20 May 2026 · 3 min read
A 10% rate on residential letting
Residential rents within the moderate limit are taxed at 10% instead of 25%, for income earned up to the end of 2029.
By ATLANTIC’s property tax team
Rental income from residential letting is taxed at an autonomous rate of 10%, in place of the general 25%, where the monthly rent does not exceed the moderate limit — currently €2,300 a month.
The measure was introduced by the housing package of May 2026, which added a new article to the Estatuto dos Benefícios Fiscais. The limit is not a fixed figure in the law: it is set at two and a half times the national minimum monthly wage for 2026, which produces the €2,300 in practice and will move when the minimum wage does.
Withholding at source follows the same rate. Where tax is withheld on this income, it is withheld at 10% rather than at the general rate.
The reductions tied to the length of the contract remain in the Income Tax Code alongside this: 25% for contracts under five years, 15% from five to ten, 10% from ten to twenty, and 5% above twenty years. A landlord is not obliged to take the new rate if an existing regime produces a better result, and the law preserves the option to apply whichever is more favourable.
Two conditions do the work. The letting must be residential, and the contract and receipts must be properly communicated through the Portal das Finanças. A reduced rate on a contract that was never reported is not a reduced rate.
The benefit applies to income earned up to 31 December 2029.
Key takeaways
- 10% instead of 25% on residential rents within the moderate limit, currently €2,300 a month.
- Withholding at source drops to the same 10%.
- The duration-based reductions remain, and the more favourable regime may be chosen.
Source: Decreto-Lei n.º 97/2026, de 20 de maio, artigo 45.º-C do Estatuto dos Benefícios Fiscais.
Download the 2026 Property Tax Guide
This article provides general information and does not constitute tax advice.