HOME NEWS

The Portuguese government is moving forward with a new round of reforms to the rental market. Under a proposed amendment to rental legislation submitted to Parliament on 12 August 2026, fixed-term lease agreements that renew automatically would, in principle, be renewed for the same duration as the original contract, rather than being subject to a minimum three-year renewal period.

The proposal still requires review and approval by the Portuguese Parliament, meaning the new rules have not yet entered into force.

Renewal Periods to Match the Original Lease Term

Under the current framework, where the parties have not agreed otherwise, certain fixed-term residential leases are subject to a minimum three-year period upon automatic renewal.

The new proposal seeks to change this rule. If approved, automatically renewed leases would generally be renewed for the same duration as originally agreed. For example, a one-year lease that qualifies for automatic renewal could be renewed for another year rather than automatically being extended for at least three years.

As for the overall duration of residential leases, the minimum term would generally remain one year, while the maximum term would remain 30 years.

Restrictions on Landlords Opposing the First Renewal Could Be Relaxed

Another significant change concerns a landlord’s right to oppose the renewal of a lease.

Under the current rules, landlords may prevent automatic renewal by giving tenants the required notice, which varies depending on the length of the contract. However, landlords are generally unable to prevent the first renewal until three years have passed since the lease was signed, except in certain legally defined circumstances, such as when the property is required as a home for the landlord or their children.

Under the government’s proposal, this three-year restriction would be removed. If the amendment is approved, landlords would be able to oppose renewal when the initial lease term expires, provided they comply with the legally required notice period.

This could make residential lease arrangements in Portugal more flexible while also increasing the importance of the original contract term and the specific conditions agreed between landlords and tenants.

90-Day Annual Limit Proposed for Tourism-Related Rentals

The proposal also addresses residential properties rented for tourism purposes.

Under the plan submitted to Parliament, these contracts would only fall within the relevant framework if their total duration does not exceed 90 days per calendar year, whether those days are consecutive or spread throughout the year.

The measure further clarifies the distinction between standard residential leases and short-term rentals for tourism purposes, reflecting the government’s broader efforts to regulate different segments of Portugal’s housing rental market.

Overall, the proposed reform aims to make Portugal’s rental framework more flexible while reshaping the rules governing lease renewals between landlords and tenants. If approved by Parliament, shorter leases, including one-year contracts, would no longer generally be extended for a minimum of three years upon automatic renewal, while landlords would gain greater flexibility when deciding whether to renew a lease after its initial term. For landlords and property investors, this could provide greater flexibility in managing lease durations and exit arrangements, although the final impact will depend on the legislation ultimately approved by Parliament.

Reference link: https://www.idealista.pt/news/imobiliario/habitacao/2026/08/14/77136-rendas-governo-quer-fim-dos-limites-minimos-nas-renovacoes-de-contrato

For more details, please refer to: https://adlinvestment.com/en/about/