The new concept of moderate rents created by Montenegro’s Government has been stirring up quite a bit of debate.

This is because those who rent out properties priced between €400 and €2,300 per month will be entitled to tax benefits, such as a reduction in IRS (personal income tax) from 25% to 10%. But, after all, how many homes in the national market fall under the category of moderate rents? Data from idealista/data reveal that eight out of ten homes available for rent in the summer of 2025 have rents between €400 and €2,300, covering most of the supply in major cities such as Lisbon and Porto.

One of the new measures from the “shock plan” of the Democratic Alliance (AD) Government, aimed at tackling Portugal’s housing crisis, involves replacing the affordable rent concept with the new idea of moderate rent, ranging between €400 and €2,300 per month. Landlords who rent out homes within these limits will benefit from a reduction in the IRS rate from 25% to 10%, provided that the rental contracts have a minimum duration of three years. In addition, those who invest in the construction or rehabilitation of properties to be rented at moderate prices will be entitled to a VAT reduction to 6%, as well as exemptions from IMI (municipal property tax) and AIMI (additional municipal property tax).

However, this new concept of moderate rent has generated considerable controversy within the real estate sector, which mainly criticizes the upper limit for being out of touch with the financial reality of most Portuguese families — and for potentially encouraging rent increases. The Government, on the other hand, argues that the €2,300 rent ceiling serves precisely to ensure that tax benefits are applied nationwide, including in areas where housing prices are under the greatest pressure, such as Lisbon and Porto. But is that really the case?

Moderate rent

Miguel Pinto Luz, Minister of Infrastructure and Housing – Getty Images

Lisbon and Porto have the highest supply of homes with moderate rents

idealista/news delved into the data to find answers. In the third quarter of 2025, there were over 43,000 homes on the Portuguese rental market, distributed across 79 municipalities with representative samples (that is, 50 or more properties). The vast majority of these homes — 81% of the total — are being rented at moderate prices between €400 and €2,300. The largest supply is found in Lisbon, Porto, Cascais, Vila Nova de Gaia, and Matosinhos.

In fact, almost all municipalities analyzed have more than half of their rental listings within the moderate price range — and therefore eligible for tax benefits for landlords. This includes the capital (73% of the municipal housing stock), Porto (91%), and Gaia (89%). Figueira da Foz stands out because all 233 homes available for rent there fall under the moderate rent range.

The only exception is Cascais. In this municipality, located in the Greater Lisbon area, the supply of premium rental homes (53%) exceeds that of moderate rent properties (47% of the total), according to the same idealista/data figures. Furthermore, there wasn’t a single home listed for under €400 in Cascais.

Supply of homes with moderate rents in Portugal

Total rental market supply in the 3rd quarter of 2025
Percentage of homes in each rent range relative to total municipal supply

Municipality Total homes for rent Homes under €400 Homes between €400–€2,300 Homes above €2,300
Lisbon 12,247 0% 73% 27%
Porto 6,661 0% 91% 9%
Cascais 3,264 0% 47% 53%
Vila Nova de Gaia 1,543 0% 89% 11%
Oeiras 1,262 0% 75% 25%
Matosinhos 1,231 0% 87% 13%
Sintra 1,054 0% 78% 21%
Almada 971 0% 88% 12%
Braga 898 1% 97% 2%
Coimbra 895 2% 98% 0%
Loulé 715 0% 56% 44%
Amadora 630 0% 98% 2%
Portimão 538 0% 85% 15%
Aveiro 517 1% 98% 1%
Loures 493 0% 87% 13%
Odivelas 478 0% 94% 6%
Setúbal 463 0% 93% 7%
Seixal 383 0% 84% 16%
Tavira 361 0% 87% 13%
Maia 352 0% 99% 1%
Albufeira 347 0% 69% 31%
Faro 340 1% 76% 24%
Mafra 337 0% 83% 17%
Leiria 325 2% 94% 4%
Funchal 322 0% 75% 25%
Gondomar 262 1% 93% 6%
Guimarães 257 2% 96% 2%

Data include 79 municipalities with representative samples (50 or more rental listings).
Table: idealista/news
Source: idealista/data
Created with Datawrapper

Homes with rents above €2,300 account for 19% of all rental listings in Portugal in the summer of 2025. Unsurprisingly, municipalities such as Lisbon, Cascais, Porto, Oeiras, and Loulé have the highest number of rental homes priced above the upper limit for moderate rents, meaning they are excluded from the tax benefits, according to the data. These high-rent homes represent 27% of Lisbon’s total supply but only 9% in Porto.

Meanwhile, those seeking to rent homes for under €400 per month — also outside the moderate rent definition and therefore not eligible for the 10% IRS rate on rental income — will find a very limited supply, representing less than 1% of the national total. Covilhã is the municipality with the highest share of low-rent homes (15% of its local market), followed by Paredes, Vila Real, and Bragança, where homes priced up to this amount represent 7% of the local supply in each. In contrast, in 49 municipalities, including Lisbon and Porto, there were no residential properties listed for under €400.