Portugal scraps rental price ceiling in sweeping market reform

The government has enacted a major overhaul of the rental market. The headline change: abolition of the 2% cap on rent increases when renewing a lease. This restriction had been in place since 2029, but has been removed three years ahead of schedule. Landlords and tenants can now negotiate market rates without state intervention.

Other key changes include: landlords may now demand a deposit equivalent to three months' rent instead of two, with the deposit ceiling removed entirely. The eviction procedure for non-payment has been shortened from three months to two. If a tenant misses payment by more than eight days on three or more occasions annually (or four times within 18 months), this now constitutes grounds for eviction.

However, the state has not abandoned vulnerable groups. A housing assistance fund has been established. Low-income families (assessed by social support index) can receive up to €2,300 per month for six months. Pensioners over 65 with annual income up to €64,400 benefit from a five-year transition period with protection against rent increases.

The reform still requires approval from the Portuguese parliament.