Source: Adobe Stock Author: Redaction 155 homes under supported rental and reduced rent The Mafra City Council opened, on 12 January, applications for 155 municipal homes. Of this total, 105 units are for supported rental and 50 for reduced rent. The homes are located in the parishes of Encarnação, Ericeira, Malveira and Venda do Pinheiro, in the Mafra municipality. Applications run until 23:59 on 30 January 2026 and require completion of the official form, accompanied by all mandatory and valid documentation. Application criteria and investment to boost housing supply To participate, applicants must hold a previously approved and valid Expression of Interest for Municipal Housing allocation, listed in the municipality’s candidate register. The municipal regulations clarify that Expressions of Interest submitted after the opening of the competition will not be accepted, ensuring that only eligible candidates can compete for these homes. This process guarantees transparency and organisation in the allocation of homes in Mafra. The Lisbon district municipality is currently investing €42.2 million in the construction and rehabilitation of housing, aiming to increase the housing stock by nearly 300 units in the region. The projects, funded by the Recovery and Resilience Plan, aim to expand social housing and address specific needs, such as lack of basic infrastructure, unhealthy, unsafe or precarious housing, overcrowding, and homes unsuitable for residents’ requirements. All interventions are currently underway, reinforcing the municipality’s commitment to improving housing in Mafra.
Source: Adobe Stock Author: Redaction Municipal support for renting a home in Portimão Renting a home in Portimão receives significant municipal support at the start of 2026, covering a total of 545 households. The measure represents an annual investment of around 1.9 million euros by the local council, aimed at easing housing costs in a municipality under strong pressure from the real estate market. The rental support consists of an average monthly subsidy ranging between 275 and 350 euros per household. This amount helps ensure greater housing stability for families facing economic difficulties, allowing them to continue renting a home in Portimão more securely. Who can benefit from rental support The municipal programme for renting a home in Portimão is open to new applications. All families that meet the legally defined criteria and require assistance to cover their monthly housing costs can apply. The subsidy is granted monthly upon submission of the rent payment receipt, ensuring that the financial support is effectively used to maintain the rental. This approach allows more effective monitoring and a direct application of public resources in support of families. Impact of the support on housing access According to the council, this rental support in Portimão reflects the municipality’s commitment to addressing the growing difficulties in accessing housing, a situation particularly evident in the Algarve. The shortage of supply and rising prices have increased the financial strain on families. The measure aims to prevent situations of vulnerability and housing exclusion, promoting greater social cohesion in the municipality. Detailed information on eligibility, criteria, and deadlines is available at the Housing, Social Development and Health Division Service Desk or on the municipality’s official website.
Source: Adobe Stock Author: Redaction Rents in the Algarve show mixed signals The rental market in the Algarve remains marked by high rents, although the most recent indicators reveal clear signs of deceleration. On an annual basis, rents recorded a significant increase, reflecting strong demand for housing in a region heavily influenced by tourism and international demand. However, the quarterly evolution shows a downward adjustment, suggesting that the growth rate may be losing momentum. This rent behaviour reflects a market beginning to adjust to household financial capacity. Despite average values per square metre remaining high, particularly in the most sought-after municipalities, the recent slowdown indicates greater caution from both landlords and tenants. Rents in the Algarve remain among the highest in the country, but the gap compared to other regions is beginning to stabilise. Differences between municipalities and urban pressure Analysis by municipality shows that rents do not evolve homogeneously. Municipalities with higher tourist pressure and lower available supply experience sharper increases, while areas with greater urban dispersion register more moderate variations. This asymmetry reinforces the idea that rents are strongly influenced by location, accessibility, and proximity to employment centres and services. In the most expensive municipalities, rents continue to price out part of the local population, contributing to changes in residential patterns. Conversely, areas considered more affordable are beginning to attract additional demand, which may put pressure on rents in those markets in the coming months. This movement reflects a gradual but continuous adjustment of the rental market. Rents in cities and national impact At the national level, rents maintain a moderate growth trajectory, with distinct variations between cities. The largest urban areas continue to lead in absolute values, reflecting the concentration of employment, services, and infrastructure. However, some medium-sized cities have recorded significant percentage increases, bringing local rents closer to the values seen in major centres. Despite this scenario, there are also signs of correction in traditionally more pressured markets. Slight decreases in rents in some cities demonstrate that the market is beginning to respond to households’ financial limits. This evolution contributes to greater market stabilisation, even though rent levels remain historically high. Districts, regions, and underlying trends Analysis by districts and regions confirms that rents have risen across most of the territory, although there are occasional exceptions. Insular regions and areas with lower housing supply show more significant increases, while interior regions continue to have more affordable rents. This regional disparity highlights structural imbalances in access to housing. Overall, rents reflect a combination of economic, demographic, and territorial factors. Rising demand, limited supply, and costs associated with construction and maintenance continue to influence the market. Nevertheless, the recent slowdown suggests that rents could enter a phase of greater stability over the coming months. Outlook for the rental market Rents are expected to remain high in the short term, but with less scope for sharp increases. Household affordability, coupled with a more cautious economic context, may limit further significant rises. For tenants and landlords, the challenge is to find a sustainable balance in a transforming market. In summary, rents continue to be a key topic in the Portuguese housing market. Despite annual increases, the signs of slowdown indicate a possible change in cycle, with a direct impact on housing access and residential mobility in Portugal.
