Skip to main content

Landlord tax tool

Letting a flat in Portugal? See the IRS on your rent.

Rent is categoria F income, declared on Anexo F. It is taxed on its own at a flat rate (25% for a home, 28% otherwise, less for long leases and, from 2026, 10% for moderate rents), unless you choose to add it to your other income. Enter the rent, your costs and your other income to see both bills and which is lower.

Everything the tenant paid you for the year. For the moderate-rent test this includes equipment permanently attached to the property and services that add to its value, even if billed separately.

Monthly rent = €1,000.00: the year's rent divided by the months elapsed under the contract, for the €2,300 moderate-rent test. Several tenants: enter the total rent.

Type of lease
Deductible expenses for this property in 2026 (CIRS art. 41.º)

E.g. agency or management fees, the energy certificate.

Not deductible: mortgage interest and other financial costs, depreciation, furniture, appliances and décor, and AIMI. Keep the invoices: every expense must be documented.

Rendimento coletável from salary, pension, freelance, etc. — after the specific deduction, as on your last liquidação. Single filer.

Net rent (taxable)

€10,500.00

€12,000 rent − €1,500 expenses

(a) Autonomous rate · 10%

€1,050.00

EBF art. 45.º-C (Decreto-Lei 97/2026) — exclusively residential lease, moderate rent, 2026–2029

(b) Englobamento · 34.9% effective

€3,664.50

Extra IRS (and solidarity surcharge) from adding the net rent to €30,000 of other income — 2026 brackets.

Autonomous rate is cheaper by €2,614.50.

How the rate was chosen

Residential base rate
25%
Moderate rent (≤ €2,300/month)
yes — 10% cap
Rate applied
10%
Same rent as a non-residential lease
28%

Estimate for a Portuguese tax resident letting a property in Portugal, one lease at a time, filing alone, mainland rates. Not covered: foreign property (Anexo J), non-residents, Alojamento Local (taxed as category B), affordable-rent contracts under the RSAA (exempt), joint filing, deductions à coleta and the Madeira/Açores tables. Any tax withheld by a business tenant (10% on moderate rents, CIRS art. 101.º n.º 1 f)) is credited against the result.

Who this is for

Portuguese residents letting property in Portugal

The calculator does not cover property outside Portugal (declared on Anexo J, with its own credit for foreign tax) or non-resident landlords. It also leaves out short-term holiday lets under Alojamento Local, which are categoria B income, and affordable-rent contracts under the RSAA, which are exempt (Decreto-Lei 97/2026, anexo III).

The 2026 rates on rent

Lease Rate Source
Non-residential (shop, office, garage)28%CIRS art. 72.º n.º 1 e)
Residential25%art. 72.º n.º 2
Permanent home, 5 to under 10 years15%n.º 3 (−10 points)
… each renewal of the same length−2 pointsn.º 3, at most −10 points in total
Permanent home, 10 to under 20 years10%n.º 4 (−15 points)
Permanent home, 20 years or more5%n.º 5 (−20 points)
New long lease at a rent ≥5% below the previous one−5 points moren.º 24
Exclusively residential, rent up to €2,300/month, income from 2026 to 202910%EBF art. 45.º-C, unless a more favourable rate applies (mainly the long-lease rates above)

The 10% rate covers contracts for exclusively residential letting. Its €2,300 ceiling is 2.5 times the 2026 minimum wage of €920 (Decreto-Lei 97/2026, art. 2.º n.º 2 a)). It is fixed at the 2026 figure and changes only if a portaria updates it (art. 2.º n.º 3), not automatically with later minimum wages. The monthly rent is the year's rent divided by the months of the year that have elapsed under the contract (art. 3.º n.º 3). It also counts movable items and equipment permanently attached to the property and services that add to its value, even when billed under a separate contract (n.º 1). With several tenants, the ceiling applies to the total rent (n.º 2). The law looks at income earned from 1 January 2026, so existing contracts qualify as well as new ones. The 10% gives way whenever a more favourable rate applies (EBF art. 45.º-C n.º 1): the long-lease rates of art. 72.º are the usual case, but any other regime with a lower rate also takes precedence.

Two conditions on the long-lease reductions: they are lost retroactively, with interest, if the contract ends early for a reason attributable to the landlord (art. 72.º n.º 20); and they do not apply to contracts signed from 2024 whose rent is more than 50% above the municipal rent ceiling for the typology (n.º 23).

