The lease market in Portugal is preparing to receive new rules, with significant changes. The government will present a set of measures aimed at flexing contractual rules, accelerating eviction processes and reviewing lace update limits, in an attempt to streamline a sector marked by housing scarcity and the sharp climb of prices.
According to the Express newspaper, these changes seek to increase owners’ confidence and stimulate private housing investment.
End of the 2% limit in income
One of the most relevant changes will be the end of the 2% brake that limited the update of income in new contracts celebrated on properties already leased in the previous five years.
So far, the law provided that, in contracts entered into after this condition, income could only be updated up to 2% of the value previously practiced, a measure implemented in 2023 within the most housing program.
The new diploma will allow greater freedom in setting rents, especially in high demands, with the objective of attracting more properties to the formal market and encouraging the construction of new housing for lease.
The legal change meets the need to streamline the market. It is also expected to simplify the eviction processes in case of contractual failure. Currently, eviction procedures are considered bureaucratic and time consuming, which discourages owners.
With the new law, it will be possible to intervene more quickly in extended delay situations or non -payment of income, reinforcing the confidence of those who invest in lease, without compromising the rights of lessons, as provided for in current legislation.
Context of previous reforms
These changes arise following recent legislative revisions. In 2023, measures were introduced such as the coercive lease and the brake to the rents, framed in the most housing program, which were later partially adjusted under the construction program.
The government now intends to consolidate the legislation and create a more effective framework to balance supply and search in the lease market.
In addition to changing the law, the plan includes tax incentives for the construction of accessible housing and financing programs with support from the European Investment Bank. The intention is to create more attractive conditions for private investment in the sector and increase the availability of real estate at sustainable prices.
The structural effects of these measures should only be felt in the medium and long term, but the immediate priority falls on the flexibility of lease to make more properties available and reduce pressure on prices.
Annual income update
Despite the end of the 2%brake, the annual update of income is maintained based on the inflation coefficient calculated by the National Institute of Statistics.
For 2026, it is expected that the update can reach up to 2.24%, a value calculated based on the annual average consumer price index, excluding housing.
In recent years, lease prices have registered significant increases, with the median incomes rising 10% in 2025 compared to the previous year and more than 70% in the last five years, making access to housing more difficult, especially in metropolitan areas.
Expected impact
The flexibility of the law should change the dynamics of the market. For owners, more predictability and incentive is expected to make real estate available; For tenants, access to more options, although with the possibility of increases in some segments.
According to the success of the reform will depend on the balance between lease protection and investors’ confidence, and it is fundamental for changes to produce sustainable effects in the sector.
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