Key figures — as of 2026-09-27: Regime Simplificado de Arrendamento Acessível (RSAA) in force since 1 September 2026 under Decree-Law 97/2026 — full IRS/IRC and Stamp Duty exemption on qualifying rents, no ceiling on the rental value; rent capped at roughly 80% of the municipality's median rent per m² (INE data); minimum contract term 3 years for permanent housing, 3 months for temporary residence; a separate flat 10% IRS rate remains available for any "moderate rent" lease up to €2,300/month through 2029.
A New Rent-for-Tax Trade
Landlords in Portugal now have a genuine zero-tax route to renting out property — provided they're willing to charge less than the market would otherwise bear. From 1 September 2026, Portugal introduced the new Simplified Affordable Rental Scheme, and qualifying rental income under it can be exempt from both IRS and IRC. The regime, formally the Regime Simplificado de Arrendamento Acessível (RSAA), was created by Decree-Law 97/2026, of 20 May, and introduces a simpler alternative for anyone wanting to put a property on the rental market at an accessible price.
For foreign landlords — many of whom bought Portuguese property as an investment or now let out a second home — this is the most direct tax break the housing package has produced so far, and it comes with no cap on the property's value.
How the Rent Cap Works
The trade-off is straightforward: accept a lower rent, get a bigger tax cut. The RSAA replaces the Rental Support Programme, with the aim of promoting a rental supply with rents below 80% of the median rent per m² in each municipality. That median is published by Portugal's national statistics office, INE, on a concelho-by-concelho basis, and the calculation can also factor in features of the property, such as its energy rating or the existence of parking.
In exchange, the owner commits to charging a rent equal to or below 80% of the median rent values per square metre for the municipality, and in return the rental income becomes exempt from IRS or IRC and from Stamp Duty, with no ceiling on the amount. Contracts have to run for a minimum term — three years for permanent residence, or three months for temporary residence.
Crucially, this isn't the only reduced-tax lane. Portugal also runs a separate, less restrictive 10% flat IRS rate: residential rental contracts with rents of up to €2,300 per month in 2026 can benefit from that rate, although only until 31 December 2029. That rate applies whether or not the rent is anywhere near the local median — it just has to stay under the €2,300 ceiling. The RSAA, by contrast, has the landlord accept a potentially lower rent but receive a full exemption with no stated expiry date.
The GrowIN Calculation: When Cutting Rent Actually Pays
Here's the number that matters before anyone signs a new lease. Take a hypothetical Lisbon-area flat renting at €1,500/month on the open market, taxed at the standard 25% autonomous rate: that's €13,500 net a year. Now suppose the local RSAA cap works out to €1,200/month — a 20% rent cut. Under full IRS/IRC exemption, that same property nets €14,400 a year. The landlord earns €900 more annually by charging 20% less rent, purely because the tax bill drops from 25% to zero. Where the gap between market rent and the RSAA ceiling is narrow, the exemption tends to win; where the ceiling would force a much steeper cut, the flat 10% rate on the full market rent (up to €2,300) often nets more. In areas where market rents sit close to the affordable rental limits, the exemption may outweigh the difference in price. This is illustrative maths, not a substitute for a proper simulation against your own municipality's published median — run the real numbers before switching.
What Tenants Actually Get
The scheme isn't purely a landlord play. From 2026, tenants can deduct up to €900 in rental expenses from their income tax, rising to €1,000 in 2027, for leases classified as moderate rent — contracts with monthly rents of up to €2,300. For a family renting near that ceiling, that's a meaningful annual clawback on top of whatever rent reduction an RSAA landlord passes through.
Old Contracts, New Rules
If you're already renting under the previous Programa de Apoio ao Arrendamento, nothing changes automatically. Contracts signed under the previous programme retain the tax effects already granted to them, and the transition was designed so landlords already charging affordable rents under the repealed scheme aren't disadvantaged. There's also a live grey area worth flagging: the tax authority has not yet published binding guidance on every application scenario — notably renting to close family members — and accountants are advising clients to confirm treatment case by case before formalising anything.
What to Watch Next
The RSAA sits inside a wider 2026 housing tax package that also introduced Investment Contracts for Rental Housing aimed at larger developers, plus VAT cuts on construction. As "GrowIN Portugal Editorial" puts it: a 20% rent cut that still leaves the landlord better off is the kind of trade only a tax authority can engineer. Expect Finanças to issue clarifying guidance over the coming months, and watch municipal INE median-rent tables — they set the actual ceiling everything else depends on. Anyone weighing this against existing NHR-adjacent tax planning, or simply working out their IRS filing position as a resident landlord, should check current thresholds directly with the Autoridade Tributária at portaldasfinancas.gov.pt before committing to a three-year lease. For a wider view of how rental income interacts with residency and filing obligations, see our tax & NIF guide, and get in touch via services if you'd like a landlord-specific comparison run for your property.
Portugal has tried affordable-rent tax breaks before with limited success — this time the exemption is bigger, and for the right property, the arithmetic genuinely favours renting for less.