Terminating a rental agreement in Portugal is a right of both tenants and landlords, but it requires compliance with precise legal rules, from notice periods to the correct way to communicate the intention to leave.
What is a lease termination?
A lease agreement is the legal document that binds two parties, the tenant and the landlord, regarding the use of a property, defining rights, duties, and terms.
Although the contract establishes a duration, either party may terminate it early, provided they respect the rules established by law. The termination must be communicated in writing, with the minimum legally required notice period, and within the appropriate formalities. There are two basic rules for any termination of a lease agreement :
- Written notice via registered letter with return receipt requested
- Compliance with the notice period according to the contract duration, in accordance with articles 1,097 and 1,098 of the New Urban Lease Regime (NRAU)
Valid reasons for terminating the contract
As a tenant, you are not required to justify your decision to terminate the contract. It is sufficient that you communicate your intention within the legal timeframe and that at least 1/3 of the initial contract duration has already elapsed.
If the landlord has already communicated that they do not intend to renew, you can also terminate the contract at any time, with 30 days' notice. However, if you are the landlord, you can only terminate the contract based on reasons expressly provided for by law. These are:
- Need for housing for oneself or for a first-degree descendant (children)
- Structural rehabilitation works that require the occupants to vacate the property
- equivalent to at least 25% of its patrimonial value, or intended to avoid the demolition of the property
- Failure to pay rent for a period exceeding three months may initiate eviction proceedings.
Notice periods in 2026
Legal deadlines vary depending on the contract's duration and the position of the party terminating it. The countdown begins on the date the letter is received by the recipient, not the date it was sent.
If, as a tenant, you fail to meet the notice period, the contract terminates anyway, but you are obligated to pay the rent corresponding to the period of the missed notice. In the case of landlords, the notice periods are significantly longer. In fact, in lease agreements with an indefinite duration, the minimum notice required from the landlord is 3 years.
How do I write a resignation letter?
A lease termination letter must be clear, objective, and legally valid. These are the mandatory elements to include:
- Date the communication was sent
- Full identification of both parties (with the full names of the tenant and the landlord)
- Explicit indication that this is a contract termination letter, with reference to the fulfilment of the legal deadline
- Address of the property that is the subject of the contract
- Reason for termination (mandatory for landlord; optional for tenant)
- Expected date of vacating the property
Whether you are a tenant or the property owner, you should keep a copy of the written letter, as well as proof of registered mailing. These documents can be crucial evidence in a case of litigation.
New developments in 2026: what will change in the rental market?
The 2026 legislative update introduced relevant changes for landlords and tenants:
- New rent adjustment formula, impacting existing contracts
- Extension of the minimum terms for residential lease agreements
- Strengthening reporting obligations to the Tax and Customs Authority
Properties that have been vacant for more than 24 months can be integrated into the Affordable Housing Scheme by administrative decision, with rent set below market value and a minimum contract of 5 years.
In cases where the tenant refuses to leave after the contract ends, eviction may take longer when minors, the elderly, or people in situations of economic vulnerability are involved.
Affordable Housing Program (PAA): what to know
The Affordable Housing Program remains in effect in 2026 and may be an alternative to consider before terminating a lease.
- This scheme allows landlords to rent properties at rents at least 20% below market value, benefiting from exemption from personal income tax (IRS) or corporate income tax (IRC).
- Tenants, in turn, have access to housing with a more balanced affordability ratio, through stable contracts registered on the Tax Authority's website.
If you're considering moving out of your home, it's worth understanding if this programme could be an interim solution. In some cases, instead of terminating your lease, you might be able to renegotiate or look for a property within this scheme, reducing your monthly expenses.
What other support is available in the country?
Before making a final decision, other support measures in 2026 can help alleviate the burden of income :
- Lisbon: The Municipal Subsidy for Affordable Housing (SMAA) enters its 8th edition, with a minimum income of €6,000 to access the support. The monthly rent payment for beneficiaries of this edition will be renewed for 12 months, from March 2026 to February 2027.
- Extraordinary Income Support: allows families with the highest income burden to receive up to €200 per month until the end of 2026.
- Madeira: the PRAHABITAR program remains available throughout the year, with renewable financial support for tenants.
Before terminating your lease, carefully evaluate all available rental support options, especially if you are a tenant, as you may be eligible for assistance. In some cases, this will prevent you from having to move and also ensure greater financial stability.
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