Renting a Shop or Office in Portugal in 2026: A Practical Guide to the Non-Residential Lease, the Five-Year Default, the Trespasse, and the 5 Percent Stamp Duty

Almost everything written in English about renting property in Portugal is about renting a home. The rules for renting a shop, a restaurant, a clinic, a studio or an office are different, they live in a separate subsection of the Código Civil (Civil Code), and the single most important thing about them is that most of them can be contracted away.

That freedom cuts both ways. A well-drafted commercial lease in Portugal can give a tenant far more than the law's default. A badly drafted one can leave a business with less security than a residential tenant would have. This guide sets out what the law actually says, what happens when the contract is silent, and the three taxes that catch people out.

It covers the ordinary modern case: an urban non-residential lease signed today. Leases that predate the 2006 reform sit under transitional rules of their own and are outside this guide.

Which rules apply

Article 1108 of the Civil Code sets the boundary. The non-residential subsection applies to urban leases for non-residential purposes, and, with the necessary adaptations and alongside the general civil-lease regime, to rural leases not covered by a special regime.

In practice a commercial lease is governed by three layers, in this order:

• What the contract says. For duration, termination, rent updates, charges and repairs, the parties' agreement comes first.
• The non-residential subsection, articles 1108 to 1113, which fills the gaps and imposes a small number of rules that cannot be contracted away.
• The general urban-lease rules, articles 1064 onwards, including the residential provisions that article 1110 imports where the contract is silent.

Form, and the licence problem

Article 1069 requires an urban lease to be in writing. If it was never reduced to writing and that is not the tenant's fault, article 1069(2) lets the tenant prove the lease by any means admitted in law, by showing use of the premises without the landlord's opposition and monthly payment of rent over a period of six months.

Article 1070 is the one that stops deals. An urban lease may only be granted over premises whose suitability for the contract's purpose is certified by the competent authorities, in particular through a licença de utilização (use licence) where one is required. A flat licensed for habitation is not licensed to be a shop. Signing a lease for a space whose licence does not match the intended activity is not a formality to sort out later; it is a defect in the contract, and the tenant is usually the party who cannot open. Check the use licence and the caderneta predial before you sign anything, not after.

Duration: five years is the default, not the rule

Article 1110(1) is blunt. The rules on duration, denúncia (termination on notice) and opposition to renewal in non-residential leases are freely established by the parties. Only where they stipulate nothing does the law step in.

Where the contract is silent, article 1110 provides:

• A fixed term of five years (article 1110(2)), and the tenant cannot terminate on less than one year's notice.
• Automatic renewal at the end of the term, for successive periods of equal length, or of five years where the agreed term was shorter (article 1110(3)).
• No landlord opposition in the first five years. Article 1110(4) states that in the first five years after the contract begins, whatever term was stipulated, the landlord may not oppose renewal.

That last provision is the most valuable thing in the whole subsection for a tenant, and it is the one most people do not know exists. It was added by Lei n.º 13/2019. It means a business signing a one-year commercial lease with automatic renewal still gets a floor of five years against the landlord's opposition to renewal, regardless of the short term on the page.

Notice periods, borrowed from the residential rules

Because article 1110(1) sends you to the residential regime where nothing is stipulated, the notice periods in articles 1097 and 1098 are the fallback.

For the landlord opposing renewal (article 1097), notice must be given before the end of the current term with a minimum of:

• 240 days where the term or renewal is six years or more;
• 120 days where it is one year or more and under six;
• 60 days where it is six months or more and under a year;
• one third of the term where the term is under six months.

For the tenant opposing renewal (article 1098), the equivalent periods are 120, 90 and 60 days, and one third of the term for terms under six months.

Article 1098(3) then gives the tenant something the landlord does not have. Once one third of the initial term or of a renewal has elapsed, the tenant may terminate at any time, with 120 days' notice where the term is a year or more, or 60 days where it is shorter. Termination under that rule takes effect at the end of a calendar month counted from the communication. Article 1098(4) adds that if the landlord blocks automatic renewal, the tenant may then terminate at any time on not less than 30 days' notice. Failure to respect the notice period does not stop the contract ending, but it does leave the tenant paying for the notice that was not given.

When the landlord can end a commercial lease, and what it costs

Article 1110-A is the hardest constraint in the subsection. In non-residential leases, the landlord may only terminate on notice in the cases in article 1101(b) and (c). Those are:

• (b) demolition, or remodelling or deep restoration works requiring the premises to be vacated, where what results is not equivalent premises in which the lease could continue;
• (c) notice to the tenant of not less than five years before the intended date of termination.

