The gross profitability of purchasing a house in Portugal for rent stood at 6.9% in the third quarter of 2025. The value represents a slight decrease compared to the previous year, but continues to be attractive for those looking for income in the real estate market. According to Notícias ao Minuto, the data was released by the idealista portal, which analyzed the average return on investment in homes and other assets such as offices, stores and garages.
According to idealista, housing profitability fell 0.3 percentage points compared to the same period in 2024, when it stood at 7.2%, and 0.5 points compared to 2023. Despite this decline, the return remains 0.4 percentage points above that recorded in 2020, which confirms the resilience of the sector, even in a context of high interest rates and a pressured rental market.
The most profitable cities to rent
In the analysis by district capitals and autonomous regions, there are two cities that clearly stand out: Castelo Branco and Bragança. According to the publication, Castelo Branco leads the ranking with a gross profitability of 9%, followed by Bragança with 8%. Close behind are Santarém (7.1%), Coimbra (6.7%), Leiria (6.5%), Viseu (5.9%) and Évora (5.8%).
At the top of the least profitable regions are Lisbon (4.6%) and Funchal (4.8%), where purchase prices continue to grow faster than rents. According to Notícias ao Minuto, this difference causes investors to look for alternative markets in the interior of the country, where the acquisition cost is lower and the return, proportionally, higher.
Investment in stores, offices and garages
idealista also analyzed other real estate segments and concluded that investment in stores and offices currently presents the highest average returns in the Portuguese market. Shops recorded 8.1%, offices 8% and garages 5.2%.
The platform explains that the methodology used consists of dividing the sales price by the average announced rental value, thus obtaining the gross percentage of profitability for each type of asset.
These indicators, says Notícias ao Minuto, are an important reference for investors who want to evaluate opportunities before buying properties for income.
Tax incentives and new government measures
The fiscal situation is also influencing investment decisions. The Portuguese Association of Real Estate Developers and Investors (APPII) recently welcomed the Government’s decision to reduce VAT to 6% on the construction and rehabilitation of properties intended for housing or rental for up to 2,300 euros per month.
According to the same association, this measure, announced by Luís Montenegro, applies to constructions up to 648,000 euros and is in force until 2029, covering both properties for sale and for rent. According to Notícias ao Minuto, APPII considers this reduction an important step to mitigate the housing shortage and stimulate private investment in the sector.
An adapting market
Despite the slight decline in overall profitability, real estate investment continues to be seen as one of the safest options in Portugal. The stability of the rental market, combined with the growing demand for housing, has guaranteed consistent returns for investors who invest in less saturated locations.
As highlighted by , the challenge now involves balancing profitability with housing accessibility. And, for those looking to invest, the numbers show that there is life and profit beyond Lisbon and Porto.
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