A landlord's tax guide for Lisbon: IRS and IMI

Letting a property in Lisbon means two main taxes: IRS on the rent you receive and IMI on the property you own. This guide explains how each works in 2026, what you can deduct, and the legal ways to pay less. It is not tax advice: always confirm your own situation with an accountant or on the Portal das Finanças.

IRS on rental income (Categoria F)

Rent is property income, declared on Annex F of your IRS return. For rent received in a year, Annex F is filed by 30 June of the following year. You deduct the eligible expenses for each property, and the tax falls on the net (rent minus expenses).

The rate in 2026

The general autonomous rate for residential lettings is 25% (28% for non-residential). Alternatively you can opt for aggregation (englobamento), adding the rent to your other income under the progressive rates, which usually only helps at lower income levels.

For 2026, Decree-Law 97/2026 (20 May) created a reduced 10% IRS rate, under article 45.º-C of the Tax Benefits Statute (EBF), for rent from contracts used exclusively for housing with a monthly rent up to €2,300. It applies to income received between 1 January 2026 and 31 December 2029, to new and existing contracts, and also covers transitory and student contracts. No minimum contract length is required.

The €2,300 limit is a single national figure (2.5 times the 2026 minimum wage); it does not vary by property type or area, and can be updated by portaria. The calculation counts the rent plus any furniture, equipment and services, even if invoiced separately. Mind the cliff: above €2,300 the whole rent is taxed at 25%, not just the part over the limit, so a flat let at €2,400 can net less after tax than one at €2,300.

The earlier duration-based reductions (15% for 5 to 10 years, 10% for 10 to 20, and 5% above 20 years) only apply to long, permanent-housing contracts. With the 10% rate up to €2,300, in practice only contracts of 20 years or more (5%) still beat it; the most favourable rate for your case always applies.

What you can (and cannot) deduct

You can deduct the expenses actually incurred and paid to earn or maintain the income, per property, as long as the invoice is in your name.

• •Deductible: condomínio; conservation and maintenance works; IMI; stamp duty on the contract; rent or default insurance.
• •Not deductible: mortgage interest; furniture, appliances and comfort or decoration items; depreciation; the additional to IMI (AIMI).

Works done up to 24 months before letting can count, if the property had no other use in between. Always keep invoices in the landlord's name.

IMI: the property tax

IMI is an annual municipal tax on the property's rateable value (VPT), paid by the owner. In Lisbon the 2026 rate is 0.3%, the legal minimum for urban property (the legal range is 0.3% to 0.45%).

It is paid the following year: a single instalment in May up to €100, two (May and November) between €100 and €500, and three (May, August and November) above €500. The bill arrives in April.

Large property holdings also pay AIMI, the additional to IMI: individuals are taxed only on the VPT above €600,000 (€1,200,000 for couples filing jointly), at rates from 0.7% to 1.5% depending on the amount. It is assessed in June and paid in September.

Rent receipts

Rent should be documented with an electronic rent receipt issued on the Portal das Finanças. That is what supports your return and protects both sides.

How to pay less, legally

• •Declare and deduct every eligible expense, always with the invoice in your name.
• •Consider longer contracts, which can qualify for lower rates.
• •Check whether your rent qualifies for the 10% moderate-rent rate.
• •Compare the autonomous rate with aggregation if you are on a low income.

If you would rather not deal with any of this, LOFTZ manages the letting for you, contracts and receipts included, or leases your property from you on guaranteed rent. See the options for landlords. Either way, always confirm the figures for your case with an accountant.

This article is informational and is not tax advice. Rules and rates can change; confirm on the Portal das Finanças or with a professional.

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