Source: Adobe Stock Author: Redaction Increase in rental prices in Leiria The rental market in Leiria recorded a significant rise over the past year, with average prices growing by 12%. Currently, renting a home in the city costs, on average, €8.9 per square metre. This increase places Leiria among the cities with the highest rental price growth, in line with trends seen in Ponta Delgada (22.6%) and Viana do Castelo (12.3%). The rise in prices reflects growing demand and a relatively limited supply of properties available for rent in the region. Comparison with other Portuguese cities Among the Portuguese cities analysed, Lisbon continues to lead as the most expensive place to rent, at €22.1/m², followed by Porto (€17.4/m²) and Funchal (€16.2/m²). Other cities with higher average prices include Setúbal (€13.5/m²) and Coimbra (€11.9/m²). In the mid-range segment are Braga (€10.1/m²), Viana do Castelo (€9.5/m²), Leiria (€8.9/m²) and Santarém (€8.7/m²). The most affordable district capitals remain Viseu (€7.8/m²) and Bragança (€6.2/m²), highlighting the wide disparity in prices in the national rental market. Factors influencing the rise in prices The increase in rental prices in Leiria is due to several factors, including population growth in the city, demand for properties in central areas and a shortage of modern housing supply. In addition, proximity to employment hubs, infrastructure and urban services contributes to the appreciation of rental properties. The upward price trend reinforces the importance of planning the household budget and considering different areas of the city, where values can vary significantly.
Source: Adobe Stock Author: Redaction House rents could rise up to 11% in 2026: why? The rent update in 2026 could have a significant impact on family budgets. For tenancy agreements over one year old, landlords can apply an annual increase of up to 2.24%. However, the law allows accumulated updates from the last three years, which could result in a rise of more than 11%. This possibility only applies when the rent update has not been applied previously within the legal timeframe. Rent updates in 2026: what the law says The rent update coefficient for 2026 was set at 1.0224, reflecting inflation excluding housing. In practice, this means that for every €100 of rent, the monthly increase can be €2.24. Thus, a rent of €700 could rise to €715.68, while a rent of €1,000 could increase to €1,022.40 with the annual rent update. Accumulated updates can weigh more on the budget When there has been no rent update in the last three years, the landlord can apply the past coefficients cumulatively. In these cases, the rent update can exceed 11%, making the increase much more significant. For example, a monthly rent of €1,000 could rise by more than €100 at once, representing an additional financial burden for tenants. Rent updates are not mandatory: rules and deadlines Rent updates are not mandatory, being at the landlord’s discretion. However, they can only occur 12 months after the start of the contract or the last rent update. In addition, the landlord must communicate the update in writing, at least 30 days in advance, indicating the applied coefficient and the new amount. Tenants should check the calculations and can contest the rent update within 30 days if they identify any irregularities.
