Source: Adobe Stock Author: Redaction Anyone who rents out a home before selling it loses IRS capital gains exemption Anyone who places their main private residence on the rental market before selling it may lose the exemption from IRS on capital gains. The Tax Authority clarifies that maintaining the tax address does not, on its own, guarantee access to the exemption from IRS on capital gains. The decisive factor is the effective use of the property as a main private residence in the 12 months prior to the sale. Legal conditions for IRS capital gains exemption The exemption from IRS on capital gains depends on cumulative requirements set out in the Personal Income Tax Code. To benefit from the exemption from IRS on capital gains, the proceeds from the sale must be reinvested in the purchase of another main private residence, land for construction or renovation works. In addition, the intention to reinvest must be declared in the IRS return. The reinvestment period for the exemption from IRS on capital gains runs between the 24 months before and the 36 months after the sale. Main private residence and loss of benefit The Tax Authority defines a main private residence as the place where family life is stably centred. When the property is rented out, it no longer meets this requirement, potentially jeopardising the exemption from IRS on capital gains. Even if the tax domicile remains unchanged, this is not sufficient to guarantee the exemption, as the effective use of the property is decisive. Tax risk when renting before selling Renting out the home before selling it may change its tax classification and lead to the loss of the exemption from IRS on capital gains. The Tax Authority’s interpretation reinforces that the exemption from IRS on capital gains depends on the actual use of the property as a main private residence. Therefore, any decision to rent it out beforehand should be carefully assessed, as it may result in the loss of the associated tax benefit.
Source: Adobe Stock Author: Redaction IHRU digital platform The Institute for Housing and Urban Rehabilitation (IHRU) has launched a new digital platform dedicated to the Landlord Compensation scheme, created to support property owners with old rental contracts. This digital solution allows all processes related to the Landlord Compensation scheme to be centralised, including application submissions, annual renewal requests and tracking of ongoing cases. The platform aims to simplify the management of support linked to rental contracts dating back to before 1990. According to IHRU, all previously submitted applications have been automatically migrated to the new system, ensuring continuity without the need for beneficiaries to resubmit. How the compensation scheme works The Landlord Compensation scheme was created in July 2024 to support landlords who continue to charge old-controlled rents, often limited by legal tenant protection rules. The new platform allows users to track payments, receive notifications, respond to clarification requests and update application data. It is also possible to request changes when necessary, making the process more transparent and accessible. The scheme applies to contracts signed before 1990, covering cases where tenants are over 65 years old, have a disability of 60% or more, or have annual incomes below five times the national minimum wage. Support and scheme conditions The financial support provided under the Landlord Compensation scheme is paid monthly for a period of 12 months and can be renewed via a new application on the IHRU digital platform. This compensation mechanism aims to balance tenant protection with support for landlords affected by old rental contracts, ensuring greater predictability of income associated with tenancy agreements. With the introduction of the new platform, IHRU aims to improve the efficiency of the Landlord Compensation scheme, reducing bureaucracy and centralising all management in a single, simpler and more accessible digital system for landlords.
Source: Adobe Stock Author: Redaction Extraordinary PRA call in Lisbon The Lisbon City Council will move forward with an extraordinary call for the Affordable Rent Programme (PRA), aimed at residents aged 60 or over. The aim is to strengthen the response of the Affordable Rent Programme in light of housing access difficulties in the city. This new call for the Affordable Rent Programme seeks to cover households that cannot meet the usual criteria, but also do not qualify for social housing. The municipality argues that the current market has left many senior households without viable alternatives. Rules of the Affordable Rent Programme The Affordable Rent Programme in Lisbon will have specific requirements for applicants aged 60 or over, including tax residence in the municipality. Annual income must be between around 6,445 euros and approximately 12,000 euros, creating an intermediate range of access to the PRA. Rent calculation under the Affordable Rent Programme will be based on an effort rate of 23%, and may include bonuses for dependants. According to the proposal, this allows the rent value to be adjusted to the reality of the households covered by the PRA. Housing pressure and senior protection The housing councillor of Lisbon, Vasco Moreira Rato, argues that the Affordable Rent Programme is essential to protect the senior population facing difficulties in accessing housing. According to the official, the current property market creates additional barriers for people close to retirement or already retired, making the PRA a necessary response. The aim is to ensure housing stability and the continued residence of older citizens in the city. The legal framework has also contributed to greater reluctance from landlords to rent to people in older age groups, reinforcing the need to strengthen the Affordable Rent Programme. Political decision and PRA implementation The proposal for the Affordable Rent Programme will be voted on in a municipal executive meeting, with approval virtually guaranteed due to the political majority led by Carlos Moedas. The executive, which also includes councillor Diogo Moura, will also decide on other municipal honours at the same meeting. The measure is part of a broader strategy to strengthen the Affordable Rent Programme in Lisbon, in a context of strong pressure on the rental market. Housing remains a key item on the local political agenda, with the PRA seeking to balance access to the city between different socioeconomic groups and age brackets.
