Renting a House or Apartment in Portugal

The facts you need to know about renting a house or apartment in Portugal: the contract, the deposit, the lease and the legal obligations of the landlord and the tennant.

Property rentals in Portugal can be short-term, for a few weeks or months or long-term, for six months or longer.

Most estate agents offer short (or holiday) rental as well as long-term rental. Properties can also be found in the classified section of the newspapers, such as the Publico and the Diário de Notícias, in the English language publications such as the Portugal News or on specialised web portals.

Short-term Rentals

These are always furnished and it is relatively easy to find flats or houses of all sizes during the autumn/winter season, between October and Easter, especially in the coastal resorts. Many of these properties are in purpose-built self-catering holiday complexes, where agents will be looking to fill the winter season with short term tenants. Short-term rental prices tend to increase greatly in the summer season and landlords may be reluctant to extend the contract to include the summer months.

A contract will be necessary and the tenant usually will need to pay one month's rent in advance, with one month or two months as deposit. Utilities are usually included in the contract, although electricity may be metered on arrival and departure and settled separately.

Hotels may also be able to offer special extended stay prices over the winter.

Long-term rentals

There is an adequate stock of long-term rental properties in the major cities and their surrounding areas, ranging from studios to villas with swimming pool. They may be furnished (mobilado or com móveis) or unfurnished (sem móveis).

Prices depend on the size of property (number of rooms, or assoalhadas) and the official certification of the property as to age, quality and facilities. The quality of property can vary, a fact that is reflected in the monthly rental.

Most good quality rental property will have a kitchen equipped with appliances (cozinha equipada) and this will usually be specified in the advertisement
Service charges tend to be included in the amount specified for the rental
Fees for gas or electricity usually have to be settled as extras
Special attention should be paid to central heating; while all new properties now have central heating, this may not be not the case with older homes. Many properties, flats or houses therefore have open fireplaces. Where there is no central heating, tenants may also buy large portable gas heaters.

Contracts

Contracts can be for different durations but are most often for one year, renewable by mutual consent between landlord and tenant. In general, Portuguese law stipulates that there is a rule of automatic renewal of contract; the landlord can give notice only in certain circumstances determined by law.

The recently published New Law on Urban Rental (Novo Regime do Arrendamento Urbano - NRAU), Law Nº6/2006, of 27 February) stipulates that only some core details are needed for the rental contract:

Identification of the landlord and the tenant
Identification of the premises: address, entry in the Buildings Registry
The Licence for Usage as a dwelling (Licença de utilização): number and the public authority that granted the licence
Date of contract
Duration of contract
Amount of monthly rental

In addition, other information may be added, if agreed between landlord and tenant, such as the exact state of repair of the premises at the time of rental or the condominium rules and regulations, if applicable.

All contracts for a duration of six months or over should be in writing. The tenant may need an NIF number (número de identificação fiscal) and bank account details.

Insurance

By law, the landlord must have basic buildings insurance (seguro à habitação) against fire damage. It is also advisable that tenants take out their own household contents insurance.

Notice periods

The landlord may give notice for the following reasons:

The landlord or his family need the premises for themselves
The landlord intends to undertake major construction work (and has already been granted a building permit)

A landlord may also terminate the contract if:

The rent is not paid
The tenant uses or allows someone to use the premises for a purpose different to the one agreed with the landlord
The building is used for indecent and illegal practices
The tenant substantially changes the structure of the premises
The tenant sub-lets or loans, totally or partially, the building without the landlord's permission
The tenant receives from the sub-tenant an unlawful rent (the rent cannot be more than the amount contracted with the landlord plus 20 percent)
The premises are not used

The new legislation simplifies procedures for eviction of tenants who have not paid their rent for three months or more: the landlord does not need to start legal proceedings, as written communication with the tenant is sufficient in the eyes of the law. The tenant then has three months to pay up or move out of the property.

The tenant can stop the automatic renewal for the tenancy contract by giving notice, without specific reason. Notice periods are:

Contracts of over six years: six months
Contract of between one and six years: sixty days
Contract of between three months and one year: thirty days
Contracts for less than three months: one third of the duration

The new law also stipulates that if a property is in poor condition, a tenant can demand that the landlord make repairs. If the owner fails to do so, the tenant may acquire the property at the officially estimated value on condition that they undertake the repairs. If the repair work is not completed after a specified period of time, however, the property will be returned to the original owner.

Increase in rent

Portuguese law used to distinguish between "free" and "conditioned" rent regimes. While in the former, the landlord had greater freedom in setting the amount of rental, rents for older property that had been rented before 1990 were tied to a maximum ceiling. The new law has now abolished this practice and rents will gradually be increased to market value.

Increases for all types of rent are calculated as follows:

Every year, by an amount determined by the average rate of consumer index prices (without housing) over the previous 12 months
Every year, by agreement of all parties, if allowed by law
As a result of building works and improvements

Rental Incentive Programme for Young People

The Incentivo ao Arrendamento por Jovens, IAJ entitles young people under 30 to a grant from the Portuguese state to subsidise their rent, if they are tax payers and have filled in their recent tax statement.