Affordable rent · RSAA
Affordable rent in Funchal: RSAA rent ceilings
Under the RSAA, the monthly rent in Funchal cannot exceed €620 for a T0, €794 for a T1, €1,034 for a T2 or €1,273 for a T3. In return, the rent is exempt from IRS.
- Official source: Diário da República
- Portaria n.º 454/2026/1
- Data of 22 October 2026
Key figures
Monthly ceilings in Funchal
The T2 ceiling ranks 6th highest of 308 municipalities and 1st of 11 in Madeira.
- T0, maximum rent per month
- €620
- T1, maximum rent per month
- €794
- T2, maximum rent per month
- €1,034
- T3, maximum rent per month
- €1,273
Simulator
Work out the ceiling for your property
The ceilings
Rent ceilings by size in Funchal
| Size | Ceiling | +10% parking | +10% class A or A+ | +20% both |
|---|---|---|---|---|
| T0 | €620 | €682 | €682 | €744 |
| T1 | €794 | €873.40 | €873.40 | €952.80 |
| T2 | €1,034 | €1,137.40 | €1,137.40 | €1,240.80 |
| T3 | €1,273 | €1,400.30 | €1,400.30 | €1,527.60 |
| T4 | €1,393 | €1,532.30 | €1,532.30 | €1,671.60 |
| T5 | €1,632 | €1,795.20 | €1,795.20 | €1,958.40 |
Cumulative uplifts (art. 2(4)). Above T5, add €100 per bedroom beyond the fifth: a T6 has a ceiling of €1,732.
The ceiling against the Funchal market
The T2 ceiling (€1,034) is 5% below the market estimate: letting at the ceiling costs the landlord about €56 a month. The quartiles of the T2 estimate run from €765 to €1,420: the ceiling sits between the 1st quartile and the median. With private parking and class A or A+, the T2 ceiling rises to €1,240.80 and covers the estimate.
| Size | RSAA ceiling (€/month) | Market est. (€/month) | Difference | Ceiling (€/m²) | Market (€/m²) |
|---|---|---|---|---|---|
| T1 · 48 m² | 794 | 740 | +7 % | 16.54 | 15.42 |
| T2 · 85 m² | 1,034 | 1,090 | −5 % | 12.16 | 12.82 |
| T3 · 115 m² | 1,273 | 1,240 | +3 % | 11.07 | 10.78 |
Aluseg estimate, not an official figure: INE median of €13.17/m² (2025, 1,131 new leases) × INE size ratio of the municipality itself × reference floor area. See the Funchal rental market.
The ceiling against income in Funchal
A person on the median income in Funchal receives €1,130 a month after income tax (INE, 2024). The T2 ceiling (€1,034) takes 92 % of that income, against 97 % for the market rent (€1,090). For a couple on two median incomes, 46 % against 48 %.
Income per person after income tax, not household income: see how we read this number.
Looking for an affordable-rent home in Funchal?
Ask the landlord whether the lease will be in the RSAA (they file it with the IHRU, art. 6) and check the advert: up to €794 for a T1, €1,034 for a T2.
Municipal programme
Municipal Rental Programme - Habitar Funchal (Programa Municipal de Arrendamento - Habitar Funchal, Regulamento n.º 572/2025)
The Habitar Funchal municipal rental programme, aimed at middle-income households, mainly young people, who can access neither the private market nor social housing, with the rent capped at 35% of household income according to the municipality's communication.
Information checked on 22/10/2026 on the official website: see the official page.
IRS saved at the ceiling in Funchal
A T2 in Funchal let at the ceiling earns €12,408 a year. Outside the RSAA, IRS on that gross rent would reach €3,102 (25% rate) or €1,240.80 (10% rate, for rents up to €2,300 a month). Under the RSAA, the tax is €0.
| Size | Rent at the ceiling (€/month) | Rent per year (€) | IRS at 25% (€/year) | IRS at 10% (€/year) | IRS under the RSAA (€/year) |
|---|---|---|---|---|---|
| T0 | 620 | 7,440 | 1,860 | 744 | 0 |
| T1 | 794 | 9,528 | 2,382 | 952.80 | 0 |
| T2 | 1,034 | 12,408 | 3,102 | 1,240.80 | 0 |
| T3 | 1,273 | 15,276 | 3,819 | 1,527.60 | 0 |
| T4 | 1,393 | 16,716 | 4,179 | 1,671.60 | 0 |
| T5 | 1,632 | 19,584 | 4,896 | 1,958.40 | 0 |
Gross rent, no deductible expenses. Exemption: art. 6 of annex III. Rates: Landlord IRS in 2026.
Ceilings in Madeira
Funchal has the 1st highest T2 ceiling of 11 municipalities in Madeira. It is the highest in the district, €136 above Ponta do Sol. The lowest is Calheta (€504). The district median is €898: Funchal is 15% above the median.
| Municipality | T0 (€/month) | T1 (€/month) | T2 (€/month) | T3 (€/month) | T2 market, est. (€/month) | Difference |
|---|---|---|---|---|---|---|
| Funchal | 620 | 794 | 1,034 | 1,273 | 1,090 | −5 % |
| Ponta do Sol | 539 | 690 | 898 | 1,106 | – | – |
| Porto Moniz | 539 | 690 | 898 | 1,106 | – | – |
| Porto Santo | 539 | 690 | 898 | 1,106 | 730 | +23 % |
| Ribeira Brava | 539 | 690 | 898 | 1,106 | 510 | +76 % |
| Santana | 539 | 690 | 898 | 1,106 | – | – |
| São Vicente | 539 | 690 | 898 | 1,106 | – | – |
| Santa Cruz | 486 | 623 | 810 | 998 | 875 | −7 % |
| Machico | 364 | 531 | 671 | 784 | 495 | +36 % |
| Câmara de Lobos | 365 | 467 | 608 | 749 | 600 | +1 % |
| Calheta | 280 | 392 | 504 | 587 | 535 | −6 % |
From the highest T2 ceiling to the lowest. Market: Aluseg estimate from INE data; – = no data.
Rent under the RSAA with everything in order
Lease, Tax Authority and rent receipts in a free account.
FAQ: affordable rent in Funchal
What is the maximum rent for a T2 in Funchal under the RSAA?
€1,034 a month, the 6th highest ceiling in the country. With private parking or an energy certificate of A or A+ it rises to €1,137.40; with both, to €1,240.80.
Is the T2 ceiling in Funchal above or below the market rent?
It is 5% below the Aluseg estimate for an 85 m² T2, about €1,090 a month (INE, 2025).
How do I get the IRS exemption?
Report the lease to the Tax Authority and file it with the IHRU by 15 January of the following year. See the RSAA guide.
What if the rent goes over the ceiling?
The exemption is lost from the breach and the tax is settled with compensatory interest (art. 7 of annex III).
Sources and methodology
Source: Portaria n.º 454/2026/1, de 13 de outubro (PDF) and Decree-Law 97/2026, annex III, read on 22 October 2026. Uplifts calculated by us (art. 2(4)). For information only, not legal or tax advice.