A Bill, not yet a law
On 9 July 2026, the Council of Ministers approved a Bill reforming the urban lease regime in Portugal. The word matters: bill. Under our system, a Bill goes to Parliament, where it is debated and voted on, unlike a Decree-LawA legal instrument that the Government can approve and publish directly, without a vote in Parliament, unlike a Bill., which the Government can publish without going through Parliament. The Council of Ministers’ statement uses exactly that term. This means that, for now, nothing has changed in the urban lease regime. Anyone signing or renewing a lease agreement today in Lisbon, Porto, Funchal, or anywhere else in the country remains subject to the rules currently in force, and it is by those rules that they should abide.
What the proposal already defines
The proposal has a clearly defined focus: it ends the cap that currently limits the initial rent amount in new lease agreements, a cap that had been set to remain in force until the end of 2029. It also strengthens the conditions under which a landlord can terminate a contract for non-payment, with the intention of combining the eviction request and the collection of overdue rent into a single proceeding. And it introduces a regime designed for lease agreements predating 1990, which cross-references the tenant’s age or degree of disability with their household income: anyone aged 65 or over, or with a disability rating of 60% or more, and an annual household income below €64,400, retains enhanced protection.
What is still not settled
There is, however, a part of the text that is still not settled. The exact default periods for terminating the lease agreement, the number of late payments that justify it, the new limits on deposits and advance rent payments. None of this is fixed in a final text. Different figures for the same measure can be found today depending on the source, and that is because the actual wording that will go to debate in Parliament has not yet been made public in its final version. What exists, for now, is a Government communications infographic, and an infographic summarizes a political intention. It does not replace the legal text that will come out of Parliament, possibly with amendments. Negotiating a lease agreement today already assuming those figures would be premature.
What I advise anyone negotiating a lease right now
I recommend that anyone negotiating a lease agreement stick to the regime currently in force, keep good documentation of everything agreed, and avoid clauses that attempt to anticipate a regime that has not yet been published. A clause along the lines of "the rent will automatically adjust once the new law comes into force" currently has no safe way of being drafted, precisely because there is still no certainty about the proposal’s final wording. Law No. 6/2006 itself, in its version currently in force, devotes an entire title to transitional rules, distinguishing contracts by date of execution in considerable detail. It is natural to expect this reform to bring an equivalent regime, but its final design will only be known once it is published in the Official Gazette.
The protections you already have today remain intact
For those already renting today, one clarification is worth making: none of the protections you already have are at stake. The minimum notice periods for a landlord to oppose renewal continue to range between 60 and 240 days, depending on the length of the contract. The transfer of the lease upon the tenant’s death remains protected under Articles 1106 and 1107 of the Civil Code. And the prohibition on harassment in leases, in force since 2019 and punishable by a daily fine, does not depend on the outcome of this proposal. For anyone drafting or reviewing a contract now, it is also worth reviewing the clauses that protect the landlord in an urban lease.
The proposal now moves on to Parliament, and it is natural that it will undergo changes throughout the parliamentary process. Until its publication, the law currently in force remains the basis on which any lease agreement signed or renewed today should rest. Horacio Baptista Ladera is following this reform closely and supports landlords and tenants in Lisbon, Porto, and Funchal in reviewing lease agreements before signing.
© 2026 Horacio Baptista Ladera. All rights reserved. Reproduction prohibited without prior authorization.
