Tax on rental income in Portugal: rates, deductions and Anexo F
Updated 10 July 2026 · Sources: IRS Code (arts. 41 and 72), Law 56/2023 (Mais Habitação), 2026 State Budget
Rents from property are property income, category F of Portuguese personal income tax (IRS). The good news: tax is charged on net income (rents minus deductible expenses) and, since 2026, most landlords with moderate rents pay only 10%. The bad news: those who don’t keep invoices or know the rules pay more than they should.
The rates in force
| Situation (housing) | Flat rate |
|---|---|
| General rule | 25% |
| Lease of 5 to 10 years | 15% (−2% per renewal, down to a 5% floor) |
| Lease of 10 to 20 years | 10% |
| Lease of 20 years or more | 5% |
| Housing with rent ≤ €2,300 and duration ≥ 3 years, new and ongoing (income from 2026 to 2029) | 10% |
In practice, the line that matters most since 2026 is the 10% one: the housing tax package applies it to residential leases with rent up to €2,300 and a minimum duration of 3 years (new or already in force) for income earned until the end of 2029. Outside the regime (higher rents, short-term lets, non-residential leases) the general 25% rate applies.
As an alternative to the flat rates, the landlord may opt for aggregation: adding the rents to their other income and paying at the general progressive rates. It mainly pays off for those with low total income; for most, the flat rates are more favourable. It is worth simulating both scenarios.
What you can (and cannot) deduct
✓ Deductible
- IMI (property tax) and the lease’s stamp duty
- Condominium fees (paid by the landlord)
- Property insurance (fire, multi-risk)
- Conservation and maintenance works
- Letting and property-management fees
- Energy certificate
✗ Not deductible
- Furniture, appliances and decoration
- Mortgage interest (financing costs)
- Construction or extension works (structural)
- Expenses without an invoice bearing the landlord’s NIF
Golden rule: an invoice with your NIF for everything, kept for at least 4 years. Conservation works done in the 24 months before the start of the lease are also deductible, relevant for properties renovated to rent.
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How to file: the Anexo F
Rents are declared in Anexo F of the Modelo 3 tax return, filed between 1 April and 30 June of the following year. The amounts from electronic rent receipts come pre-filled; deductible expenses are entered by the landlord, property by property. An organised expense record throughout the year turns the Anexo F from nightmare into formality.
Frequently asked questions
What is the tax rate on residential rents?
The general rate is 25% on net income, but between 2026 and 2029 most landlords pay only 10%: it applies to housing leases with rent up to €2,300 per month and a minimum duration of 3 years, new or ongoing. Long leases also have their own rates: 15% (5 to 10 years, reduced by 2% per renewal down to a 5% floor), 10% (10 to 20 years) and 5% (20 years or more).
What is the new 10% rate from the 2026 State Budget?
It is the housing tax package regime (in force since 2026): a 10% rate for income from residential leases with rent up to €2,300 per month and a minimum duration of 3 years, covering new AND ongoing contracts, applicable to income earned until 31 December 2029. Short-term lets, non-residential leases and rents above the threshold are excluded.
Which expenses can I deduct from rents?
Expenses actually incurred and documented to obtain or secure the income: IMI, condominium fees, property insurance, the lease’s stamp duty, conservation and maintenance works (non-structural), letting or management fees and the energy certificate. Furniture, appliances, decoration and financing costs (loan interest) are not deductible.
When and where do I declare the rents?
In Anexo F of the IRS Modelo 3 return, filed between 1 April and 30 June of the following year. Rents reported through electronic receipts come pre-filled, but deductible expenses must be entered by the landlord, with supporting documents kept.
Does the tenant withhold anything from the rent they pay me?
If the tenant is a company (an entity with organised accounts), it must withhold 25% of the rent at source and hand it to the tax authority on account of your IRS. Between private individuals there is no withholding.
Reach April with the numbers ready
In Tagus Rentals, rents and expenses are recorded per property throughout the year, with attachments stored. At tax time, just export and fill in.
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Request a rent estimateThis guide is for information only and does not replace tax advice: rates and rules can change with each State Budget; confirm your situation with a certified accountant. Sources: IRS Code (arts. 41 and 72), Law 56/2023, 2026 State Budget.