Thinking about Renting a house in Portugal? Renters, in Portugal are facing a time finding a house due to market changes happening there recently. 

The rise in tourism has led to short term rentals and the surge in property prices due, to investments has made it harder to find affordable long term rentals. 

This article looks into why rental properties are becoming scarce and expensive in Portugal and how the changing economic situation is affecting both locals and newcomers looking for a place to live there.

Why is Renting in Portugal Becoming so Difficult in 2025?

A combination of factors has made long-term renting in Portugal increasingly difficult. The main reasons include:

Rising Immigration

Portugal has become a top destination for expats, digital nomads, and remote workers. Cities like Lisbon, Porto, and the Algarve continue to attract newcomers, pushing demand far beyond supply. By 2025, the foreign resident population has reached almost 1.6 million, adding significant pressure to the rental market.

Growth of Short-Term Rentals

With tourism consistently rising, many property owners choose to list their homes on platforms like Airbnb instead of offering long-term leases. Short-term rentals are often more profitable, but they reduce the housing stock available for residents.

Shortage of Affordable Construction

Developers tend to focus on luxury projects aimed at international buyers, as they generate higher returns. This shift has left a gap in affordable and mid-range housing, meaning new construction is not meeting the needs of long-term renters.

Rental Legislation

Recent rules offer strong protections for tenants but provide less flexibility for property owners. Some landlords avoid long-term rentals because they fear potential difficulties if a tenancy relationship goes wrong.

Portugal Golden Visa

Programs such as the Portugal Golden Visa and attractive tax policies encouraged a wave of foreign property investment. While beneficial for the economy, they contributed to rising prices and reduced the availability of affordable rentals for locals.

What Has Been Done to Make Renting in Portugal Easier?

Portugal has introduced several important measures in recent years to ease pressure on the rental market and make long-term housing more accessible. One of the biggest changes was ending the Golden Visa route through real estate. By removing property purchases from the program, the government aimed to reduce speculative investment that had pushed prices up in major cities, allowing more homes to return to the local and long-term rental markets.

Another significant step was the tightening of short-term rental rules. In key urban areas with high housing demand, new Alojamento Local licenses are now heavily restricted. This shift encourages property owners to move away from tourist rentals and make their homes available for long-term tenants instead.

Portugal also decided to phase out the NHR (Non-Habitual Resident) program and replace it with a new incentive scheme called IFICI, often referred to as “NHR 2.0.” This new regime is more restrictive than the previous one and is designed to attract highly qualified professionals who contribute directly to the Portuguese economy, rather than focusing on pensioners or remote workers as the old program did.

What Should i Know Before Renting in Portugal

Before renting in Portugal, it’s important to be well prepared. The market moves fast, and the better organised you are, the higher your chances of securing the property you want. Here’s what you should keep in mind:

High demand and fast-moving listings

Portugal’s rental market is highly competitive, especially in Lisbon, Porto, and the Algarve. Good properties don’t stay available for long, so acting quickly and being diligent is essential. If you hesitate, someone else—better prepared—will secure it before you do.

Documents Required for Renting in Portugal

Landlords almost always require proof of income, such as payslips, bank statements, or tax returns. If you’re self-employed, you may need to show invoices or business accounts. Without evidence of stable income, many landlords will not feel confident proceeding with your application.

Upfront payments

Be ready for substantial upfront costs. It’s common to pay two months’ rent plus two months’ deposit—around four months of rent in total. Non-residents may face stricter conditions, such as providing a Portuguese guarantor or paying an additional month in advance.

Rental contract duration

Most rental contracts run for at least 12 months. While shorter agreements exist, landlords generally prefer longer terms for security. Offering a two- or three-year commitment can make your application more attractive, especially if you’re competing with other potential tenants.

Renting Prices in Portugal

When looking for a place to rent in Portugal, you’ll notice a big difference in prices between the major cities and the rest of the country. The most expensive city to rent a property is definitely Lisbon, where prices can reach around €20 per square metre. If you’re looking for a more affordable option, you’ll need to explore the interior regions of the country, where rental costs are significantly lower.

For more videos about investing or moving to Portugal, explore our YouTube channel here: YouTube Channel Portugal Residency Advisors®.

Tips for Renting in Portugal

  • Prepare all your documents early to speed up your application.
  • Act quickly when a good listing appears.
  • Reply fast to agents or landlords to stay ahead of other applicants.
  • Have funds ready for deposits and upfront payments.
  • Offer a longer contract term to strengthen your proposal.
  • Stay flexible with neighbourhoods to find better options.
  • Schedule property visits as soon as possible.
  • Check the condition of the property carefully during the viewing.
  • Confirm what is included (furniture, appliances, utilities).
  • Read the rental contract thoroughly before signing.

How We Can Help You

Local Expertise

We know Portugal. Due to our extensive local knowledge, we believe that concentrating our services in a single country destination is the best way to give you the most thorough and useful information. 

Holistic Approach

We offer a streamline communication channel for the entire process, delivering a comprehensive service that encompasses all facets of your real estate investment journey, including property search, negotiation, legal matters, due diligence, and property management.

Independent Service

As an independent buying agent, we have the flexibility to collaborate with any agent, seller, promoter, or developer, providing you access to all available options in the real estate market. This enables us to objectively analyze every opportunity and find the right property for you at the best price, free from complications.

Simple Process

Technology plays a significant role in our company, allowing us to provide you detailed property market information and minimize our clients’ involvement in paperwork. As customers ourselves, we understand how to best serve your needs.

Your Questions Answered

Yes, foreigners can rent with just a passport, but most landlords will also ask for a NIF (Portuguese tax number) and proof of income.

Not always, but many landlords request a Portuguese guarantor if you don’t have local income. If you don’t have one, they may ask for extra months of rent upfront instead.

Most landlords ask for one or two months of rent plus a security deposit, but non-residents may be required to pay three to four months upfront.

The landlord is responsible for registering the rental contract with the Portuguese Tax Authority, not the tenant.

Yes, the contract can be in your wife’s name. If both of you will live there, some landlords prefer adding both names, but it’s not mandatory.

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