# Portugal Rental Reform Could End Rent Caps, Speed Up Evictions

> Council of Ministers approves bill letting landlords reset rents between tenants and cutting the eviction grace period from three months to two.

- Source: https://www.growinportugal.com/news/government-s-rental-reform-bill-could-end-rent-reset-limits-2026-09-24
- Publisher: GrowIN Portugal (https://www.growinportugal.com)
- Published: 2026-09-24
- Last reviewed: 2026-09-24
- Language: en

> **Key figures — as of 2026-09-24:** Bill approved by Council of Ministers on **9 July 2026** — not yet law; eviction threshold for unpaid rent cut from **3 months to 2 months** of arrears; **2% cap on rent increases for new tenancies scrapped early**, three years ahead of its 2029 sunset; advance-rent cap rises from **2 to 3 months**, and the ceiling on security deposits is **removed entirely**; Housing Emergency Fund support capped at **€2,300/month for up to six months** via IHRU.

## The headline number: two months, not three

The single change most likely to alter behaviour on both sides of a lease is procedural: landlords will be able to start eviction proceedings after **two months of unpaid rent instead of three**. The main change on the eviction side is a reduction in the grace period for rent arrears — at present, landlords can begin eviction proceedings after three months of missed payments. The Government wants to shorten that period to just two months of non-payment, under the proposal approved by the Council of Ministers on Thursday, 9 July, which still needs to be reviewed by Parliament.

Repeated lateness now counts too. Repeated late payment will now count as non-compliance if a tenant pays rent eight days or more late on three occasions, consecutive or not, within 12 months, or more than four times within 18 months. That's a tighter net than the current four-strikes-in-12-months rule, and it matters for anyone paying rent from a foreign account where transfers occasionally clear late.

## Rent resets: the 2% ceiling disappears

For new contracts, the reform ends the rent-increase cap that has shaped Lisbon and Porto pricing since 2023. One of the most significant measures is the removal of the 2% cap on rent increases for new tenancy agreements, bringing this change forward by three years compared to the previously set deadline of 2029. Housing Minister Miguel Pinto Luz put it plainly: rents will now "be freely set by the parties." Existing leases are untouched — the government explains it wants to "devolver maior liberdade contratual às partes" while leaving contracts already in force unchanged — but the moment a tenancy turns over, the old ceiling is gone.

**GrowIN's calculation:** take a typical incoming-tenant scenario — a €1,200/month flat. Under today's rules, a landlord can ask for at most two months' advance rent, and deposits are conventionally one to two months, so the maximum reasonable upfront ask is around four months' rent, roughly €4,800. Once the advance-rent cap rises to three months and the deposit ceiling disappears, a landlord asking for three months' advance plus a three-month deposit could reasonably demand six months upfront — about €7,200. That's an extra €2,400 in cash a newcomer needs to find before collecting the keys, a jump of roughly 50% on the move-in cost alone. For foreigners arriving without a Portuguese credit history or guarantor, that gap could decide whether a lease is affordable at all.

## Automatic renewal and pre-1990 protections

Landlords gain more control over lease continuation too. Automatic renewal of contracts may now be refused by landlords, provided prior notice is given, while the minimum and maximum duration of contracts remains the same at one to 30 years. Older, frozen-rent contracts from before 1990 keep a safety net for the most vulnerable: pre-1990 tenants aged over 65 or with a disability rating of 60% or higher retain protection, with updates only triggered once household income passes a defined threshold — a carve-out the government built in alongside the wider liberalisation.

To cushion the sharper eviction timeline, the government is also standing up a support mechanism. The Portuguese government has shortened the timeframes for evictions due to rent arrears and launched a Housing Emergency Fund offering support of up to €2,300 per month. Run over six months, that cap implies a maximum of €13,800 in support per qualifying household — a real backstop, but one that assumes a tenant successfully applies and qualifies before eviction proceedings conclude.

## Why it isn't law yet

This is a *Proposta de Lei*, not an enacted statute, and Portugal's government doesn't hold a majority. The government will send the bill to parliament for final approval, but it needs backing from either the Socialists or the anti-immigration, anti-establishment Chega party, neither of which has indicated how it will vote. Tenant groups are already pushing back hard: Reuters reports the plan has "prompted criticism from tenant groups who say the moves will deepen the housing crisis that the government aims to solve." The government's counter-argument centres on supply — officials estimate more than 250,000 empty homes remain off the market due to what it describes as "deep legal uncertainty" that discourages owners from renting them out.

## What this means if you're renting or letting in Portugal

**GrowIN Portugal Editorial says:** *for foreigners renting in Portugal, this bill asks for more cash upfront and gives less time to fall behind on payments.* Nothing changes today — current NRAU rules on the 2% cap, three-month eviction grace period and existing deposit norms still apply until Parliament votes, the President signs, and the text is published in the Diário da República. Landlords should not pre-emptively raise rents or demand new guarantees on the strength of the announcement alone; tenants signing a new lease this autumn are still protected by the rules in force today. Anyone weighing a move, a renewal, or a new letting agreement should watch the parliamentary debate closely rather than the Council of Ministers text — that's where the real negotiation with the Socialists or Chega will happen. For a fuller picture of what documents and budget to prepare before signing a Portuguese lease, see our [relocation](/relocation/) guide, and GrowIN's team can review lease terms as part of our relocation support.

The rental market foreigners land in by the end of 2026 could look meaningfully different from the one they're renting in today.

## Sources

- [Portuguese Government — Council of Ministers Communiqué, 9 July 2026](https://portugal.gov.pt/gc25/governo/comunicados-do-conselho-de-ministros/comunicado-do-conselho-de-ministros-de-9-de-julho-de-2026-1)
- [idealista/news](https://www.idealista.pt/en/news/property-for-rent-in-portugal/2026/07/23/76497-rentals-government-tightens-eviction-rules-and-strengthens-social-support)
- [Reuters (via AOL)](https://www.aol.com/articles/portugal-launches-reform-liberalise-rental-084826000.html)
- [Portugal Resident](https://www.portugalresident.com/proposed-rental-law-reform-sparks-political-row-over-tenant-protections/)

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© GrowIN Portugal. Cite as: GrowIN Portugal, "Portugal Rental Reform Could End Rent Caps, Speed Up Evictions", https://www.growinportugal.com/news/government-s-rental-reform-bill-could-end-rent-reset-limits-2026-09-24