How do deposits and rental contracts work?

Renting in Portugal follows the Civil Code and the urban lease regime (NRAU). Leases for your home run for at least a year and renew automatically, and rent rises follow an official yearly coefficient. A reform bill is going through Parliament, so check the date of your contract.

Cash to move in

On a €1,500-a-month flat, expect the first month’s rent (€1,500), a deposit of two months (€3,000) and often one more month in advance (€1,500): €6,000, about £5,080, at signing. That is what our moving fund calculator assumes. The law lets a landlord ask for up to two months in advance and two months’ deposit.

Deposit and advance rent

Article 1076 of the Civil Code says rent can be paid in advance only by written agreement and for no more than two months, and the parties may secure their obligations “up to the value of two rents”. The deposit can be cash or another legal form of security, such as a bank-backed security. Portugal has no government deposit scheme: the landlord holds it. A guarantor (fiador) is common on top of the deposit.

How long the lease lasts

• A fixed-term lease for your permanent home can’t be shorter than 1 year or longer than 30 years. Shorter leases are allowed only for a stated temporary purpose, such as work, study or tourism
• Unless the contract says otherwise, it renews automatically at the end for the same period, or for 3 years if the term was shorter
• The landlord can’t block the first renewal until 3 years after signing, unless they need the home for themselves or their children
• To block a renewal, the landlord must give 240 days’ notice on a term of 6 years or more, 120 days on 1 to 6 years, and 60 days on 6 months to 1 year

Leaving: your notice periods

Early termination takes effect at the end of a calendar month. If you give less notice, you owe the rent for the missing period, except after involuntary unemployment, permanent incapacity or death. Renewing or ending a lease later on is covered in Should we renew our lease or move?

Rent updates

Unless the contract sets its own rule, rent can be updated once a year using the official coefficient, first one year after the lease starts. The landlord must tell you in writing at least 30 days ahead, with the coefficient and the new rent. INE (the national statistics office) calculates it from inflation excluding housing, and it is published in the Diário da República. For 2026 it is 1.0224 (2.24%, Aviso 23174/2025/2). For 2027 it is 1.0256 (2.56%, Aviso 24199/2026/2, published on 1 October 2026).

The lease must be registered

The landlord must declare the lease to the tax office (AT) on the Portal das Finanças by the end of the month after it starts, and pay stamp duty of 10% of one month’s rent. They must then issue electronic rent receipts (recibos de renda eletrónicos) each month. A registered lease lets you deduct rent in your income tax (IRS) and apply for rent support such as Porta 65. Since 1 August 2025 a tenant can report the lease themselves (Comunicação do Locatário) once the landlord’s deadline has passed.

Rent support

• Porta 65 Jovem: a monthly subsidy of a share of the rent for people aged 18 to 35 renting their permanent home. Since July 2024 you can apply before you have a lease
• Programa de Apoio ao Arrendamento (formerly Arrendamento Acessível): a state scheme for homes let at rents matched to household income
• Both need a registered lease and Portuguese tax residence; check the Portal da Habitação for the current rules

Bills and condominium charges

• Unless agreed otherwise in writing, running costs for the home (electricity, water, gas) are yours, and should be contracted in the name of whoever pays them
• Electricity: E-REDES runs the grid, and you choose a supplier (EDP Comercial is one of several). Compare offers on the ERSE (energy regulator) simulator. You need the meter’s CPE code
• Water is supplied by the municipality or its company; many flats have bottled gas or piped natural gas
• Condominium charges for the building’s common parts fall on the landlord, unless the lease says otherwise in writing
• Set up internet early: see How do I get a SIM, internet and call home?

Getting your deposit back

1. On day one, photograph every room and send the landlord an inventory
2. You can make small changes needed for your comfort, such as drilling for shelves, but must repair them before you leave
3. At the end, the landlord can deduct unpaid rent, bills or damage beyond normal wear, and should show receipts for repairs
4. The landlord should return the rest and give you a receipt (recibo de quitação). If not, write to them, then get legal advice or contact DECO PROteste