Announced by the Minister of Infrastructure and Housing, Miguel Pinto Luz, the new measures introduce significant changes affecting everything from the signing of new contracts and eviction mechanisms for non-compliance to the adjustment of pre-1990 rents.
Regarding new lease agreements, the key change is the early repeal of the 2% cap that limited rent increases when transitioning to new tenancies. This rule, introduced by the previous Socialist administration and originally set to remain in effect until 2029, is being eliminated three years early, thereby restoring the parties' freedom to mutually agree on market rates.
Initial financial guarantees
Additionally, rules regarding initial financial guarantees have been revised to strengthen landlord protection: landlords may now require up to three months' rent in advance (up from two), and the legal ceiling on security deposits—previously pegged to the equivalent of two months' rent—has been removed.
While contract duration limits (ranging from one to 30 years) remain in place, landlords now have greater flexibility to refuse automatic contract renewals, provided they give prior notice.
Procedures for contract termination due to financial default have also been streamlined.
Eviction proceedings
The timeframe for initiating eviction proceedings for rent arrears has been reduced from 3 to 2 months. The new framework also provides for eviction in cases of repeated default, triggered when a payment delay of eight days or more occurs more than three times (consecutively or intermittently) within a 12-month period, or more than four times within an 18-month period. As a social safeguard for vulnerable households facing the loss of their homes, the government will establish a Housing Emergency Fund.
Managed by the Institute for Housing and Urban Rehabilitation (IHRU) and funded by the State Budget, this mechanism will provide financial support for housing or rehousing based on the Social Support Index (IAS)—set at €537.13—up to a monthly cap of €2,300 for a continuous period of six months. The reform also addresses the transition of historic lease agreements (dating from before 1990) to the New Urban Lease Regime (NRAU), applying differentiated criteria based on households' age and income.
For tenants under the age of 65 with a gross annual income below €64,400, the rent is safeguarded for a transitional period of five years; however, if income exceeds this threshold, the rent may be adjusted immediately to the equivalent of 1/15 of the property's Taxable Asset Value (VPT). For tenants over the age of 65, a definitive transition to the NRAU is prohibited; however, if the household's annual income exceeds €64,400, the landlord may update the rent to the same ratio of 1/15 of the VPT.
The legislative package, resulting from rounds of negotiation with parliamentary political forces, will now be submitted to the Assembly of the Republic for consideration and a vote.
Concurrently, within the same framework of housing-related measures, Parliament has scheduled the final vote for 17 July on a related bill aimed at simplifying the utilization of existing building stock; this measure would enable a single heir to initiate legal proceedings for the sale of real estate assets belonging to undivided estates—properties that have remained undistributed for over two years due to disputes or a lack of family consensus.
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These new laws will only exacerbate the housing crisis, as they only strengthen the rights of landlords.
By Tom from Lisbon on 10 Jul 2026, 19:30
It is quite obvious the Law only harms people's housing rights, it is wild capitalism with the right. Keep voting in them and you will witness a disgrace.
By Diogo F. from Madeira on 11 Jul 2026, 00:44
How does allowing the landlords to have no cap on rental increases on a new contract improve conditions for renters, pray tell? This seems counter productive. Rents will surely increase. Less protection for renters ONLY helps landlords.
By Debra Custer from Lisbon on 11 Jul 2026, 06:09
The housing crisis has been made worse by persistent government interference. No-one will want to become or remain a landlord unless they can charge a fair market rent (and can increase it when necessary) and obtain vacant possession of their property whenever required. Landlords shouldn't be expected to act like a charity, providing accommodation at bargain basement rates. Go tell an electrician or plumber to work for €2 per hour! We all want to pay less for life's essentials, but expecting high quality rentals at dirt cheap rents just doesn't add up, no matter how much politicians bang on about it.
By Billy Bissett from Porto on 11 Jul 2026, 10:17
This is the world we sadly live in ...a world where greed and profit have become more important than people.
It's mind-boggling that every basic human need has officially been turned into a commodity. Water. Food. Healthcare. And now, shelter.
Housing is a fundamental human need, not a luxury. Yet homes are increasingly treated as investment assets, driving prices beyond what many ordinary people can afford and leaving renters to absorb the rising costs.
If someone can't afford a home without relying on renters to cover the mortgage and other expenses, then perhaps they can't truly afford that investment. It isn't a renter's responsibility to finance someone else's asset or wealth. People rent because they need a place to live not because they should be expected to make someone else's investment profitable.
Somewhere along the way, we've accepted the idea that one person's basic need for shelter should be another person's opportunity to maximize profit. I don't believe that's the kind of society we should aspire to build. What happened to humanity!?