Article 1101(a), the landlord's own housing need, is not available against a commercial tenant. And where the landlord does terminate under (b) or (c), article 1110-A(2) requires the landlord to compensate the tenant and the establishment's employees separately for the losses that demonstrably result from the lease ending. The employees are a separate head of claim, not part of the tenant's.

There is one carve-out. Article 1110-A(3) removes the tenant's compensation entirely if the lease was the subject of a trespasse in the previous three years. Buying a business and then having the landlord terminate within three years is the scenario the legislature deliberately left uncompensated.

Where the ground is demolition or deep works, article 1103 sets out the procedure, and it is unforgiving: at least six months' notice stating the ground expressly, on pain of ineffectiveness; accompanied by proof that the urban-planning procedure has been opened and by a technician's statement of responsibility; then a confirmation accompanied by the works licence or prior-notice title and a municipal document certifying that the operation is a demolition or a deep remodelling. Miss a document and the termination simply does not work.

Rent, charges and repairs

Rent updates. Article 1077 says the parties stipulate in writing whether and how the rent may be updated. Absent stipulation, it may be updated annually using the coefficients in force, the first update falling one year after the contract begins, with at least 30 days' written notice of the coefficient and the resulting rent. A landlord who does not apply an update loses it, though the coefficients can still be applied in later years provided no more than three years have passed since the update first became possible.

Charges. Article 1078 is the trap. Absent agreement, current charges and expenses for goods or services supplied to the leased premises are the tenant's. But where the premises are an autonomous fraction of a building, article 1078(3) puts the charges for the administration, conservation and enjoyment of the common parts, and the payment of services of common interest, on the landlord. A shop tenant in a building with a condomínio should read the lease carefully: if it is silent, condominium charges are not the tenant's problem, and many draft leases quietly reverse that.

Repairs. Article 1111 leaves responsibility for ordinary and extraordinary conservation works to the parties. Where they agree nothing, the landlord executes conservation works and the tenant is deemed authorised to carry out works required by law or by the contract's purpose.

Termination for breach

Article 1083 lets either party terminate for the other's non-performance where its gravity or consequences make continuing the lease unreasonable. For a landlord, the listed grounds include breach of rules on hygiene, quiet and good neighbourliness or the condominium regulations; use contrary to law, morals or public order; use of the premises for a purpose other than the one contracted, even where the change of use causes no additional wear; not using the premises for more than a year; and any unlawful, invalid or ineffective transfer of the enjoyment of the premises.

Two thresholds do most of the work in practice. Article 1083(3) makes continuation unreasonable where the tenant is three months or more in arrears on rent, charges or expenses, or opposes works ordered by a public authority. Article 1083(4) adds repeated short delays of more than eight days.

Article 1084 gives the tenant a cure right: where the landlord terminates by communication for non-payment, the termination is undone if the tenant clears the arrears within one month. Article 1084(4) allows that once per contract, and once only. Article 1085 sets a limitation period of one year from knowledge of the facts, cut to three months where the ground is arrears or repeated delay. Article 1087 then requires the premises to be vacated one month after termination, unless another period is fixed judicially or agreed.

Subletting, and the two ways to hand a business on

Subletting requires the landlord's written authorisation (article 1088), though an unauthorised sublet is deemed ratified if the landlord recognises the subtenant as such.

The two transfer mechanisms that matter commercially do not need authorisation at all.

Trespasse. Article 1112(1) permits the transfer of the tenant's position by act between the living, without depending on the landlord's authorisation, in two cases: the trespasse of a commercial or industrial establishment, and transfer to a person who will continue to practise the same liberal profession in the premises, or to a professional company with an equivalent object.

Article 1112(2) says what is not a trespasse, and this is where deals fail. There is no trespasse where the transfer is not accompanied by the transfer, as a whole, of the installations, tools, stock or other elements making up the establishment; and there is no trespasse where the transfer is aimed at carrying on a different branch of trade or industry in the premises, or generally at putting them to another use. Buying an empty shell and calling it a trespasse does not transfer the lease. It is an unauthorised assignment, and under article 1083(2)(e) that is a ground for the landlord to terminate.

The rest of article 1112 is procedural and consequential: the transfer must be in writing and communicated to the landlord (paragraph 3); the landlord has a right of preference on a trespasse by sale or by dação em cumprimento (giving in payment), unless otherwise agreed (paragraph 4); and if the premises are later put to a different use, or the transferee does not continue the same liberal profession, the landlord may terminate (paragraph 5). That preference right works like the tenant's own direito de preferência: the landlord must be given the chance to match the deal.

