Renting A Property In Portugal: Essential Expat Guide

When moving to Portugal, most people choose to rent before acquiring a property, as renting is transitory, implies a lower investment and allows them to explore the area and even the country, therefore being able to decide more confidently where they would prefer to settle.

This guide is written by Joana Torres Fernandes, a Partner at L.V.P. Advogados, a company that specialises in helping expats relocate to Portugal.

The rental market in Portugal

The national average rent amount in Portugal is currently around € 10.90/sqm – Lisbon metropolitan area being the only one in which the average is above it.

Among the most expensive areas to rent in Portugal are Porto, Algarve, Madeira Island and Setúbal. Obviously, these are the most wanted areas to rent in Portugal, as they combine the perks of living by the coastline even within urban cities, job offers and more infrastructures.

On the other hand, as Portugal is a small country, you may find a cheaper property in the interior region of Portugal and still have access to our lovely beaches in a 2 to 3- hour car ride. The Portuguese market has suitable offers for most needs and preferences.

Finding a property to rent: online vs in loco

Upon the decision to move to Portugal, even before travelling, you may start your search process online, directly on Agency websites or through tools such as Idealista or Imovirtual, which normally combine private and Agency advertisements.

This search is useful for you to get to know the Portuguese rental market and the type of properties available in different areas.

Furthermore, if you do not speak Portuguese (yet), it will be easier for you to communicate, as Real Estate agents usually speak English, know the market, and can also facilitate communication with the owner, especially when negotiating the conditions of the contract.

You may also decide to search for a rental property directly with the Landlord, driving around the chosen area, asking locals, or even checking “Aluga-se/Arrenda-se” advertisements on the properties.

It is more difficult and less efficient. However, you will be discovering the area, can visit the property immediately and may find a nice opportunity.

Unfortunately, for this alternative, a good knowledge of Portuguese may be needed especially in more interior areas, as not all Portuguese people speak English fluently.

You will find people with solid English-speaking skills mostly in the cities and touristic areas and services, such as restaurants.

Also, Portuguese people are known as being very welcoming and, even when we do not speak English, we will, for sure, try our best to understand and to be understood.

Renting process and documents required

When the first step – choosing a property – is completed, it is time to negotiate the conditions and draft the rental agreement (Contrato de Arrendamento).

It is strongly recommended to have legal assistance. The rental agreement shall be a written contract where all the agreed conditions are established, and this is also proof of the tenant’s entitlement to live in the property, and proof of address for official entities in Portugal.

How the rent is paid

In Portugal, rent is established and paid on a monthly basis, and it is very common to pay at least two months of rent in advance.

Some owners might ask for a bigger advance from foreign tenants, as they do not have proof of income nor any guarantors in Portugal. Nevertheless, the legal limit is three months’ rent in advance.

Rent in Portugal shall be paid on the first day of each month; however, the tenant is not found at fault until the eighth day of the month.

Deposits

Upon the beginning of the contract, it is also common to request payment of a deposit in the amount corresponding to one month’s rent.

Sometimes the owner requests a higher deposit amount, especially if the monthly rent is not very high. This serves as a guarantee for the payment of repairs that may be required.

This deposit shall be returned to the tenant upon the termination of the rental agreement, provided the property is in good condition.

The rental contract

Under Portuguese law, a rental agreement for habitation must have a minimum 1-year duration, although the tenant may terminate it earlier.

Should all parties agree, the rental agreement may be automatically renewable.

Other conditions shall be set out, such as who is responsible for payment of the utilities and if any furniture is included with the property rental. Usually, the landlord is responsible for paying condo fees.

It is mandatory for the tenant to have a Portuguese tax number, commonly known as “NIF” (even if a non-resident one), so that the landlord may register the rental agreement with the Portuguese Tax Authorities and issue the corresponding monthly rental receipts.

It’s a good idea to check the property title documents to ensure the landlord is the legitimate property owner!

Once the rental conditions are determined, the parties may sign the agreement. Then the landlord hands over the keys, and the tenant pays the set amounts.

Before signing, organise a joint inspection of the property, to see what state it is in and whether there are any defects so that the owner cannot attribute those to you in the future.

Termination of the rental agreement

The rental agreement may terminate due to the following:

• Its duration elapses;
• The landlord terminates it or doesn’t want to renew it;
• The tenant terminates it or doesn’t want to renew it;
• Both parties reach a termination agreement.

As for scenarios 2 and 3, the party that wants to terminate the contract must give notice in advance.

When the contract is terminated, ensure you and the landlord undertake a joint inspection of the property to confirm its status and conditions.

It’s a great idea to do so with a written report including photographic evidence, signed by both parties, to avoid any issues regarding the refund of the deposit amount.

In case the property is in the same conditions as when it was rented, then the landlord shall return the deposit in full to the tenant. In case some repairs are required, then the proportional amount shall be deducted from the deposit.

It is a common situation for tenants not to pay the last rent, assigning the deposit amount to such a purpose, however, it is not advisable to do so without prior agreement with the landlord.

Unfortunately, in Portugal rental matters are often taken to court because there are several situations that are not prevented in the rental agreement and lead to disagreement between parties.

However, if the rental agreement complies with Portuguese legislation, and the relationship with the landlord is well conducted and trustable from the beginning, you will most certainly be able to avoid complications.

If you need any help or advice on property or any other legal matters in Portugal, contact Joana here: Enquiry

You might find useful:

• Best Places To Live In Portugal – a detailed overview of Portugal’s most popular locations for expats.
• The Non-Habitual Residence Regime, Foreign Pensions And Tax In Portugal – how you can benefit from the low-tax regime when retiring to Portugal as an expat.
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