Until the end of 2023, property income was subject to a fixed tax rate of 28%, regardless of the possibility of aggregation, if applicable, unless it was assigned to long-term rental agreements.

With the implementation of the State Budget for 2024, income from residential rental contracts will now be subject to a reduced special rate of 25%, which is 3 percentage points lower than previously.

This rate reduction also encompasses income from permanent housing contracts, starting from the moment the annual cash payment becomes income or is deducted by the owner if the resident fails to fulfill their obligations.

Hence, concerning long-term leases, the following rates will be applicable:

  • For durations exceeding 5 years but less than 10: varying between 15% and 10%
  • For durations exceeding 10 years but less than 20: 10%
  • For durations exceeding 20 years: 5%

However, a special rate of 28% will persist for other rental contracts, specifically non-residential rental contracts, as well as for other types of property income, regardless of the possibility of aggregate the income, if applicable.

Tax Department

Sofia Quental | Inês Grácio | Flávia Almeida | Catarina Amaral