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16/07/2026

What’s changing in Portugal’s rental market with the “Construir Portugal” reform

On July 9, 2026, Portugal's Council of Ministers approved a sweeping reform of rental regulations. The bill now moves to Parliament and is not yet in force, but its main lines are already known and they have a direct impact on anyone who owns or manages leased property in Lisbon. More freedom in new leases. The cap that kept new rents from rising beyond a fixed coefficient relative to the previous contract is being lifted ahead of schedule. In new leases, landlords and tenants will be free to negotiate the rent amount directly. Limits on advance rent payments are also increasing, and the cap on security deposits is being removed. Faster evictions for non-payment. The grace period allowing a landlord to terminate a lease for non-payment drops from three months to two, and three late payments within 12 months (instead of four) will now be enough to justify termination. The court process is also being streamlined.

Pre-1990 leases: the most significant change. The transition of these older contracts into the current legal framework (NRAU) will now depend on both the tenant’s age and household income, using €64,400/year as the reference threshold:

  • Tenants under 65 with income below the threshold move into the NRAU framework, but the old rent stays unchanged for 5 years.
  • Tenants 65 or older with income below the threshold remain fully protected, with no time limit, the reform doesn’t change this situation.
  • Tenants 65 or older with income above the threshold can now have their rent updated up to 1/15 of the property’s Tax Registered Value (VPT), even without transitioning into the NRAU.

It’s this last scenario, older tenants with high incomes, holding old contracts at symbolic rents, that the reform effectively unlocks, offering relief to landlords who continue to cover property tax (IMI) and maintenance at market prices.

A safety net on the other side. A new Housing Emergency Fund is being created, guaranteeing relocation support (up to €2,300/month for 6 months) for tenants evicted due to involuntary non-payment or who are victims of domestic violence.

The reform still needs to be voted on in detail and signed into law before taking effect, and tenant associations have already raised concerns about the balance struck by the new rules. We’ll continue to follow how this process develops.