Source: Adobe Stock Author: Redaction Rental market in Portugal: underdeveloped and fragmented Renting a house in Portugal faces historic challenges. According to the OECD, only 12% of families live in formally rented homes, while informal rentals may reach 60%. The report notes that previous reforms to increase supply had limited success due to regulatory fragmentation, the freezing of rents before 1990, and political instability, which affects investor confidence. Additionally, the Portuguese housing stock, although large in percentage terms, is inefficient. Many homes are not primary residences: 12% were vacant and 19% were used as holiday homes in 2021. In Lisbon, 14.9% of properties were vacant and 9.3% were holiday homes, showing a supply poorly oriented to permanent housing. Structural failures and impacts on investment and energy efficiency The OECD highlights that weak investment in housing over recent decades, high land prices, construction costs, and a shortage of skilled labour contribute to market imbalance. The time to obtain building permits is high: in 2023 it ranged from 272 days in Funchal to 548 in Coimbra, 545 in Lisbon and 453 in Porto. Another critical point is housing energy efficiency. Despite mild climate and low energy demand, poor housing quality contributes to high levels of energy poverty, affecting residents’ health and well-being. Demand pressure and market trends The increase in households (+13% between 2010 and 2023) and the trend towards smaller family units worsen the imbalance between supply and demand. Relatively low property prices also attracted foreign buyers, accounting for about 10% of transactions between 2019 and 2024, especially for higher-value properties linked to ‘gold visas’. Tourism and the growth of short-term rentals also put pressure on the market. In Lisbon, properties listed on Airbnb rose from 18,277 in September 2019 to 21,181 in December 2024, representing around 7.6% of urban housing. Despite increased investment in social housing, Portugal spent only 0.1% of GDP in 2022, keeping a social housing stock among the lowest in the OECD. Renting a house in Portugal thus remains constrained by a fragmented market, insufficient supply, and growing pressure from both domestic and international demand.
Source: Adobe Stock Author: Redaction State properties as a housing solution The possibility of using public properties for public housing gained attention following the Government’s announcement to sell 16 properties in Lisbon and Porto. These assets, including buildings and land, are intended to fund public policies, including public housing. As an alternative to selling, the proposal suggests using these properties to directly expand the housing stock in a city where access to housing remains a growing challenge. Transfer of buildings to municipal management The proposal involves transferring some of these properties to municipal management, allowing their adaptation for public housing. Among the properties are buildings currently without a defined residential use, considered to have significant potential to meet the city’s housing needs. Using these spaces could accelerate the creation of public housing, avoiding lengthy sales processes and new construction. Municipal investment in public housing Lisbon City Council has been increasing investment in public housing, with a plan forecasting around €800 million by 2028. Since the start of the current term, approximately 3,000 municipal homes have been delivered, demonstrating a continued commitment to expanding housing availability. These figures reflect the council’s efforts to mitigate the housing accessibility crisis, particularly for families and young people. Delivery of 152 affordable homes This week, 152 homes under the affordable housing scheme were delivered to the same number of families, marking a significant milestone for the city. The new building, on Rua Sanches Coelho, comprises three blocks with T0 to T4 units and includes facilities such as a laundry, multipurpose room, and bicycle parking. A nursery and a commercial space are also planned. This development is part of the Affordable Rent Programme, which in the Forças Armadas development totals 476 units, with a total investment exceeding €70 million.
Source: Adobe Stock Author: Redaction New building strengthens affordable rent supply Lisbon City Council completed the delivery of 105 affordable rent housing units on Rua do Vale Formoso de Cima, in Marvila. The new building is part of the Affordable Rent Programme and aims to address housing access difficulties in the city, covering different family profiles and promoting sustainable housing solutions. Diverse typologies and accessibility The development consists of two residential blocks with apartments ranging from T0 to T4, including units adapted for people with reduced mobility. All homes are integrated into the affordable rent scheme, allowing more families to live in Lisbon with controlled costs. The building also includes underground parking, covered bicycle parking and a multi-purpose room. Municipal investment and European funding The construction represented an investment of more than 15 million euros and was funded by the Recovery and Resilience Plan. The project was carried out by the Urban Rehabilitation Society and is part of the municipal strategy to strengthen the supply of affordable rent, contributing to the urban regeneration of the eastern part of the city. Urban project and impact on the city The project forms part of a broader intervention in Vale Formoso de Cima, which includes the redevelopment of around 5,000 square metres, with green spaces, urban gardens and a connection to Vale do Fundão Park. The delivery of these affordable rent homes improves the quality of life of beneficiary families and reinforces the municipality’s commitment to housing as a central pillar of social and territorial cohesion in Lisbon.
