Landlord tax in Portugal in 2026
Rental income from Portuguese property is taxed in Portugal whether or not you live there. It is Category F income, taxed at an autonomous rate of 25% on residential letting and 28% on everything else (article 72 of the IRS Code). Since 1 January 2026, residential rents of up to €2,300 a month are taxed at 10% on income earned up to 31 December 2029 (article 45-C of the Tax Benefits Statute). Long permanent-residence leases pay 15%, 10% or 5%, and the affordable-rent scheme pays nothing at all. The regimes never stack — the most favourable one applies.
How rental income is taxed (Category F)
Rent from let property is Category F income, defined in article 8 of the IRS Code. By default it is taxed at an autonomous rate — it is not added to your other income — although residents may opt for aggregation. The rates in force in 2026:
| Situation | Rate | Legal basis |
|---|---|---|
| Residential letting (general rule) | 25% | art. 72(2) of the IRS Code |
| Residential rent up to €2,300/month (2026–2029) | 10% | art. 45-C of the Tax Benefits Statute |
| Permanent residence, 5 to 10 year lease | 15% | art. 72(3)–(5) of the IRS Code |
| Permanent residence, 10 to 20 year lease | 10% | art. 72(3)–(5) of the IRS Code |
| Permanent residence, 20 years or more | 5% | art. 72(3)–(5) of the IRS Code |
| Affordable-rent scheme (RSAA) | exempt | art. 6(1) of annex iii to DL 97/2026 |
| Non-residential letting (retail, offices) | 28% | art. 72(1)(e) of the IRS Code |
| Aggregation (option, residents) | progressive rates | arts. 68 and 72(13) of the IRS Code |
Work out which one applies to your own figures in the rental income tax calculator.
Non-resident landlords
This is the part most often told wrongly in English. Portuguese property produces Portuguese-source income whoever owns it, and neither article 72 nor the 10% rate imposes any residence condition — a landlord living in London or New York pays the same rate as one living in Lisbon. Two things do differ:
- Aggregation. A non-resident is taxed at the autonomous rates. The option for progressive rates given to EU and EEA residents by article 72(15) covers only the income in article 72(1)(b) and (e) — residential letting sits in article 72(2) and is therefore not covered.
- Filing. The annual Modelo 3 return with Anexo F is mandatory, between 1 April and 30 June, whatever was withheld during the year. The usual filing exemption does not reach rental income.
Non-residents from outside the EU and EEA generally need a fiscal representative. If you are investing from abroad, see accountant for foreigners.
The 2026 change: the 10% rate
Decree-Law 97/2026 of 20 May added article 45-C to the Tax Benefits Statute: an autonomous rate of 10% on rental income from contracts intended exclusively for residential letting whose monthly rent stays within the limit in article 2 of that decree-law — €2,300 a month in 2026, being 2.5 times the statutory minimum wage and updatable by ministerial order. It covers income earned up to 31 December 2029, unless a more favourable rate applies.
- No minimum term and no condition on renewals.
- Where the tenant keeps organised accounts, withholding drops to 10% (article 101(1)(f) of the IRS Code).
- It is a benefit under the Tax Benefits Statute, so article 14 of that Statute applies — notably, no outstanding tax debts.
- Whatever you may read elsewhere, it is not in article 72 of the IRS Code and it did not come from the Budget Act.
Letting to a company
A company cannot itself live anywhere, so letting to one looks at first like a non-residential lease. In binding ruling 30751, approved on 15 September 2026, the Tax Authority accepted the 10% rate on a letting to a single-member company for its managing partner to live in — provided the contract names the occupying individual and their tax number, states the exclusive residential use for that person, and expressly prohibits sub-letting, assignment of the contract and any commercial, industrial or service use. The lease must also be reported on the modelo 2 stamp duty return. Register the property as the company seat, even partly, and the residential purpose is lost: the rate becomes 28%.
Long leases pay less
For permanent-residence leases, article 72(3) to (5) of the IRS Code cuts the rate by duration: 15% from 5 to 10 years, 10% from 10 to 20 years and 5% from 20 years. A further 5 points come off a new contract whose rent is at least 5% below the previous one on the same property (article 72(24)). Where any of these beats the 10% of article 45-C, the lower rate is the one that applies — they are never added together.
