Portugal's government is preparing a major overhaul of rental law that would give landlords complete freedom to set rents, make it significantly easier to evict tenants who fall behind on payment, and move some of Portugal's remaining pre-1990 tenants, people on some of the cheapest, most tightly protected leases in the country, onto the modern rental regime, with the details depending heavily on a tenant's age and household income.
What's being proposed
According to reporting this week, the reform would end the current cap limiting annual rent increases to 2%, with rent values instead set freely between landlord and tenant. It would also remove the current limit on how many months' rent a landlord can demand as a security deposit. And it would make eviction considerably easier in cases of non-payment: under the proposal, a tenant who misses rent for two months could be issued an eviction order.
The most consequential piece, though, is what happens to Portugal's remaining "rendas antigas", leases signed before 1990, which have operated under a much older, far more protective legal framework ever since. Under the proposal, those tenants move onto the new rental regime (NRAU), but how and when depends on age and household income, not a single cutoff. Tenants under 65 with annual household income below €64,400 keep their current rent for a five-year transition period, adjusted only by the standard annual inflation coefficient. Tenants 65 or older with income below that threshold don't transition to the new regime at all, and keep their rent under the old rules indefinitely. Anyone above the €64,400 threshold, regardless of age, does transition, and their rent can be raised to 1/15th of the property's tax-assessed value (Valor Patrimonial Tributário), a formula that, for a typical old-regime apartment, could mean a very large one-time increase.
How big is "rendas antigas," actually
According to the 2021 Census, more than 151,000 homes in Portugal are still under lease agreements signed before 1990, about 16% of all rented housing nationally, with the largest concentration (46%) in Greater Lisbon. The rents involved are strikingly low: roughly 79% of these households pay less than €200 a month, and nationally, about 147,000 of these contracts sit below €100 a month, with tens of thousands below €50 or even €20. For comparison, the average rent in Lisbon today is around €403 a month, a figure that reflects existing contracted rents across the city, not the asking rents typically advertised for new leases, which in Lisbon frequently run well above €1,000.
Landlord groups have been pushing to end this system for years. The Lisbon Landlords' Association has called Portugal's rent freeze "the most shameful and oldest in the world," describing it as a policy that forces private landlords, not always wealthy people themselves, often families who simply inherited a building, to carry out a welfare function that should belong to the state. Even so, the same association has called the government's reform "timid, partial, and misleading" for keeping any income-based carve-out at all, arguing a household earning up to €64,400 a year, the threshold used elsewhere in the reform, isn't in genuine economic need.
Tenant groups see the reform very differently. Luís Mendes, vice-president of the Associação dos Inquilinos Lisbonenses, told the Lusa news agency that the eviction changes go further than his organization expected: "We are very critical of the measure, and never thought it would have this scope." The left-wing party Livre has criticized the broader package as a step backward for tenant protections, arguing it does nothing to slow the price increases actually driving Portugal's housing crisis.
The part that doesn't get talked about enough
Here's the angle that tends to get lost in the landlord-versus-tenant framing: these ultra-low, frozen rents were designed to protect the original elderly or vulnerable tenants who signed them decades ago, but Portuguese inheritance law has, at various points, allowed the tenancy itself, not just the rent, to pass down through a family.
Under the rules in force before 2006, when a tenant on one of these old leases died, the tenancy could transfer to a child who had lived with them for at least a year, regardless of that child's age, income, or need. That meant a chain of succession was legally possible: an elderly original tenant passes the lease to a surviving spouse, who later passes it to an adult child, who may by then be an established, financially comfortable professional in their 40s or 50s, still paying a rent frozen sometime in the 20th century for a flat in central Lisbon or Porto.
Lawmakers noticed this themselves. When the rental law was tightened in 2012, one of its explicit stated goals was to stop what Portuguese legal commentary at the time called "a eternização das rendas baixas", the eternalization of low rents, by restricting automatic transmission to descendants who qualify as minors, students under 26, or people with significant disabilities. But that tightening wasn't retroactive: successions that occurred validly under the older rules, before the law changed, generally still stand today. Which is how Portugal ended up with a small but real population of financially secure adults, not the vulnerable elderly the system was built to protect, legally holding some of the cheapest housing in the country's most expensive cities.
What it means going forward
If this reform passes largely as described, it would end that particular quirk going forward, since old leases would transition to the new regime rather than continuing to pass down under legacy rules. The government's stated rationale is straightforward: increase the supply of rental housing by giving landlords enough pricing freedom that it becomes worthwhile to formalize or re-let properties currently sitting outside the functioning market, whether vacant, informally occupied, or generating a token rent nobody would otherwise accept.
For tenants on modern, market-rate contracts, this proposal doesn't directly change your own rent, it's aimed at unwinding a legacy system, not renegotiating current leases. But easier eviction rules for non-payment would apply broadly, and if the reform does succeed in pulling more old-regime units onto the open market, it could meaningfully affect supply and pricing dynamics in the cities most affected, Lisbon above all.
This is a proposal at this stage, not enacted law, it will need to go through Portugal's parliament, where housing policy has been one of the most contested issues of the current term, and tenant groups and landlord associations are already lined up on opposite sides of it. Whether the reform actually pulls more housing onto the rental market, or simply produces higher rents and faster tenant turnover in the units already there, will be one of the central questions to watch as it moves through parliament.