Taxes on renting out
Income tax on rent: Category F, the reduced rates, the return, the receipts and short-term letting.
Categoria F (rental income tax)
The income-tax category for rent. In 2026 four regimes compete, and the most favourable always applies.
Base: 25% on housing, 28% on non-residential. Reductions by lease length: −10 points from 5 years (+2 per renewal, up to 10), −15 from 10 years, −20 from 20 years; +5 if the rent is at least 5% below the previous lease. Floor: 5%.
Moderate rent (≤ €2,300/month on the mainland): 10%, no minimum length, until 2029. RSAA: full exemption, rent limits pending regulation.
Deductible: IMI, building fees, fire insurance, lease stamp duty, maintenance works, agency fees, management, energy certificate. Not deductible: mortgage interest, principal, furniture, structural works, AIMI. If expenses exceed rent, the loss carries forward to the next six years (art. 55 of the IRS code).
Renda moderada (moderate rent)
Rent up to 2.5 × the minimum wage. €2,300/month in 2026 on the mainland. Unlocks the 10% tax rate.
Defined in Decree-Law 97/2026. Measured as annual value divided by months elapsed, and it includes furniture and services even if contracted separately.
On the islands it's unconfirmed whether the regional minimum wage applies (€2,415 Azores, €2,450 Madeira).
RSAA (affordable rental regime)
Full income-tax exemption for affordable leases, in force since 1 September 2026. Rent limits still pending regulation.
No expiry (the 10% rate expires in 2029). Rent limit by layout, based on 80% of the INE median per municipality, adjusted for energy rating and parking. Minimum 3 years.
Trap: exempt income is still counted to set the rate on your other income. Filing with IHRU by 15 January of the following year.
Status at the last check, October 2026: regulation unpublished, IHRU platform inactive. We flag eligibility, we don't compute the number.
Anexo F (rental income return)
The annex of the Portuguese tax return where rent and deductible expenses are declared, per property.
Filed between April and June. Per property: gross rent, expenses by category, withholdings.
Landlords who issue electronic rent receipts on Portal das Finanças see part of it pre-filled.
Electronic rent receipt
The receipt issued on Portal das Finanças for each rent payment. It pre-fills the landlord's tax return.
Mandatory, save for taxpayers without access to electronic means or who choose to issue invoices instead.
It is what lets the tenant deduct 15% of the rent on their own return, up to the annual cap, and the reason an unreported lease almost always surfaces.
Alojamento local (short-term letting)
Providing temporary accommodation. Taxed under business income, with mandatory registration and municipal rules.
Registration is through the single electronic desk and depends on the council. In absolute containment zones no new registrations are granted; in relative ones, authorisation is required.
For tax, a coefficient is applied to gross income (0.35 normally, 0.50 in a containment zone) and social security contributions are due.
Containment zone (short-term rentals)
Areas where short-term rental registrations exceed 5% (relative) or 10% (absolute) of homes. In Lisbon it's decided at neighbourhood level.
Absolute containment: no new registrations. Relative: council authorisation within 90 days. In both, selling an apartment automatically cancels the licence. Buying 'with an AL licence' in Alfama means buying without one.
A parish-level check isn't enough: Campo de Ourique, Penha de França, Belém and Ajuda contain classified neighbourhoods; Alcântara is in absolute containment because of riverside areas.
Tax: coefficient 0.35 in the simplified regime, 0.50 in containment zones, 0.15 for hostels.
The other groups
General information based on current legislation. Not tax or legal advice.