Source: Adobe Stock Author: Redaction More favourable tax regime for moderate rents Rents will now benefit from a reduced IRS rate , applied to tenancy agreements with values within the moderate limits, up to €2,300 per month. This change, proposed by the Government and submitted for parliamentary consideration, aims to create a more favourable tax framework for both landlords and tenants, encouraging housing supply, including specific temporary housing situations. Under the established framework, all contracts respecting the defined moderate rent limits will qualify for the 10% IRS rate. This rate applies to property income uniformly, regardless of the contract duration, as long as the requirements set out in current legislation are met. This eliminates the need for long-term contracts to access tax benefits, allowing multiple types of tenancy agreements to be included. Special contracts and impact on the rental market For permanent residence, the minimum three-year term under the simplified affordable rental scheme remains in place. However, this requirement does not affect other rental contracts, where rents only need to comply with the minimum contractual term established by law, equivalent to one year. The exception applies to agreements intended for special and temporary housing purposes, which follow specific rules set out in the Civil Code. This category includes situations such as displaced students, teachers temporarily residing in other locations, or families requiring housing due to health reasons. These cases generally require flexibility and shorter terms, and rents associated with these contracts can now also benefit from the new reduced rate, provided they are properly identified in the signed agreement. Additionally, the legal framework establishes that, per calendar year, only one contract for special temporary purposes related to tourism may exist per unit or building. This limitation ensures that rents applied to these cases remain truly exceptional, avoiding distortions in the rental market. With these changes, the market is expected to benefit from greater balance, offering more diverse solutions for both permanent and temporary rentals. Rents thus become central to a strategy addressing academic, professional, and family mobility needs, while simultaneously reinforcing landlords’ fiscal stability. Although still subject to parliamentary approval, the measures could significantly impact access to housing and the management of rents in different contexts.
Source: Adobe Stock Author: Redaction Urban Market: Slower Growth in Lisbon and Porto The rental market has shown signs of slowing after several months of strong pressure on those looking to rent a home. Gradual improvements in supply are balancing the sector and contributing to more moderate price growth, especially in the main cities of the country. Lisbon remains the most expensive place to rent a home, followed by Porto, Funchal, and Faro. These cities still see very high demand, but the pace of rent increases has eased. The capital now shows a more stable trend, reflecting a market adjusting after years of high intensity. Porto shows a similar pattern, with rents still high but far from the sharp rises seen in previous periods. Cities and Districts Outside Major Centres Outside major cities, several towns have seen stronger increases, driven by demand for more affordable alternatives. Destinations such as Ponta Delgada, Viseu, Leiria, and Viana do Castelo have become increasingly sought-after for renting a home, reflecting a trend of decentralisation and preference for areas with better quality of life. Cities like Évora remained stable, while Bragança and Castelo Branco saw slight decreases. At the district level, almost the entire country followed the upward trend, although with varying intensity. The exception was Madeira, where rental values fell slightly. Districts such as Beja, Guarda, and Castelo Branco stood out with stronger growth, reflecting markets previously less pressured and now more exposed to new demand. Lisbon and Porto, by contrast, maintain moderate growth rates, showing the maturity of their urban markets. Outlook and Policies for the Rental Market The regional picture is similar: nearly all regions recorded annual increases, with notable growth in Alentejo and Algarve, where domestic and international demand for renting homes continues to have an impact. Madeira was the main exception, with a slight decrease. The Lisbon Metropolitan Area remains the most expensive region in the country, followed by the Algarve and Madeira. The current trend points to a more balanced market, though still challenging for those looking to rent a home in high-demand urban areas. Rising supply has helped slow rent increases, but demand remains strong, especially in economically dynamic areas with good services and accessibility. As the market slowly adjusts, it is essential to strengthen policies that encourage new construction and the recovery of available housing, ensuring more affordable options for those needing to rent a home in Portugal. Recent trends show the sector is beginning to respond to changes, but the need for greater stability remains central for the future of renting.
