The Ground Has Shifted Twice: What Portugal’s 2024–2026 Housing Laws Mean If You’re Moving Now
Current as of June 2026. Portuguese housing law is moving quickly — confirm specifics for your target municipality before acting.
If you’ve been reading about Portugal’s housing laws and other relocation content for the past two years, some of what you found is now out of date — not because anyone misled you, but because the law has moved three times in three years. It’s enough to give you whiplash and can prove confusing to anyone who is not already here in country.
Here’s the accurate version with the latest information that I use to counsel my clients.
Why the story keeps changing
In October 2023, the previous government passed a sweeping package called Mais Habitação (Law 56/2023): a freeze on new short-term rental licenses, special taxes on holiday rentals, even the threat of forced leasing of empty homes.
Then the government changed. The Construir Portugal strategy spent 2024 reversing much of it — and 2025–2026 building something quite different in its place: a large fiscal package designed to coax housing back onto the market through incentives rather than penalties. That package, Lei 9-A/2026 and Decreto-Lei 97/2026 (published 20 May 2026), is now in force and retroactive to 1 January 2026.
So you’re not navigating one reform. You’re navigating a reversal layered on top of a reform — with a third wave still moving through Parliament. The single biggest risk in relocating right now isn’t any individual rule; it’s acting on a rule that’s already a cycle out of date. Let’s get you up to speed
If you’re buying
Short-term rental (Alojamento Local) licenses are workable again. Decree-Law 76/2024 reversed the harshest Mais Habitação provisions: licenses no longer expire after five years, new apartment registrations are allowed again across most of the country, and — critically — licenses are once again transferable when a property is sold. Under the old rule, you could buy an income-producing property and find the rental permit didn’t come with it. That trap is largely closed.
But “largely” doesn’t mean absolutely. Decree-Law 76/2024 handed licensing power back to municipalities, and they’ve used it very differently. Lisbon’s December 2025 regulation puts much of the historic center under “absolute containment” — no new AL where short-term rentals already exceed 10% of housing — and in those zones a license can actually expire when the property is sold. Lisbon also canceled roughly 6,765 licenses in early 2026. Porto runs its own thresholds. Coimbra has its own profile. The headline is national; the reality varies parish to parish.
The relief that may actually be yours. You’ll read a lot about the under-35 exemption from IMT and stamp duty (full exemption on a first home up to €330,539 in 2026). It’s real — and it’s almost certainly not for you, because it caps at 35. Most of my clients are past that age demographic. However, if you do fall into this category, it is a fantastic incentive to purchase.
Here’s what does reach you. The 2026 package created a new capital-gains exemption that, for the first time, isn’t limited to your primary residence: if you sell a property — including a second home or an inherited one — and reinvest the proceeds into a property you then let at “moderate rent” (capped around €2,300/month in 2026), you can exclude the gain from your IRS liability. The conditions are exacting: you reinvest the net proceeds, a lease must begin within six months, and the property must stay rented at least 36 months within the first five years, or the tax comes back. This is a genuine planning tool for an entrepreneur or investor building Portuguese rental income — and a potential trap for anyone who misses a deadline..
If you’re renting
The rental market has tilted back toward normalcy on the supply side. The forced-leasing-of-empty-homes idea was scrapped early, and the 2026 package now rewards landlords for offering longer, moderate-rent leases: autonomous taxation on qualifying rental income drops from 25% toward 10% (and as low as 5% for very long leases), with full IRS/IRC exemption for rents roughly 20% below the municipal median under the new affordable-rent regime.
For you as a tenant, two practical things matter most. First, the tenant IRS deduction for rent rises to €900 in 2026 and €1,000 in 2027 — but only if your lease is registered with the tax authority (Portal das Finanças). Since August 2025, you as the tenant can register it yourself if your landlord hasn’t. Second, the law isn’t the hard part; the practice is — guarantors (fiadores), several months upfront, and income-proof expectations that don’t map neatly onto a dollar-denominated pension. None of that is designed to exploit you, but walking in unaware can make it feel that way. The protection is a properly drafted, registered contract you understand before you sign.
What’s still in motion — and why I’m flagging it carefully
There’s a third wave of changes that has not yet become law. In March 2026 the government approved, in principle, a further reform package and sent it to Parliament. It is proposed, contested, and not yet settled — and the difference between “the government announced” and “this is the law” is precisely the difference that costs people money when a blog fails to properly explain. Two pieces of the proposed legislation matter to you.
Faster evictions for non-payment. The package would accelerate judicial eviction decisions in cases of repeated non-payment of rent, paired with quicker resolution of undivided inheritances (heranças indivisas) and a housing emergency fund for vulnerable tenants. The stated goal is to restore landlord confidence and bring shuttered units back to market.
The end of the 2% cap on new contracts — the one renters should watch most closely. This is the change with the sharpest edge. One of the most significant proposed measures is the removal of the 2% limit that capped rent increases on new contracts. Until now, when a landlord signed a new contract for a property that had been rented within the previous five years, the rent could only rise 2% above the prior rent. Introduced in 2023 under Mais Habitação, the cap was controversial among landlords and investors, who viewed it as a disincentive to put properties on the market — and many cited it as a reason they pulled homes off the long-term market entirely or shifted to short-term lets. If it’s removed, a landlord will be able to set the rent on a new contract freely, at whatever the market will bear.
I’ll be direct about why this concerns me. Portugal’s rental market is already overheated — rents rose roughly 10% in the past year alone, and more than 70% over five years, far outpacing wages. The 2% cap was a brake on that. Remove the brake in a market climbing this fast, and the most likely near-term outcome in high-demand cities like Lisbon, Porto, and increasingly Coimbra is that asking rents on new contracts jump to full market rate the moment a unit turns over. The government’s argument is that freeing up pricing will draw more supply onto the market, and that may prove true over time. But for an American arriving now as well as for Portuguese born people already struggling, the near-term reality is the one that could prove painful. When signing a new contract in a tight market, you may be entering a rental environment with one fewer guardrail than the blog you read last year described. Tenant associations have raised exactly this alarm.
None of this is a reason to abandon your plans. It’s a reason to time it, budget it, and negotiate it with current eyes — and to know which protections still apply to your situation versus which are being removed.
What this means for you, specifically
The throughline: Portugal didn’t make housing simpler — it made it more local, more incentive-driven, and more in flux. The national headlines reversed; the municipal rules multiplied; the tax code rewrote itself mid-stream; and a further reform is moving through Parliament as you read this. From a laptop in Atlanta or Houston, that’s genuinely hard to read, because the answer that’s true in one parish is false three streets over, and the relief that saves one client disqualifies another.
That’s not meant to frighten you. It’s meant to do the opposite. It is meant to inform you so you are armed with the latest correct information. As someone who practices real estate here in Portugal with a U.S. broker’s eye, I am able to read the law and apply it to your specific situation while helping you to differentiate between what’s settled and what’s still just a proposal. You don’t lose your footing — or your sense of where you belong — when you ask the right person the right question early. That’s the benefit of doing this with a trusted professional instead of a search bar.
If you want to know exactly which of these rules affects your plan — your budget, your city, your timeline — that’s what a Clarity Session is for. One focused conversation, and you’ll know where you actually stand.
Informational, not legal or tax advice