Source: Adobe Stock Author: Redaction Social housing and rental balance Social housing plays an important role in stabilising the housing market in Portugal by reducing demand pressure and contributing to a more moderate evolution of rents. This type of supply creates indirect competition for the private sector and helps ensure greater predictability in rent behaviour. According to recent analysis, social housing also strengthens territorial cohesion and facilitates labour mobility by allowing more families to access stable housing solutions in different regions. In periods of greater tension in the rental market, its presence acts as a stabilising element for rents. Limited supply of social housing in Portugal Despite its positive impact, social housing accounts for only around 2% of the total housing stock in Portugal, a low figure compared with several European countries. This supply is mainly provided by public entities, with limited involvement from cooperatives or non-profit organisations. The distribution of social housing is also uneven, being concentrated mainly in some metropolitan areas and specific regions, while most municipalities have very limited availability. This territorial imbalance contributes to differences in access to housing and may increase pressure on the private rental market. Short-term rentals and rental impact Short-term rentals have been identified as a relevant factor in rent dynamics in higher-density urban areas. Their expansion is associated with a reduction in housing available for long-term rental, increasing pressure on the housing market. In more sought-after areas, this shift in supply contributes to rising rents and to changes in the residential profile of some neighbourhoods, with a higher presence of visitors and lower permanence of residents. This phenomenon is more visible in tourist areas and urban centres. Demand pressure and housing supply limits The Portuguese housing market continues to be constrained by structural supply limitations, including labour shortages, lack of available land, complex regulation and rising construction costs. These factors make it difficult to respond to accumulated housing demand. Although a significant housing shortfall has been estimated over the past decade, more recent data suggest a convergence between demographic trends and new supply, pointing to a possible stabilisation of rent pressures in the future.
Source: Adobe Stock Author: Redaction National overview of rents in Portugal Rents in Portugal continue to show strong regional disparities, with significant differences between coastal and inland areas. According to recent data from May 2026, the rental market remains under pressure, especially in areas with higher demand. At the top of the national ranking is Alcácer do Sal, where the average rent reaches €3,500 per month, followed by Cascais at around €2,700, and Sines with average values of approximately €1,850. These figures reflect the high pressure on the rental market in areas with strong residential and tourist appeal. Mafra among the most expensive municipalities Mafra stands out by being included in the top 10 municipalities with the highest rents in Portugal, reinforcing the upward trend in the rental market in the Lisbon Metropolitan Area. Although it does not lead the ranking, Mafra shows values above the national average, placing it among the most expensive municipalities to rent a home. Its proximity to Lisbon and the growing demand for housing in peripheral areas contribute to this increase in rental prices in Mafra. The dynamics of the real estate market in Mafra are directly linked to the capital’s expansion effect, with many households seeking more affordable alternatives, even if rents remain high compared to the rest of the country. Regional disparities and cheaper municipalities While some municipalities record very high values, inland Portugal maintains significantly lower rents. Vila Velha de Ródão and Vila Viçosa show average values of around €450 per month, while Bragança stands at approximately €575. These differences highlight the strong imbalance in Portugal’s rental market, with demand heavily concentrated in urban and coastal areas. In Lisbon, for example, the average rent is around €1,700 per month, confirming the ongoing pressure in the capital. Overall, Portugal’s rental market remains marked by regional disparities, with Mafra playing a relevant role among the municipalities with the highest rents.
