Portugal has introduced a new housing package designed to make renting more accessible, and while the public discourse focuses on affordability, there is another dimension many have overlooked: this reform quietly opens one of the most attractive investment windows the Portuguese market has seen in years.
For owners, landlords, and long-term investors, the new framework creates opportunities to restructure portfolios, optimise taxation, and reposition assets in a way that aligns rental yield with fiscal efficiency.
A Shift in Policy With Direct Financial Impact
The reform offers a series of incentives for those willing to position assets under the new moderate rent category. These include significant tax reductions and advantages on both income and reinvestment.
Key benefits include:
- 0% capital gains tax when selling a rental property and reinvesting into a qualifying moderate-rent property.
- VAT reduction to 6% on construction and renovation aligned with this rental regime (until 2029).
- Lower taxation on rental income, reducing from 25% to 10% for rents up to €2,300/month.
- AIMI exemption (Portugal’s additional property tax) for eligible assets.
- New tenant deductions (€900 in 2026, increasing to €1,000 in 2027), improving affordability and occupancy consistency.
This creates a rare combination: reduced acquisition and development costs, favourable tax treatment, and stable long-term rental demand.
Why This Matters for Existing Owners
For property owners currently holding older or non-optimised rental assets, this law may redefine strategy.
A sale that previously implied a significant capital gains tax burden can now be neutral — if reinvested within the programme’s framework.
Example:
A seller with €200,000 in gains would normally owe approximately €56,000 in tax.
Under this new regime, that cost disappears — allowing the full profit to be reinvested.
This shifts the conversation from: “Should I sell?” to “What is the smartest way to reinvest?”
A New Rental Landscape: Regulated, Stable, and Attractive
While short-term rentals (AL) remain restricted in many municipalities, this reform strengthens the long-term rental ecosystem, particularly in areas where demand already exceeds supply: Lisbon, Cascais, Oeiras, Porto, and Algarve coastal hubs.
With rents capped for eligibility, long-term value will now depend on:
- Micro-location demand
- Tenant profile
- Asset condition and amenities
- Energy efficiency and compliance
In many cases, renovating for moderate rent may outperform traditional high-priced rentals, once tax optimisation and reduced operational risk are factored in.
Who Benefits the Most?
This reform is especially relevant for:
✔ Owners wishing to exit older assets with tax efficiency
✔ First-time investors entering the Portuguese market
✔ Expats seeking passive income with favourable taxation
✔ Developers repositioning or renovating existing stock
✔ Individuals building long-term, yield-driven portfolios
Opportunity – Not Urgency
While the law opens an attractive framework, eligibility depends on compliance, licensing, valuation thresholds, and precise documentation.
For that reason, strategy must come before execution.
How Bonte Filipidis Can Support
At Bonte Filipidis, our expertise extends beyond property sourcing, we help clients structure investment decisions strategically.
Our role includes:
- Assessing whether existing assets qualify for tax advantages
- Identifying eligible properties in prime or high-demand areas
- Connecting clients with legal and fiscal partners for compliance
- Structuring long-term portfolio strategies aligned with lifestyle goals
For many of our clients, Portugal is not just a market, it is a chapter in a broader life plan. This reform makes that chapter more accessible, more efficient, and more advantageous when approached with the right insight.
