As Portugal Thaws Its Oldest Frozen Rents, a New Emergency Housing Fund Will Pay Tenants Facing Eviction €537 a Month for Half a Year
Rents frozen since before 1990 are finally being unlocked, and the government is building a safety net for the mostly elderly, low-income tenants who could be pushed out.
Some of the cheapest rents in Portugal are about to change for the first time in a generation. Contracts signed before 1990 — many of them still charging less than €200 a month — are being moved onto the modern Novo Regime do Arrendamento Urbano (New Urban Lease Regime, or NRAU), ending decades of frozen prices. To soften the shock, the government is creating a Fundo de Emergência Habitacional (Emergency Housing Fund) to catch tenants who could otherwise be evicted.
Who is protected, and who is not
The transition is deliberately gentler for the most vulnerable. A tenant under 65 whose household earns less than €64,400 a year keeps a frozen rent for another five years. Tenants over 65 stay protected in the old regime indefinitely. Only households above that income threshold see their rent move immediately — and even then it is capped, updating to one-fifteenth of the property's taxable value (valor patrimonial tributário) rather than jumping to a full market price.
The Ministério das Infraestruturas e Habitação (Ministry of Infrastructure and Housing), led by minister Miguel Pinto Luz, estimates there are still between 30,000 and 50,000 of these old contracts in force. The vast majority carry rents below €200, a legacy of price controls that kept long-standing tenants — often elderly and living in Lisbon and Porto city centres — in place while the buildings around them were sold, renovated and re-let at many times the price.
What the fund pays
The Emergency Housing Fund is aimed narrowly at families in “housing vulnerability” who face losing their home through a judicial eviction. Those who qualify would receive one IAS — the Indexante dos Apoios Sociais (Social Support Index), set at €537.13 in 2026 — per month for up to six months, to cover housing costs of up to €2,300. In practice that is a bridge: half a year of support to find and move into new accommodation rather than a permanent subsidy.
The fund is scheduled to take effect on 1 January 2027. Because it commits future public money, the government is asking parliament for the necessary authorisation before the summer recess, meaning the legislative groundwork is being laid now even though tenants will not be able to draw on it until the new year.
Why it matters for residents
For most foreign residents renting at market rates, these pre-1990 contracts are a world away — their leases already sit under the NRAU. But the change matters for the shape of the rental market everyone shares. Landlords have long argued that frozen rents left thousands of flats trapped, poorly maintained and effectively off the market; unfreezing them could, over time, return some of that stock to circulation. Housing campaigners counter that without a robust safety net the reform simply displaces elderly tenants into a market where nothing is affordable.
The Emergency Housing Fund is the government's answer to that objection. Whether €537 a month for six months is enough to keep long-standing tenants housed — rather than merely delaying their departure — will be the test once the money starts flowing in 2027.
