Declaring Rental Income as a Landlord in Portugal in 2026 — A Practical Guide to IRS Category F, the New 10% Flat Rate on Moderate Rents, the Electronic Rent Receipt, Modelo 44, and the Expenses a Landlord Can Deduct

If you rent out a home in Portugal on a long-term lease, the income is taxable — and the rules for how it is declared and taxed were substantially rewritten in 2026. This guide walks a resident landlord through the essentials: the tax category your rent falls into, the rate you actually pay (which for most landlords is now far lower than the headline 25%), the electronic rent receipt you must issue, the expenses you can deduct, and the deadlines you cannot miss. It covers long-term residential leases; short-term holiday letting through Alojamento Local works differently and is flagged at the end.

This is general information, not tax advice. Property taxation in Portugal is unusually fluid right now, thresholds are indexed and change yearly, and individual situations vary. Confirm your own position with a contabilista certificado (certified accountant) or the Autoridade Tributária (Tax Authority, the AT) before filing.

Rental income is Category F

Income from letting property is taxed under Categoria F (rendimentos prediais, property income) of the personal income tax, IRS. This is the category for a standard long-term lease where you are simply a landlord collecting rent. It is separate from Category B (business income), which is where short-term Alojamento Local lands.

The tax is charged on your net property income — the rent you receive, minus the deductible expenses set out below — not on the gross rent.

The rate you actually pay in 2026

This is where the 2026 changes matter most. There are now two layers of rules, and you get whichever produces the lower rate.

The new 10% rate (the "choque fiscal")

Under Decreto-Lei n.º 97/2026, of 20 May — the "choque fiscal" housing-tax package — a new Article 45.º-C was added to the tax-benefits statute (Estatuto dos Benefícios Fiscais, EBF). It cuts the autonomous rate on residential-lease income to a flat 10% where the monthly rent does not exceed 2.5 times the national minimum wage (roughly €2,300 a month in 2026, though the exact ceiling moves with the minimum wage). This applies to both new and existing contracts, for income earned through 31 December 2029.

For the large majority of landlords with ordinary residential rents, this is now the rate to expect: 10%, not 25%.

The Code's base rate and duration reductions

The income tax code, IRS, still sets the underlying rules in Article 72.º. The base autonomous rate on Category F income is 25%, and the 2023 Mais Habitação reform layered duration-based reductions on top for permanent-home leases:

• Contract under 5 years: 25% (no reduction)
• 5 to under 10 years: reduced to 15% (with a further 2-point cut on each renewal, capped at a 10-point total reduction)
• 10 to under 20 years: reduced to 10%
• 20 years or more: reduced to 5%

Because the new 10% benefit applies "except where a more favourable rate applies," these duration reductions survive where they beat 10%. In practice, for a qualifying moderate-rent lease in 2026: short and medium contracts land at 10%, and only a 20-year-plus contract does better, at 5%. The simple rule to remember is that whichever rate is lower applies to you.

Or you can aggregate

Instead of the autonomous rate, you may opt to aggregate (englobamento) your rental income with your other income and be taxed at the progressive IRS scale. This only makes sense at low total-income levels; for most landlords the autonomous rate is better, but the option exists and is chosen in your annual return.

The 0% accessible-rent regime

From 1 September 2026, a new Regime Simplificado de Arrendamento Acessível (RSAA), also created by Decreto-Lei 97/2026, offers a full IRS exemption on the rental income where you let below-market — broadly, rent set at or under 80% of the local median price per square metre — on a minimum three-year contract for the tenant's permanent home. It replaces the older 2019 accessible-rent programme. If keeping the rent moderate suits you, this is the most generous option of all.

The electronic rent receipt — and the Modelo 44 alternative

For each rent payment you receive, you must normally issue an electronic rent receipt (recibo de renda eletrónico) through the Portal das Finanças. This is what feeds the AT its record of your rental income — and it is the paper trail a tenant can check to confirm their landlord has declared the lease.

There is one exemption. You do not have to issue electronic receipts if, cumulatively, you are not required to hold an electronic tax mailbox and your Category F income in the previous year did not exceed twice the IAS (the social-support index) — about €1,074 for 2026 — provided you did not opt in voluntarily. (Note: the old €838.44 figure sometimes still quoted online is out of date.) Landlords in this position instead declare their rents once a year on the Modelo 44 (Declaração Anual de Rendas Recebidas), filed electronically by the end of February of the following year.

Which expenses you can deduct

Under Article 41.º of the IRS code, you may deduct expenses you actually incurred and paid in relation to the property, provided you keep the supporting invoices and declare them in Anexo F. The main deductible costs are:

• Conservation and maintenance works (obras de conservação e manutenção)
• IMI, the municipal property tax
• Imposto do Selo paid on the lease contract
• Condomínio ordinary charges, for an apartment in a horizontally-owned building

Insurance premiums and the cost of the mandatory energy certificate are generally also accepted as deductible under the same article, though you should confirm the current treatment when filing.

Just as important is what you cannot deduct:

• Financing costs — mortgage interest and other financial charges are not deductible against Category F income (a common and expensive assumption for those used to other countries' rules)
• Furniture, appliances and décor (mobiliário, eletrodomésticos, artigos de conforto ou decoração)
• AIMI, the top-up wealth tax on high-value property
• Improvements that increase the property's value — only conservation and maintenance qualify, not upgrades

Stamp duty at the start of a lease

When a new lease begins, the landlord owes Imposto do Selo (stamp duty) of 10% of one month's rent — and again on the increment if a rent rise is later agreed by contract amendment. You declare it on the Modelo 2 do Imposto do Selo, communicating the lease by the end of the month after it starts, with payment due by the end of the following month. (As noted above, this stamp duty is itself a deductible Category F expense.)

The filing calendar

• IRS Modelo 3, Anexo F — your annual rental-income declaration, filed with the rest of your IRS return between 1 April and 30 June 2026 (for 2025 income).
• Modelo 44 — for exempt landlords not issuing electronic receipts: by the end of February.
• Modelo 2 (Imposto do Selo) — within the month after a new lease starts.

One line on Alojamento Local

If instead you let short-term to tourists under Alojamento Local, that income is taxed as business income under Category B — with its own simplified coefficient regime, VAT thresholds and registration rules — and none of the Category F rules above apply. Keep the two firmly separate; if you are registering a short-let, see our guide to registering an Alojamento Local.

The takeaways

• Long-term residential rent is Category F, taxed on net income after deductible expenses.
• For most landlords the effective autonomous rate in 2026 is now 10%, not 25%, thanks to the choque fiscal — with 5% for very long contracts and a full exemption under the new accessible-rent regime.
• Issue the electronic rent receipt unless you qualify for the narrow exemption and use Modelo 44 instead.
• Deduct IMI, stamp duty, condominium and maintenance costs — but not mortgage interest, furniture or improvements.
• Watch the April–June IRS window and the stamp-duty deadline at the start of each lease.

Portugal has spent the past two years steadily cutting landlord tax to coax more homes onto the long-term market, and 2026 is the biggest step yet. The paperwork, though, is unforgiving — so getting the receipts, the rate and the deductions right is what turns a lower headline rate into money you actually keep.