Source: Adobe Stock Author: Redaction New tax incentives for rents up to 2,300 euros The new draft law presented in the Assembly of the Republic aims to increase the supply of homes for rent through attractive tax benefits. The Government wants to encourage property owners to place homes for rent at moderate prices, up to 2,300 euros per month, thus creating a more accessible and competitive market. Among the most relevant measures is the possibility of IRS exemption on capital gains obtained from the sale of a home, provided the amount is reinvested in properties intended for homes for rent within this limit. The reference rent corresponds to 2.5 times the minimum wage expected for 2026, establishing the maximum threshold of 2,300 euros. Reduction of the IRS rate and incentives for companies Another central point is the reduction of the autonomous taxation rate from 25% to 10% on rental income from contracts intended for homes for rent. This measure seeks to make the housing rental market more attractive, strengthening security and financial returns for landlords. Companies that place properties as homes for rent also benefit: only 50% of the income will be taxed under IRC. In addition, investors in alternative investment vehicles will have a reduced rate of 5% on income linked to accessible housing rental. Exemptions in affordable rental and benefits for tenants Those who join the simplified affordable rental scheme may obtain full IRS exemption on income from homes for rent. To qualify, rents must comply with limits defined by typology and municipality, based on 80% of the median published by INE, and may also take into account factors such as energy efficiency. Even when opting for aggregation, income from homes for rent remains exempt, although it influences the rate applied to other income. The decree also creates Investment Contracts for Rental, guaranteeing tax benefits for up to 25 years for construction, rehabilitation or acquisition projects aimed at homes for rent. For tenants, the rent deduction limit increases: from 800 to 900 euros in 2026 and to 1,000 euros from 2027 onwards. Anyone buying controlled-cost housing will benefit from reductions in IMT and Stamp Duty, further supporting the goal of increasing the supply of homes for rent at more balanced prices.
Source: Adobe Stock Author: Redaction The evolution of rental in key regions The rental market has established itself as a central pillar for accessing housing in Portugal. With high demand and limited supply , renting has become essential for thousands of families seeking stability and alternatives to the dynamics of the purchase market. This shift shows that renting is no longer just a temporary solution but a fundamental part of the national housing structure. In metropolitan areas, where urban pressure is greatest, rental demand has been particularly high. Around the capital, many families seek rentals in nearby municipalities, where prices tend to be more balanced. This movement to peripheral areas shows how renting is influenced by the lack of affordability in urban centres, promoting a reorganisation of population flows. The consistency of demand demonstrates that renting continues to function as a practical response to urban market pressures. Renting as a territorial response In the north of the country, renting follows economic expansion and professional mobility. Municipalities neighbouring major urban centres are attracting residents seeking rentals at more accessible prices while remaining close to key employment areas. This trend highlights the importance of renting as a tool to support population distribution and adapt to labour market changes. The southern coast and several tourist regions also show a specific dynamic in the rental market. In these areas, significant demand and seasonal pressure directly influence rental values, creating imbalances throughout the year. The combination of permanent residents and extended occupancy increases market complexity and reinforces local economies’ dependence on renting. In many cases, renting is shaped by tourist demand, affecting availability and pricing for those intending to settle permanently. Outside major metropolitan hubs, renting plays a strategic role in revitalising smaller municipalities. Demand for quieter, lower-cost areas has led to the reoccupation of previously undervalued zones. Several councils have invested in urban rehabilitation to enhance rental supply, creating conditions to attract new residents. This effort contributes to territorial cohesion and demonstrates how renting can drive local development. Impact of renting on the economy and society Renting directly influences labour mobility and how families are distributed across the country. An efficient rental market facilitates professional commuting and allows more flexible life choices, essential in a constantly evolving economic context. However, when prices exceed residents’ financial capacity, renting becomes a significant challenge, requiring policies that balance supply and demand. The future evolution of the market will depend on the ability to increase supply, improve accessibility, and create mechanisms that strengthen confidence among landlords and tenants. Renting will continue to play a decisive role in urban growth and how families adapt to economic and social challenges. The increasing importance of renting in Portugal shows that this housing model is central to a strategy for a more balanced territory with solutions aligned to current needs.
中文(简体)
Português
English
Français
Español
Deutsch
Nederlands
Русский