Cessão de exploração, or locação de estabelecimento. Article 1109 covers the other route: the temporary, onerous transfer of the enjoyment of premises together with the operation of a commercial or industrial establishment installed in them. It is governed by the same subsection, with the necessary adaptations. Crucially, article 1109(2) says the temporary transfer of an establishment installed in leased premises does not require the landlord's authorisation, but must be communicated to the landlord within one month.

The choice between the two is not cosmetic. A trespasse is a permanent transfer of the tenant's position and triggers the landlord's preference right. A cessão de exploração is temporary, leaves the original tenant on the lease, and does not.

The three taxes

Stamp duty on the lease: 10 percent of one month's rent. Item 2 of the Tabela Geral do Imposto do Selo (General Stamp Duty Table) charges 10 percent on leases and subleases, calculated on the rent or on the agreed increase corresponding to one month. It also catches contractual changes that increase the rent, and a promissory lease once the premises have been made available to the tenant. For leases of under a month with no possibility of renewal or extension, it is charged on the rent stipulated for the whole period.

Stamp duty on a trespasse: 5 percent of the value. Item 27.1 of the same table charges 5 percent on the trespasse of a commercial, industrial or agricultural establishment, on its value. Item 27.2 charges the same 5 percent on subconcessions and trespasses of concessions granted by the State, the autonomous regions or municipalities. Five percent of a six-figure trespasse price is real money, and it is routinely left out of the buyer's budget.

VAT: exempt, with exceptions, and waivable. Article 9(29) of the Código do IVA (VAT Code) exempts the letting of immovable property. The exemption does not cover accommodation services supplied in the hotel business or in businesses with analogous functions, including campsites; the letting of areas for the collective parking of vehicles; the letting of machines and other fixed-installation equipment, and any other letting of immovable property resulting in the onerous transfer of the operation of a commercial or industrial establishment; the letting of safe-deposit boxes; and the letting of space for exhibitions or advertising.

That third exception is why a cessão de exploração is normally a VAT-taxable operation while a plain shop lease is not.

Article 12(4) of the VAT Code then allows a waiver. Taxable persons who let urban buildings or autonomous fractions of them to other taxable persons who use them wholly or predominantly in activities conferring a right to deduct may waive the exemption in article 9(29). Article 12(6) leaves the terms and conditions of that waiver to special legislation, and article 12(7) applies the ordinary deduction rules. For a business tenant that recovers VAT, a waived lease is usually neutral on cost and lets the landlord deduct VAT on works. For a tenant that cannot deduct, it is a straight 23 percent increase on the rent. Establish which side of that line you are on before you negotiate the rent, not after.

If the tenant dies

Article 1113 is short and often surprising. A non-residential lease does not lapse on the tenant's death. The successors may renounce the transfer by communicating the renunciation to the landlord within three months, with copies of the documents proving the event. Article 1107 applies with the necessary adaptations, so the transfer itself must also be communicated to the landlord within three months, and a successor who fails to do so is liable for all the damage caused by the omission.

A checklist before you sign

• Does the use licence cover your activity? Article 1070. This is the first check, not the last.
• What term is actually written, and does it renew? If nothing is stipulated, you get five years with automatic renewal. If a short term is stipulated, article 1110(4) still blocks the landlord's opposition to renewal for the first five years.
• Who pays the condominium charges? If the lease is silent and the premises are an autonomous fraction, article 1078(3) says the landlord. If the lease is not silent, read what it says.
• Who does the works, and who owns them at the end? Article 1111 defaults to the landlord for conservation, but fit-out and improvements are worth writing down explicitly.
• Is there a trespasse in your exit plan? If so, note the landlord's preference right, the 5 percent stamp duty, and the three-year window in article 1110-A(3) during which a terminated lease pays the tenant nothing.
• Is VAT waived? Ask before agreeing the rent, and confirm whether the figure quoted is with or without it.
• What did you pay stamp duty on? Ten percent of one month's rent on the lease; another 10 percent on any later increase agreed by amendment.

None of this replaces a lawyer for a lease worth a business. What it should do is stop the two failures that come up most often: signing a space whose licence does not permit the activity, and treating a trespasse as a handshake over a set of keys. The first is fixable only by the landlord and the municipality. The second is not a trespasse at all, and the landlord can end the lease over it.

If the relationship goes wrong, the routes out are the ordinary ones. Rent arrears and deposit disputes below the threshold can go to the julgados de paz; an unpaid judgment against a tenant leads to enforcement against pay and bank accounts; and a landlord facing a business that has stopped paying should understand what an insolvency filing does to the claim.