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2025 Tax Changes for Landlords and Buyers in Portugal: What You Need to Know
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Are you thinking about buying or renting out property in Portugal? The rules have changed this year, and it is more important than ever to get the facts straight. At ACPS Real Estate, we want to make things simple and transparent. Here is your complete guide to what is new in 2025 and how it could affect you.
Lower Rental Tax for Moderate Rents
If you rent out your property for €2,300 a month or less, you can now benefit from a reduced income tax rate of just 10 percent. To qualify, your rental contract must be properly registered and meet all official requirements. This applies to both long-term leases and certain temporary contracts for professionals or students.
No Extra Property Tax for Fair Rents
Properties rented at moderate prices are now exempt from the additional municipal property tax, even if your home is valued above €600,000. This change encourages more affordable rentals and could mean real savings for landlords who keep their rents reasonable.
Capital Gains Tax Break
If you sell a property and reinvest the proceeds into another home that you rent out at a moderate price, you may not have to pay capital gains tax. This is a great incentive for anyone looking to grow their rental portfolio, but the rules are strict, so make sure you get advice before you sell.
Reduced VAT on New Homes
If you are building or buying a new home to rent or sell at moderate prices, you will now pay just 6 percent VAT, which is much lower than the standard rate. This reduced VAT is available until the end of 2029 and is meant to boost the supply of affordable housing.
Rent Increases: What’s Allowed in 2025?
For this year, the legal rent increase is capped at 2.16 percent. If you want to raise the rent, you must give your tenants 30 days’ written notice. This rule applies to all rental contracts, so make sure you follow the process to avoid disputes.
Higher Property Transfer Tax for Non-Residents
If you are buying from outside Portugal, there is a new flat property transfer tax of 7.5 percent for most non-resident buyers. There are some exemptions, such as if you become a resident or rent long-term at moderate prices, but for most international buyers, this is now the standard rate.
The End of the Old Tax Scheme
The popular non-habitual residency tax regime has ended. In its place is a new program focused on researchers and innovators. If you were planning to use the old scheme, you will need to review your options.
Why These Changes Matter
These updates are designed to make the market fairer and encourage more affordable rentals. They also mean more paperwork and stricter rules. At ACPS Real Estate, we are here to help you navigate every step. No jargon, no surprises, just honest advice that works for you.
If you want to know how these rules affect your plans, visit our homepage or get in touch for a personal chat about your options. We will help you make the right move, every time.