Landlords with housing rental contracts of up to 2,300 euros per month may pay less IRS on rent, as soon as the new housing tax package is published in the Diário da República. The measure has already been promulgated by the President of the Republic, António José Seguro, and provides for a reduction in the rate applicable to property income from 25% to 10%.
According to , the change is part of the Government’s tax relief package to try to increase the supply of homes on the rental market. The idea is to alleviate the tax burden on owners whose incomes are considered moderate, making it more attractive to make properties available for housing.
Rentals of up to 2,300 euros come under the new regime
The cut in IR should apply to housing rental contracts with rents of up to 2,300 euros per month. This value corresponds to the limit defined in the tax package for the concept of moderate income. In practice, covered owners see autonomous taxation on real estate income fall from 25% to 10%.
The difference can be significant. According to calculations released by SIC Notícias, with a monthly income of 1,000 euros, the owner would go from a net income of 750 euros to 900 euros. This represents an additional 150 euros per month, or 1,800 euros per year.
What remains to come into force
Despite the promulgation, the measure is not yet fully in force. The diploma is yet to be published in the Official Gazette, a moment that will allow confirmation of the date of entry into force, the final requirements and possible transition rules.
Until then, landlords must wait for the official wording to see if current contracts are covered, when the new rate applies and what conditions they will have to comply with.
May have effects from January
One of the most relevant doubts is the possible production of retroactive effects. According to information published in the economic press, the drop in the IR rate on income of up to 2,300 euros could take effect from January 1, 2026. If this is confirmed, property income obtained since the beginning of the year could benefit from the new rate, as long as they meet the criteria defined in the final diploma. Even so, confirmation will only be finalized with publication in the Official Gazette.
The Executive’s objective is to increase the supply of homes on the rental market. In a context of high rents and difficult access to housing, the Government seeks to make rental housing more attractive for owners. The tax reduction can increase the net income of owners without forcing, at least directly, an increase in the rent paid by tenants.
The expectation is that more owners will put properties on the market or maintain housing contracts within limits considered moderate.
Other measures in the housing package
The IRS reduction in rents is just one of the measures in the housing tax package. It is also planned to reduce VAT from 23% to 6% on the construction of houses intended for sale or rent at moderate prices. In the case of sales, the limit indicated is around R$660 thousand; In rent, the ceiling is R$2,300 per month.
The package also includes the exclusion from taxation of capital gains obtained from the sale of residential properties, when there is reinvestment in new properties intended for rental.
Another measure involves increasing the IRS income deduction limit up to 1,000 euros and applying an IMT rate of 7.5% to non-resident citizens when purchasing housing.
How did you get here
The enactment comes several months after the Government announced the fiscal component of the housing package. The request for legislative authorization was submitted to Parliament in December and was approved in February, with favorable votes from PSD, CDS and IL, and Chega’s abstention. Legislative authorization was also promulgated by the former President of the Republic, Marcelo Rebelo de Sousa, and published in March.
However, the decree-law that implements the tax measures was missing. This diploma has now received the green light from the President of the Republic, remaining dependent on official publication.
Construction also awaits changes
The delay in publishing the new rules has been pointed out by the construction sector as one of the factors that hindered investment decisions and licensing requests.
Data from the Association of Civil Construction and Public Works Industries, mentioned in the original news, indicate that licenses for construction and housing rehabilitation projects fell 16% in the first two months of 2026 compared to the same period of the previous year.
In parallel, another decree-law linked to simplifying the licensing of new homes continues to be analyzed, including the possibility of starting works eight days after prior communication, under certain conditions.
What should landlords do
For owners, the essential point will be to confirm whether the contract meets the criteria of the new regime. The value of the rent will be decisive, but it should not be the only relevant element. The housing purpose, the framework of the contract, the effective date and the way in which income is declared in the IRS can also have an impact.
Until publication in the Official Gazette, the most prudent thing is to wait for the final draft of the diploma and, if necessary, confirm the situation with a certified public accountant or through the Finance Portal.
In the end, many property owners could benefit from a significant cut in income tax. But the drop will not be automatic for everyone: it should only apply to housing contracts that respect the limit and conditions set out in the new housing tax package.
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