Source: Adobe Stock Author: Redaction Rental programme with low uptake The Lisbon Association of Landlords considers that bureaucracy and the complexity of processes are undermining the results of the affordable rental housing programme in Portugal. According to the organisation, the difficulty in submitting and approving applications, both from landlords and tenants, has discouraged participation in the scheme. At issue is the Rental Support Programme (PAA), created in 2019 with the aim of increasing the supply of more affordable housing, through tax incentives such as exemptions in IRS, IRC and IMI for landlords who charge rents below the market median. Bureaucracy and weak programme participation According to data referred to regarding the programme, there are around one thousand active contracts since its launch, a figure considered far below initial expectations. The goal of reaching a significant share of the market has fallen short, representing only a small percentage of the rental housing sector in Portugal. The association argues that this result mainly reflects the administrative complexity of the programme, which includes lengthy and unintuitive processes. From its perspective, landlords seek stability and predictability in the market more than isolated tax benefits, pointing to trust as a key factor for participation. Oversight, data and market impact Another critical issue relates to programme oversight. Despite the tax exemptions granted, there are concerns about monitoring compliance with the rules, particularly in cases where rents may exceed the defined limits. The lack of more effective control mechanisms raises doubts about the overall effectiveness of the scheme. The absence of automation in tax information processing is also highlighted, particularly in the completion of IRS declarations related to rental income, which requires additional steps from taxpayers, even though the information is already available to the tax authorities. In addition, the suspension of essential statistical data on the rental market makes it harder to track updated trends in rents. In a context of strong pressure on housing prices in Portugal, the lack of up-to-date information and the bureaucracy associated with support schemes are seen as additional obstacles to the development of affordable rental housing.
Source: Adobe Stock Author: Redaction Rental contracts with legal protection The new investment contracts for rental housing (CIA) are part of the housing tax package and are aimed at institutional investors developing homes for rent at moderate prices. The scheme provides significant tax benefits and an additional safeguard: if legislative changes affect the balance of rental contracts, investors may be entitled to compensation. This investment model in rental housing was designed for large-scale projects aligned with the build to rent concept and allows long-term contracts with the State through the Institute for Housing and Urban Rehabilitation. Tax benefits in rental housing Investment contracts for rental housing offer a set of tax incentives designed to encourage the construction of rental housing. Key advantages include exemption from IMT, exemption from AIMI and reduced VAT on the construction or renovation of properties intended for the rental market. Rental investors also benefit from IMI exemption for several years and a subsequent reduction throughout the contract. Under certain conditions, partial VAT refunds may also apply for architecture and engineering services linked to rental projects. To access this investment scheme, developers must ensure that at least 70% of the built area is allocated to rental housing and that rents fall within moderate levels defined by the regime. Conditions of rental contracts Rental investors must comply with strict requirements, including technical and management capacity, organised accounting and a regularised tax situation. These rental contracts also require maintaining the residential purpose of the properties and their exclusive use for rental or subletting. The scheme prevents asset sales without transferring the contractual position and requires full cooperation with public entities responsible for monitoring rental contracts, such as IHRU. Non-compliance and loss of tax benefits Failure to comply with rental contracts may lead to the termination of the CIA and the loss of tax benefits granted. In such cases, rental investors must repay the incentives received, in full or in part, depending on the timing of the breach. The rules also set payment deadlines and apply compensatory interest in case of non-compliance, reinforcing the binding nature of investment contracts for rental housing and ensuring greater legal certainty.