What you can deduct
Costs actually incurred and paid to earn the rent come off before the rate (article 41(1) of the IRS Code): conservation and maintenance, condominium fees, IMI, stamp duty on the contract and insurance, rent-guarantee cover included. Conservation works paid in the 24 months before the letting begins count too (article 41(7)). Not deductible: costs of a financial nature — mortgage interest is the one that catches people — depreciation, furniture, appliances, items of comfort or decoration, and AIMI.
Rent receipts
Article 115(5) of the IRS Code gives Category F landlords a choice: issue an official-form electronic rent receipt for every amount received from tenants, including deposits, advances and expense reimbursements; or file an official-form declaration itemising that income by the end of February each year, for the preceding year.
How HVR helps
We handle landlord tax from end to end: choosing between the autonomous rate and aggregation with both scenarios modelled, applying the 10% rate and the duration reductions correctly, deducting the eligible expenses, receipts and Anexo F. For non-residents we bring the tax number, the representation and the filing together in one place. The first call is free — talk to us.
Related guides for landlords
- Rental income tax calculator — compares the four regimes on your own figures
- The legal basis of the rates, article by article
- Property investment tax in Portugal
- Tax calendar for non-residents
Frequently asked questions
What tax do landlords pay on rental income in Portugal in 2026?
Rental income is Category F, taxed at an autonomous rate of 25% on residential letting and 28% on everything else (article 72 of the IRS Code). Since 1 January 2026 residential rents of up to €2,300 a month are taxed at 10% on income earned up to 31 December 2029 (article 45-C of the Tax Benefits Statute). Long permanent-residence leases pay 15%, 10% or 5%. Residents may opt for aggregation at progressive rates instead.
Do non-residents pay the same rate on Portuguese rental income?
Yes. Property in Portugal is taxed in Portugal whoever owns it, and neither article 72 nor the 10% rate of article 45-C imposes any residence condition. What differs is aggregation: a non-resident is taxed at the autonomous rates, and the option for progressive rates in article 72(15) covers only the income in article 72(1)(b) and (e) — which leaves residential letting out. Filing Anexo F with the Modelo 3 return is mandatory regardless of any withholding.
Who qualifies for the 10% rate?
Any landlord, resident or not, whose contract is intended exclusively for residential letting and whose monthly rent stays within the limit in article 2 of Decree-Law 97/2026 — €2,300 in 2026, being 2.5 times the statutory minimum wage, updatable by ministerial order. There is no minimum term and no condition on renewals. Being a benefit under the Tax Benefits Statute, it is also subject to the general rules of article 14 of that Statute, notably having no outstanding tax debts.
Can I let to a company and keep the 10%?
You can, but on conditions the law does not impose for lettings to individuals. In binding ruling 30751, approved on 15 September 2026, the Tax Authority accepted the 10% rate on a letting to a single-member company for its managing partner to live in, provided the contract names the occupying individual and their tax number, states that the property is exclusively for that person to live in, and expressly prohibits sub-letting, assignment of the contract and any commercial, industrial or service use. The lease must also be reported on the modelo 2 stamp duty return. If the property later serves, even partly, as the company seat or place of business, the residential purpose is lost and the 28% rate of article 72(1)(e) applies.
Which expenses can I deduct from rent?
Costs actually incurred and paid to earn or secure the rent (article 41(1) of the IRS Code): conservation and maintenance works, condominium fees, IMI, stamp duty on the contract and insurance, rent-guarantee cover included. Conservation works paid in the 24 months before the letting begins also count (article 41(7)). Not deductible: costs of a financial nature — so mortgage interest is out — depreciation, furniture, appliances, items of comfort or decoration, and AIMI.
Is tax withheld at source on Portuguese rent?
Only where the tenant keeps, or should keep, organised accounts. In that case they withhold 25%, or 10% where the income falls under article 45-C(1) (article 101(1)(e) and (f) of the IRS Code). Withholding is an advance, not a final tax: the real figure is settled in the annual return, after deductible expenses.
Do I have to issue electronic rent receipts?
As a rule yes. Article 115(5) of the IRS Code requires Category F taxpayers either to issue an official-form rent receipt for every amount received from tenants — including deposits and advances — or to file an official-form declaration itemising that income by the end of February each year, for the preceding year.