Portugal's New Rental Regimes Take Effect: Tax-Free Rent at 80% of the Local Median
From 1 September, Portuguese landlords letting at 80% of the municipal median rent pay no income tax on it, under the RSAA regime that replaces the old rental support programme.
Two rental regimes came into force in Portugal on 1 September 2026, both created by Decreto-Lei n.º 97/2026, published on 20 May. The Regime Simplificado de Arrendamento Acessível (RSAA) replaces the Programa de Apoio ao Arrendamento and targets individual landlords; the Contratos de Investimento para Arrendamento (CIA) targets investors operating at scale. The offer in both cases is the same in kind and different in degree: cap the rent, keep the tax.
RSAA — the deal for landlords
Rent under the RSAA is capped at 80% of the median rent per square metre in the municipality, as measured by INE, with the final ceiling adjusted for property type, energy rating and parking. There is no single national ceiling on the RSAA, which distinguishes it from the investor track, where rents are capped at a flat €2,300 a month. Stay inside the limit and rental income is fully exempt from IRS for individuals and IRC for companies, for as long as the contract runs and the rules are met.
The regime is open to private owners, property companies, funds and public entities. Contracts must run at least three years where the tenant takes permanent residence, or three months renewable for temporary residents such as students and relocated workers. Letting individual rooms qualifies, provided they meet autonomy and habitability standards.
The administrative chain matters as much as the tax break. Contracts are filed through the IHRU electronic platform; the contract and the tax office notification are due by 15 January of the following year, and IHRU confirms approval to the tax authority by 28 February. Benefits then apply retroactively from the contract start date. Breach the rent ceiling and the exemption is clawed back as back taxes plus compensatory interest.
CIA — the deal for capital
The investment track runs for up to 25 years and stacks a longer list of exemptions: IMT and stamp duty waived on acquisition, IMI waived in full for eight years and then reduced by half for up to ten more, AIMI waived for the life of the contract, 6% VAT on eligible works, and a 50% VAT refund on architecture, engineering and project services. To qualify, at least 70% of the construction must serve rental housing, and monthly rents are capped at €2,300.
The obligations are correspondingly heavier. Letting must begin within five years for construction and rehabilitation projects, or within one year for property already tenanted. A sale is permitted only if the buyer formally assumes the IHRU position. Non-compliance triggers restitution of the benefits — potentially the full 100% within the first ten years, plus interest.
The tenant side, and the open question
Tenants get a smaller, simpler concession: an IRS deduction of up to €900 on 2026 rents, rising to €1,000 from 2027. Monitoring is spread across IHRU, the tax authority, Social Security, the Notary Institute and INE.
Whether any of this expands supply depends on take-up, and take-up depends on arithmetic the state does not control. Glopra's Portuguese series shows a national gross rental yield of 4.29%, against a standardised effective tax of 10% on non-resident rental income. Trading a 20% rent discount for an exemption worth 10% of gross rent leaves a landlord roughly 10% of gross income worse off before costs, and the gap widens for anyone already letting above the municipal median — which is most of the Lisbon and Algarve stock, where asking rents run at €24.5 and €21.3 per square metre. The regime is likely to bite hardest where median rents are already close to market, and to be ignored where they are not. This is a description of the rules, not tax advice; the exemption depends on individual circumstances and on complementary regulation still to be issued.
Sources: idealista/news Portugal (RSAA and CIA rules in force), 1 Sep 2026 https://www.idealista.pt/news/imobiliario/habitacao/2026/09/01/77402-novas-regras-para-o-mercado-de-arrendamento-entram-hoje-em-vigor; PwC Portugal, Inforfisco flash on Decreto-Lei n.º 97/2026 https://www.pwc.pt/pt/pwcinforfisco/flash/outros/habitacao-alteracoes-fiscais-novos-regimes-incentivo.html