Source: Adobe Stock Author: Redaction Housing crisis requires new models Pressure on the property market continues to worsen access to housing in Portugal, especially in Greater Lisbon and Greater Porto. The shortage of available homes, combined with rising sale and rental prices, is making it harder to meet the needs of the middle class. In this context, the Build to Rent model emerges as an alternative to increase housing supply. This concept focuses on constructing buildings exclusively for rental purposes, allowing larger-scale projects and responding more quickly to growing demand. Build to Rent can increase supply Build to Rent is already widely used in several European markets and is now becoming more relevant in Portugal. The model makes it possible to develop housing designed from the outset for renting, creating scale and greater stability in the housing market. Despite its potential, challenges related to construction costs, urban planning rules and project profitability remain. Even so, sector specialists believe Build to Rent could play an important role in strengthening housing supply, especially in metropolitan areas. At the same time, public measures to encourage construction may have limited impact if they are not accompanied by conditions that facilitate larger-scale projects and reduce costs for property developers. Lisbon and Porto face greater pressure The Greater Lisbon and Greater Porto markets continue to stand out due to strong housing demand, supported by their ability to attract and retain working-age populations. This dynamic keeps prices high and encourages new property developments, although with increasingly compact homes. In peripheral areas, demand is more limited and households’ financial capacity constrains the development of new projects. The lack of new developments continues to increase difficulties in accessing housing, especially in the mid-market segment. In addition, the ageing population in some suburban areas may create opportunities for urban rehabilitation and strengthening housing supply without relying exclusively on new construction. Property market seeks sustainable solutions Market developments show that Portugal’s housing problem requires structural solutions and not just temporary tax measures. Build to Rent is identified as one of the models capable of creating housing supply on a larger scale and responding to growing urban demand. Investment in purpose-built rental projects could help stabilise the property market, increase housing availability and improve access to housing in Portugal’s main cities. With housing demand remaining high, the development of new property promotion models will be decisive in balancing supply and ensuring greater accessibility in the housing market.
Source: Adobe Stock Author: Redaction IFRRU focuses on affordable housing IFRRU is preparing to return to the market with a new model focused exclusively on housing for affordable rental. The financial instrument is expected to include a funding line of around 480 million euros, financed by the European Investment Bank and the Council of Europe Development Bank. The new IFRRU strategy abandons the previous model and adopts a simpler and more flexible structure, focused only on the construction and refurbishment of affordable housing. The aim is to increase the supply of homes for moderate rental, especially in the metropolitan areas of Lisbon and Porto. According to sector representatives, there are already developers and investment funds interested in moving forward with new projects as soon as the financing becomes available. IFRRU aims to speed up the response to the housing crisis through faster and less bureaucratic processes. Construction and refurbishment become priorities The new IFRRU will support projects involving the construction of new buildings and the recovery of vacant properties intended for affordable rental. The measure aims to respond to the shortage of available housing and rising rents in several areas of the country. The model also foresees greater participation from banks supervised by the Bank of Portugal, allowing simplified access without the need for complex public tenders. In addition, the European financing may be complemented by private capital from developers and financial institutions. Another new feature is the entry of specialised funds into rental management. IFRRU wants to attract institutional investors to the housing market, creating professional housing management solutions after project construction. IFRRU wants to speed up the response to the crisis Negotiations with the European institutions are at an advanced stage and may bring developments later this year. Until then, IFRRU is working with municipalities to identify land and buildings available for future affordable housing projects. The goal is to accelerate licensing, reduce bureaucracy and quickly increase the supply of rental homes. The new IFRRU therefore aims to strengthen investment in affordable housing and create more sustainable solutions to address housing access difficulties in Portugal. Funds and developers strengthen investment The return of IFRRU is expected to mobilise public and private investment in the housing sector, creating conditions for new affordable rental projects. The participation of investment funds may also increase the scale of available housing supply. With this new model, IFRRU aims to position itself as one of the main housing support instruments in Portugal, reinforcing the construction, refurbishment and availability of homes with more affordable rents for the population.
Source: Adobe Stock Author: Redaction Support reinforces public housing in Madeira The Regional Government of Madeira will invest 3.5 million euros in public housing between 2026 and 2027, through a programme contract with IHM – Investimentos Habitacionais da Madeira. This reinforcement of public housing is part of the Regional Housing Strategy 2020-2030 and aims to strengthen the public housing response in the region. Public housing funding will help reinforce social policies and support families with greater difficulties in accessing housing. According to the executive, the investment in public housing includes compensation related to social rents, various support measures and costs arising from public service missions in the public housing sector. IHM implements public housing policy IHM – Investimentos Habitacionais da Madeira will be responsible for implementing public housing policies, ensuring the delivery of regional programmes in the public housing sector. The programme contract provides for compensation of the operating deficit associated with public housing policies, ensuring the continued management of properties allocated to public housing. Public housing includes programmes such as social rental and reduced rent, which are essential for access to public housing for lower-income families. Regional strategy reinforces social investment Public housing investment is part of the Regional Housing Strategy 2020-2030, which aims to strengthen the supply of public housing in the archipelago. The public housing initiative seeks to increase the number of homes available for social rental, reinforcing the public housing response in Madeira. In addition to strengthening public housing, the Regional Government also approved other programme contracts, including investments in infrastructure and support for cultural and sports entities, reinforcing the overall commitment to regional development and public housing.
