE 12-month median for your municipality or parish and convert it to your floor area.
• Compare it with current listings and agents' views.
• Decide whether to stay at or below €2,300, and confirm with your tax adviser that you qualify for 10%.
• Decide on furniture and on who pays condominium fees and utilities, and write it into the lease.
• Follow the rental reform. Until it is published and in force, the current cap applies.