Letting a property in Portugal puts you in one of two quite different tax positions, and which one is not a matter of degree. A long-term lease is rental income taxed at a flat rate. Short-term accommodation is a business, taxed like freelancing. The difference is larger than the rate.
Long-term letting
| Situation | Rate | Where |
|---|---|---|
| Residential rent, default | 25% | CIRS art. 72 |
| Moderate rent, to 31 Dec 2029 | 10% | EBF art. 45.º-C, added by DL 97/2026 |
The moderate-rent rate is not a small drafting detail — it is a fifteen-point reduction, and it is capped by reference to the minimum wage rather than to the property. The ceiling is 2.5 times the minimum wage.
The tax on the lease itself
Separate from the income tax, the lease attracts stamp duty at 10% of the statutory base, which is commonly one month's rent. It is easy to forget because it is charged once, at the start, and has nothing to do with the annual return.
Alojamento Local is not rental income
Short-stay accommodation is Category B — the same category as freelancing — not Category F. That means the simplified regime, a coefficient applied to turnover, Social Security obligations, and invoicing rules. It is a business, and the tax treats it as one.
| Category | B, not F |
|---|---|
| Simplified regime ceiling | €200,000 of annual income |
| Coefficient in a containment area | 0.50 (CIRS art. 31 al. h) |
Because it is Category B, everything in the freelancing articles applies: the Social Security calculation and the green receipts obligation are the same ones a consultant faces.
What decides which you are in
- A long-term residential lease is Category F rental income, taxed at the autonomous rate.
- Short-stay accommodation registered as Alojamento Local is Category B business income.
- The property is the same; the activity is what the tax follows.
How much tax do I pay on rental income in Portugal?
Residential rental income is taxed at an autonomous rate of 25% by default. A 10% rate applies to moderate rents under EBF art. 45.º-C for income received to 31 December 2029, capped at 2.5 times the minimum wage.
Is there stamp duty on a rental contract?
Yes — 10% of the statutory base, commonly one month's rent, charged once at the start of the lease.
Is Alojamento Local taxed like rental income?
No. Alojamento Local is Category B business income under the simplified regime, not Category F rental income, so it brings coefficients, Social Security obligations and invoicing rules with it.
What is the Alojamento Local coefficient?
0.50 in a containment area, under CIRS art. 31 al. h). The figure for areas outside containment is quoted inconsistently and we do not state one here.
Do the long-lease reduced rates exist?
A ladder of 15%, 10% and 5% for leases of five, ten and twenty years is widely quoted, but we have not been able to tie it to a provision, so we do not present it as fact.