Source: Adobe Stock Author: Redaction Affordable rent programme covers 25 municipalities The affordable rent programme has received a new boost with the opening of applications for 68 homes in different regions of the country. The Institute for Housing and Urban Rehabilitation (IHRU) launched the applications under the Rental Support Programme, allowing access to homes with prices below those practised on the market. The homes available under the affordable rent scheme range from one-bedroom to five-bedroom properties and are spread across 25 municipalities, including Lisbon, Oeiras, Cascais, Porto, Setúbal, Coimbra and Aveiro. The aim is to increase the supply of affordable housing and respond to the difficulties many families face in accessing the rental market. Applications are open until 22 May and are intended for individuals and households that meet the criteria defined by the programme. How the affordable rental programme works To apply for affordable rent homes, candidates must first obtain the Application Registration Certificate through the Rental Support Programme Platform, available on the Housing Portal. Once all the required documentation has been gathered, the application must be submitted through the IHRU platform. The affordable rent programme was created to promote rental contracts with lower prices and greater stability for tenants. In return, property owners who place homes under this scheme may benefit from IRS or IRC tax exemptions on rental income. Access criteria include maximum income limits and specific conditions defined in each application process. The objective is to ensure that the homes reach families with greater need for housing support. PRR supports the rehabilitation of dozens of homes Of the 68 homes put out to application under the affordable rent programme, 48 were rehabilitated with funding from the Recovery and Resilience Plan and European NextGenerationEU funds. The total investment in the rehabilitation of these homes is around 2.4 million euros. The investment in affordable rent comes at a time when the housing market continues to be marked by rising rental prices and difficulties in finding homes available at prices compatible with household incomes. With new applications and more homes available, the affordable rent programme aims to increase the supply of rental housing and create more stable solutions for those looking for a home in different areas of the country.
Source: Adobe Stock Author: Redaction Public housing and rents in Lisbon More than 60% of municipal rents in Lisbon are below 100 euros, across a universe of more than 21,000 housing contracts. According to Gebalis data, 63% of municipal rents are below 100 euros and around 30% do not exceed 25 euros, highlighting the weight of public housing in the city. The Housing and Urbanism councillor, Vasco Moreira Rato, stressed that these figures demonstrate the importance of public housing, arguing that the structure of municipal rents reflects the financial capacity of the families living in municipal housing. Public housing in Lisbon represents around 10% of the resident population. Public supply and the role of private developers in housing The municipal official highlighted that public housing plays an essential role in responding to the housing crisis, but rejected the idea that it is the only solution. The council’s strategy is to combine public housing, affordable housing and private development, strengthening the overall housing supply in Lisbon. The councillor also noted that the municipality has been working with private developers, mainly through licensing processes and projects with affordable housing components. In a case involving a development in Olivais, the possibility of the developer transferring affordable housing to the municipality was mentioned as an alternative to other facilities. Affordable rent and new housing models Municipal housing continues to be complemented by programmes such as affordable rent, which aim to respond to different income profiles. The municipality considers that not all housing needs can be solved through public housing alone, requiring a combination of solutions. Vasco Moreira Rato argued that the housing crisis does not have a single solution, highlighting that the economic and social context is constantly changing. In this sense, the Lisbon municipality is seeking partnerships with private entities to increase housing supply, recognising that the council does not have all the necessary resources on its own. He also stressed that “everyone will be needed” to address the housing challenge in Lisbon, defending cooperation between the public and private sectors as essential to respond to growing demand.
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