By Monica from Algarve on 11 Jul 2026, 12:03
I agree that landlords should be able to charge a fair rent. BUT many of them are greedy and downright shady. I know of instances where people are entering into rental agreements which are very biased on the side of the landlord. People are SO desperate to find a place to live that they sign these contracts. The contracts state that if anything breaks, the tenant must fix it. I know one case where a lady had problems with the toilet and it caused the bathroom cabinet (made of chipboard) to have to be replaced. She is paying a high rent, so to fix the bathroom at more than 700 Eur was, in my opinion, unfair. I am told these types of rental agreements are quite common.
By L from Lisbon on 11 Jul 2026, 12:08
Must agree with the previous comment (BB)!
Why would I spend a fortune on renovation of 3 derelict houses on my urban farm, (and substantially increase house supply in the village), if I am going to be subject to abusive renters deliberately planning to avoid rental payments, missing utility payments and then refusing payments for 3-6 months before finally moving out. From experience, doing that, leaving a mess and in almost every case large repair bills for broken appliances, windows and doors!
No thanks!
Remembering that bank finance to renovate will cost 4-6% per year, then any landlord will expect at least a 10-12% profit per year to make it worth the effort, the vacancy periods and the repairs and maintenance on the home. The renter does not take any risk of bank foreclosures for non-payment of mortgages, maintenance, repairs, repainting or any other bills, and the past regime actually encouraged defaults and abuses by occupants, stifling investment into housing, hence the situation today.
By Tony Williams from Beiras on 11 Jul 2026, 12:58
To Billy: seeing that housing is more expensive than in countries with stricter regulations, what sense does your comment make? Landlords aren't being forced to work for 2€ an hour. They don't work at all. Is labor more expensive in Portugal than in Spain? The answer is no, yet Spanish housing is cheaper.
By Miguel Alejandro Laurito from Lisbon on 11 Jul 2026, 17:48
This. Eases. Nothing.
Just creates more AL/AirBnB
By Shawn from Lisbon on 11 Jul 2026, 20:32
This mess is all due to government meddling with prices in the past. Why would landlords want to procure more housing and grow their businesses if they can't get a fair return due to government coercion? The housing market only expands when people are free to grow their businesses and add new developments and therefore lower rents due to the extra supply. Telling a business sector that it cannot abide by market rules is tantamount to destroying the market. The other problem is the internationalization of the housing market in Portugal as a result of too many immigrants and too much exorbitant foreign wealth pouring in. Again, this is the result of government foolhardiness. Portugal never had a housing shortage prior to joining the EU and joining the cult of migration that is now Europe's official religion.
By Tony from USA on 11 Jul 2026, 22:31
We live and work in a capitalist system; money goes where investors want it to go.
If there is a housing shortage, and we want more housing to be available, we need investors to invest.
This constant drumming about the evils of greed is not conducive to solving anything. Yes, humans are greedy; that's why capitalism is so successful.
Of course there has to be rules, checks and balances, protection of rights. However, when those rules are out of balance, investment goes somewhere else.
There are trillions of Euros invested in anything that is considered safe and will return even a modest return.
Home rentals are not in that category. The rules need to be tweaked so that they are.
Or, if capitalists are excluded, the government should build homes for the needy.
That always works just great.
By mark Holden from Algarve on 12 Jul 2026, 11:05
Wow! Talk about a misleading headline for an article. The article lays out the numerous ways renters will be negatively affected: Higher rent increases, weaker contracts, fewer rights. Conversely, landlords will gain more leverage to profit and exploit tenants. How does this “ease the housing crisis?” Rentals are already in short supply and insanely high in most locales in Portugal. Unscrupulous landlords are already exploiting this crisis by keeping rents high and conditions difficult for tenants. Are there bad tenants who try to game the system and are dishonest? Absolutely! Are there some very honest and ethical landlords? Absolutely! But, very few people would disagree that the rental situation in most of Portugal, especially in the big cities, is at a crisis point. Not because landlords are being exploited and treated unfairly, but because of lack of supply, lack of effective rent controls, greed and desperation.
The comments to this article predictably have its right wing, neo-liberal cheerleaders bemoaning the unfair treatment of the poor abused, mistreated landlords in this country. Do landlords deserve rights? Absolutely. Being able to better respond to bad tenants is important and changes in laws in that area are good. Increasing available building stock is also good to address a shortage. But, affordable housing should be a right in a civilised and humane society. Present conditions are not great and need serious reform, not merely putting more pressure on tenants.
By Jeff from Porto on 12 Jul 2026, 14:38