Portugal Updates Housing Rules to Boost Rental Supply

Portugal is moving forward with a major housing reform package aimed at cooling the rental market in hubs like Lisbon and Porto. Under Law No. 9-A/2026, the government is offering significant tax breaks to landlords who commit to "moderate rents," defined as properties priced up to €2,300 per month.

The goal of the reform is to shift property usage away from short-term holiday stays and back toward long-term residents. Individual landlords who participate will see their personal income tax on rentals drop to 10%, while professional investment vehicles can access tax rates as low as 5%. The package also includes a 6% reduced VAT on construction for properties intended for the moderate-rent market.

Who is affected

This shift directly impacts the digital nomad community and long-term expats. While previous years were marked by a severe shortage of long-term inventory, these incentives are designed to stabilize prices and increase the number of available 36-month leases.

Tenants also see a direct benefit through higher tax deductions. The limit for IRS rent deductions has been raised to €1,000, providing some relief against the high cost of living in major cities. Non-resident buyers should take note of a 7.5% hike in the Real Estate Transfer Tax (RETT) unless they lease the property long-term within six months of purchase.

What to do

If you are looking for nomad news or planning a move, keep these practical points in mind:

• Search for "moderate rent" (renda acessível) listings, as these landlords are now incentivized to keep prices below the €2,300 threshold.
• Expect faster processing for rental contracts and licensing, as the government has simplified urban licensing rules to speed up supply.
• Be prepared for a minimum lease term of three years if you want to secure properties under this specific program.
• Watch for further implementation details expected by late August 2026, which will clarify the final application processes for specialized investment contracts.

Read our full Portugal guide for the complete picture.