The Portuguese government, led by Luís Montenegro, has introduced a new category called “moderate rent”. This has attracted a lot of attention because landlords who rent homes for between €400 and €2,300 per month can get tax benefits, such as a lower income tax (IRS) rate — reduced from 25% to 10%.
But how common are these moderate rents? Data from idealista/data shows that 8 out of 10 homes for rent in summer 2025 are priced within this range, especially in Lisbon and Porto, where rental prices are usually higher.
What the new “moderate rent” rules mean
As part of an emergency housing plan, the government replaced the previous affordable rent system with this new moderate rent category, covering properties that cost between €400 and €2,300 per month.
If a landlord rents out a property within this price range and signs a contract for at least three years, they can pay less tax on rental income (IRS reduced from 25% to 10%).
Landlords who build or renovate properties to rent at moderate prices can also benefit from:
- A lower VAT rate of 6%;
- No IMI or AIMI property tax.
However, the upper limit of €2,300 has caused controversy. Many real estate professionals say this amount is too high for most Portuguese people and may even push prices up. The government argues that the €2,300 cap is meant to include high-cost areas, like Lisbon and Porto, so that more landlords can benefit from tax reductions.
Lisbon and Porto lead the market for moderate rents
According to idealista/news, in the third quarter of 2025, there were more than 43,000 homes for rent across 79 municipalities with enough listings to provide a reliable sample. Of these, 81% were priced between €400 and €2,300.
The areas with the most properties in this price range were:
- Lisbon
- Porto
- Cascais
- Vila Nova de Gaia
- Matosinhos
Almost all municipalities analysed had more than half of their rental listings in the moderate rent range, making them eligible for the tax benefits. For example:
- Lisbon: 73% of rental homes
- Porto: 91%
- Vila Nova de Gaia: 89%
- Figueira da Foz: 100%
The only exception is Cascais, where 53% of rental homes are premium properties costing more than €2,300 per month. The remaining 47% are moderate-rent homes. No homes in Cascais were listed below €400 per month.
High-end rentals make up 19% of the market
Homes with rents above €2,300 represent 19% of the total rental market in summer 2025. The highest numbers of these luxury or premium rentals are found in Lisbon, Cascais, Porto, Oeiras and Loulé.
These properties do not qualify for the moderate rent tax benefits. In Lisbon, they make up 27% of the market, while in Porto they represent only 9%.
At the lower end of the market, properties under €400 per month are very limited — less than 1% of all rental homes in Portugal.
The municipalities with the most low-rent properties are:
- Covilhã (15% of local listings)
- Paredes, Vila Real and Bragança (7% each)
In 49 municipalities, including Lisbon and Porto, there are no rental homes priced below €400.
In short:
- Most rental homes in Portugal are priced between €400 and €2,300.
- Landlords in this range can pay less tax.
- High-end homes above €2,300 don’t get tax benefits.
- Low-rent homes under €400 are very rare.
This new system is meant to encourage more rental options at moderate prices — but whether it will help renters or just landlords remains a matter of debate.