A Rent Overhaul Lands in Parliament, and the Death of a Tenant Could Unfreeze Portugal's Oldest Rents

The government's long-signalled overhaul of Portugal's rental law has now been formally lodged in Parliament, and buried in the text is a change that could quietly reprice some of the country's cheapest homes: when the original tenant of a decades-old contract dies, the below-market rent they enjoyed may no longer pass, untouched, to whoever is living with them. It is the moment landlords of Portugal's rendas antigas — the frozen "old rents" that predate the 1990 reform of the sector — have waited more than a generation for.

The bill, delivered to the Assembleia da República as a proposta de lei after the Council of Ministers approved the new regime in July, gathers together measures the executive has been trailing for weeks. It would make rent arrears of two months grounds to terminate a contract, allow landlords to walk away from new lettings after the first year, and — the provision that has drawn the most attention — narrow the rules on transmitting an old contract on the death of the primitivo arrendatário, the person who first signed it. Where that transmissibility is restricted, the rent can be brought back toward the property's fiscal value rather than staying pinned to inflation. The same package also revises the direito de preferência, the sitting tenant's right of first refusal if the landlord sells.

To understand why this matters, it helps to know how Portugal froze itself into two rental markets. For decades, contracts signed before 1990 (and, in practice, many going back to the mid-twentieth century) were shielded from meaningful increases, leaving elderly tenants in central Lisbon and Porto paying a few dozen euros a month for flats now worth several hundred thousand. The 2012 reform under the Troika-era government began prising these open; successive changes have chipped away since. Each step has pitted long-standing tenants, many of them old and on fixed incomes, against landlords who argue they have been made to subsidise strangers for half a century.

The death-transmission clause is the sharpest edge of that fight. Under the current framework, an old rent can cascade to a spouse or, in some cases, a child or cohabitant who lived in the home, carrying the frozen price with it. By tightening when that inheritance is allowed, the state is betting that many of the oldest, deepest discounts will simply expire with their original holders — a slow-motion thaw rather than a mass eviction. The government has paired the wider reform with a Fundo to cushion tenants whose rents are unfrozen, an acknowledgement that the political risk of turfing out pensioners is real.

For Portugal's foreign residents, the immediate stakes are mostly indirect but worth watching. Newcomers almost never hold a pre-1990 contract; they rent at market rates, where the same bill removes the cap on new-contract rents and makes it easier for owners to end tenancies — changes that tilt the balance toward landlords and could, at the margin, push more stock onto the open market. Anyone buying a tenanted property should also read the revised right-of-preference rules carefully, because they govern whether a sitting tenant can step in ahead of an outside buyer, and should understand how the promissory contract and a valid energy certificate fit into any Portuguese property transaction.

Nothing changes yet. As a proposta de lei, the text now faces committee scrutiny, amendments and votes before it can take effect, and tenants' associations have already promised a fight over the transmission clause in particular. But the direction is unmistakable: after thirty years of two-speed rents, the state is moving, cautiously, to let the market back in — one expiring contract at a time.