Since 2026, income from residential rent up to €2,300 a month is taxed in Portugal at 10%. Above that, the usual 25%. So lowering the rent can pay more than keeping it.
Monthly rent2 500 €
1 500 €2 300 €2 760 €3 500 €
At 2 500 €/month · 25% tax — net per year
22 500 €
At 2 300 €/month · 10% tax — net per year
24 840 €
Golden zone: lowering to 2 300 € paysLower the rent to 2 300 € and you keep 2 340 € more per year, and the flat lets faster.
Simplified: rent × 12, no deductible expenses (IMI, condominium, repairs) and no englobamento. Not tax advice — your contabilista will do the exact figures.
Lower rent — higher income
Mr Manuel lowers the rent — and wins. Tap 🔊 for sound. Animation created with AI.
Where the line isWith a rent between €2,301 and €2,760, the landlord does better by lowering it to €2,300. At €2,760 the net is the same either way; above that, keeping the rent and paying 25% pays more.
4 rules
The cap is €2,300 a month in 2026: 2.5× the minimum wage, updated every year.
€1 over the cap and the whole rent goes to 25%, not just the excess.
The 10% rate applies to income earned from 01.01.2026 to 31.12.2029.
Law: Decreto-Lei 97/2026 of 20 May 2026, article 45-C of the EBF.
For two years we rented a two-bedroom flat in Funchal at €2,500 a month. After we left, it went back on the market at €2,300. We were surprised at first, then ran the numbers: €22,500 versus €24,840 net per year.