Portugal Rental Laws: Pro-landlord, Neutral or Pro-tenant?

Portugal's landlord and tenant laws are judged by the Global Property Guide to be Pro-Tenant between landlord and tenant. Portuguese rental law is considered pro-tenant for several key reasons, stemming from a long-standing tradition of tenant protection and a desire to foster a fair and balanced housing market. Key factors include strong security of tenure, which ensures tenants' right to remain in their homes, regulated rent increases to prevent excessive hikes, and limited grounds for eviction, which protect tenants from arbitrary displacement. These and other provisions work together to create a system that prioritizes tenant stability and fairness in the rental market.

Rents: Can landlord and tenant freely agree rents in Portugal?

Initial rent can generally be negotiated between landlord and tenant, subject to applicable statutory restrictions. Special rules apply to supported, controlled and affordable housing schemes. Freedom to set rent is also restricted for certain new residential tenancy agreements involving previously rented properties. Where Article 34 of Law No. 56/2023 applies, the initial rent is generally linked to the previous rent, increased by 2%, with additional adjustments and exceptions permitted by law.

The property’s rental history must therefore be checked before a new rent is agreed. The parties may agree rent review arrangements in writing, subject to mandatory legal provisions. Rent reviews are not universally required to take place annually. Where no specific review arrangement has been agreed, the statutory default generally allows the landlord to adjust rent annually using the official adjustment coefficient. The first adjustment may take place one year after the tenancy begins, and subsequent adjustments one year after the previous adjustment. The landlord must give at least 30 days’ written notice, stating the applicable coefficient and the resulting rent.

Deposits

Portuguese law distinguishes between a security deposit (caução) and rent paid in advance. Under Article 1076 of the Portuguese Civil Code, the parties may agree on a security deposit of up to the equivalent of two months’ rent. Rent may also be paid in advance, provided there is a written agreement, for a period not exceeding two months. Requests for six to twelve months’ advance rentshould therefore not be presented as a legally permitted standard practice. 

The tenancy agreement should clearly identify each payment, the obligations secured by the deposit, any permitted deductions and the arrangements for
returning the balance. A signed inventory and photographs of the property’s condition help prevent disputes. Any deductions should be justified, taking
normal wear and tear into account. A landlord may also request a guarantor (fiador), whose liability depends on the guarantee’s terms and applicable law.

There is no general legal requirement for the guarantor to be a Portuguese citizen. The guarantor undertakes personal responsibility for the obligations covered by the guarantee if the tenant defaults. The agreement should expressly define the guarantee’s scope, duration and treatment of tenancy renewals.

What rights do landlords and tenants have in Portugal, especially as to duration of contract and eviction?

A rental contract, or contrato de arrendamento in Portuguese, is a formal agreement that outlines the terms of your tenancy and ensures the rights of both tenants and landlords are protected.

Documents Required for a Rental Contract:

• Your Tax Identification Number (NIF)
• Identification documents for both landlords and tenants (including date of birth, nationality, and marital status)
• The address of the property
• The property's license number and issue date
• Rent amount and payment due dates
• Contract start and end dates

Most rental agreements in Portugal allow you to terminate the contract after completing one-third of its duration. However, if more than a year remains on your contract, you must give a notice period of 120 days. For contracts with less than a year remaining, a 60-day notice period is typically sufficient.

How effective is the Portugal legal system?

The legal system in Portugal is generally effective in handling eviction cases, but it is designed to offer strong protections for tenants, which can make the process somewhat lengthy and formal for landlords.

Legislation

In Portugal, tenant and landlord relations are primarily regulated by the Civil Code and specific laws related to housing and rental agreements. Key regulations include:

1. Portuguese Civil Code (Código Civil). Contains the principal substantive rules on tenancy agreements, rent, maintenance obligations, duration, renewal and termination. 
2. Law No. 6/2006 of 27 February — New Urban Tenancy Regime (NRAU). Establishes important rules on tenancy communications, transitional arrangements for older agreements and procedures for enforcing tenancy rights, including the special eviction procedure. It operates
alongside the Civil Code. 
3. Decree-Law No. 160/2006 of 8 August - Regulates the information to be included in urban tenancy agreements and requirements relating to the property’s authorised use. 
4. Additional legislation and implementing regulations. Specific rules may apply to initial rent restrictions, supported or affordable housing, annual rent adjustments and BAS procedures. These include relevant provisions of Law No. 56/2023 of 6 October and Ministerial Order No. 49/2024 of 15 February.

Brief History: Recent changes in Portugal's landlord and tenant law

Portuguese urban tenancy law has evolved through successive reforms addressing contractual flexibility, housing stability and the treatment of older
tenancies.
In 1990, Decree-Law No. 321-B/90 introduced the Urban Tenancy Regime (RAU), consolidating the rules governing urban leases, including fixed-term residential agreements. 
In 2006, Law No. 6/2006 introduced the New Urban Tenancy Regime (NRAU). It reorganised the legal framework alongside the Civil Code and established transitional arrangements for existing tenancies. 
The 2012 reforms, particularly Law No. 31/2012, increased contractual flexibility and revised the rules on older tenancies, rent adjustments and enforcement, including the special eviction procedure. 
In 2019, Law No. 13/2019 strengthened tenancy stability and protections for vulnerable tenants, including changes affecting contract duration, renewal and termination. 
Subsequent changes included the 2023 limits on advance rent and security deposits, restrictions on initial rents for certain new residential agreements under Law No. 56/2023, and the implementation of the Tenant and Landlord Office (BAS) in 2024.

This article was written in collaboration with beyondlegal.pt