Portugal tightens rental rules and eases rent controls

Portugal’s government has approved changes to the urban rental regime that tighten the rules for tenants in arrears and bring forward the end of rent controls on new contracts by three years, in a move it says is meant to strengthen confidence in the market and increase the supply of homes for rent.

Under the package approved by the Council of Ministers on Thursday, landlords will be able to terminate a lease after two months of unpaid rent, down from three months. Repeated delays will also trigger stricter consequences, with more than three late payments in one year or four in 18 months becoming grounds to end a contract. The government also said eviction procedures will be streamlined by removing what it sees as redundant administrative steps and combining decisions on vacating a property and paying overdue rent into a single process.

The measures also make the entry terms for tenants more demanding. The cap on advance rent rises to three months, from two, while the previous ceiling on security deposits is removed. Lease duration will remain between a minimum of one year and a maximum of 30 years, but landlords will be allowed to block automatic renewal from the first renewal cycle if they meet notice deadlines, instead of only after three years under the previous regime.

Housing Minister Miguel Pinto Luz said the changes are part of “essential transformations to increase market confidence”. He also said the government was “bringing forward the end of rent controls by three years”, allowing rents in new contracts to be freely agreed earlier than under the previous framework, which had capped increases by linking them to the previous contract until the end of 2029.

The package also keeps a public guarantee for rent payments in specific stages of disputes and extends it to cases suspended because of legal aid requests. For older contracts, the new rules differentiate by age and household income, preserving temporary protections for younger lower-income tenants and stronger safeguards for tenants over 65, while allowing some rent updates for higher-income households. The measures now move into the legislative process.

Originally published at Eco.pt