What you can deduct

CIRS art. 41.º lets you deduct, property by property, every cost you actually paid to earn or keep the rent:

  • IMI and stamp duty, only for a property whose rent is taxed that year (n.º 5)
  • Condominium charges the owner must pay by law (n.º 2)
  • Repairs and maintenance, including works paid in the 24 months before the letting began, if the property was not used for anything else in between (n.º 7)
  • Insurance, including rent insurance (n.º 1)
  • Your own rent, if you let your former home after moving more than 100 km away, under the conditions of n.º 8

Not deductible: mortgage interest and other financial costs, depreciation, furniture, appliances and décor, and AIMI (n.º 1). Every cost must be backed by a document (n.º 9).

If costs exceed the rent, the loss does not reduce tax on other income. It carries forward against rent for the next six years (CIRS art. 55.º n.º 1 b)), provided the property earns rent in at least 36 of the following 60 months (n.º 8).

Englobamento: when adding rent to your income pays

Portuguese residents (only residents) may choose to add rental income to their other income (CIRS art. 72.º n.º 13). Our reading is that this stays open for rent taxed at the 10% moderate rate: Decreto-Lei 97/2026 says its measures “não prejudicam a opção pela aplicação do regime mais favorável” (art. 2.º n.º 4). The rent is then taxed at your marginal rate on the progressive brackets, plus the solidarity surcharge above €80,000 (art. 68.º-A). The calculator works out the extra tax as the IRS on your other income plus the net rent, minus the IRS on your other income alone, using the same 2026 brackets as our income tax calculator.

It tends to pay only when your other income is low: the first bracket is 12.5%, so with little else coming in, englobamento beats 25%. Against the 10% moderate-rent rate or a long-lease rate it rarely does. See how the brackets stack in the 2026 tax brackets guide.

The choice is all or nothing for the category: tick it and every lease you declare on Anexo F that year is added (art. 22.º n.º 5). With several properties, add their results up before deciding.

Declaring it

Rent goes on Anexo F of the Modelo 3 return, filed between 1 April and 30 June of the following year, with each property, its rent and its expenses on its own line. The englobamento option is a box on the same annex. A business tenant that withholds tax on rent within the moderate-rent rule now withholds 10% (CIRS art. 101.º n.º 1 f), added by Decreto-Lei 97/2026); the withholding is credited against the final bill. The Modelo 3 filing guide walks through the return, and reading your liquidação shows where the rental tax lands on the assessment.

Common questions

What is the tax rate on rental income in Portugal in 2026?

For a Portuguese resident letting Portuguese property: 25% on net rent from a residential lease and 28% from a non-residential lease (CIRS art. 72.º n.os 1 e) and 2). A lease for exclusively residential use whose rent is at most €2,300 a month is taxed at 10% on income earned from 2026 to 2029, unless a more favourable rate applies, such as a long-lease rate (EBF art. 45.º-C, added by Decreto-Lei 97/2026). Permanent-home leases of 5, 10 or 20+ years get 10, 15 or 20 points off the 25%.

Should I choose englobamento for my rental income?

Englobamento adds the net rent to your other taxable income and taxes it on the progressive brackets. It pays when your marginal rate is below the autonomous rate, typically with little other income. Opting in brings all your category F income for the year into the return (CIRS art. 22.º n.º 5).

Which expenses can a landlord deduct?

Under CIRS art. 41.º, every cost actually paid to earn or keep the rent, property by property: IMI and stamp duty for a let property, condominium charges, repairs and maintenance (including works in the 24 months before the first letting), insurance including rent insurance. Not deductible: mortgage interest and other financial costs, depreciation, furniture, appliances and décor, and AIMI.

Sources

Landlord deadlines

Get an email before the IRS and IMI dates.

Rent is declared on the annual return from April to June, and IMI on the let property falls due from May (in instalments for larger bills). Get a short email a week before each deadline, plus a note when the rules change. Usually one to three emails a month.

Last verified against official sources (Portal das Finanças, Segurança Social, Diário da República):

  • Rental income (categoria F) rates, contract-length reductions and the moderate-rent 10% rate —
  • IRS brackets, specific deduction, solidarity surcharge and 2026 withholding tables —
Was this page helpful?

Spotted a mistake or something unclear? Tell me what to fix or add on this page. I read every note. Suggest an edit
What is it about?