Renting a home to a company — to house a seconded employee, an expatriate executive or a seasonal worker — used to mean tax doubt: many landlords assumed they lost the reduced IRS (personal income tax) rate and paid 25% or even 28%.
On 22 September 2026, the Tax Authority (Autoridade Tributária, AT) confirmed, in a binding ruling (informação vinculativa), that the 10% rate also applies when the tenant is a company — as long as the lease meets precise conditions. This guide explains which ones, with the clause checklist and the sums worked out.
The essentials in 30 seconds
- Renting to a company can attract just 10% IRS (instead of 25%), according to an AT binding ruling dated 22 September 2026.
- The general rule (art. 45-C of the Tax Benefits Statute, EBF, created by Decree-Law no. 97/2026): 10% for any residential lease with rent up to €2,300/month, new and existing leases, rent from 1 January 2026 to 31 December 2029.
- With a company as tenant, the home must be the permanent residence of a person identified in the lease (name and NIF), and the lease must prohibit subletting and any commercial use.
- Rent above €2,300 → 25%. Home used as a registered office or an office → non-residential: 28%.
The general rule: 10% for residential leases up to €2,300
Decree-Law no. 97/2026 of 20 May added art. 45-C to the Tax Benefits Statute (Estatuto dos Benefícios Fiscais, EBF). Paragraph 1 sets the autonomous tax rate on rent from leases intended exclusively for housing at 10%, where the monthly rent does not exceed the legal limit, “unless a more favourable rate applies”.
The rate takes effect on 1 January 2026 (art. 18(2) of the decree-law), applies to rent received up to 31 December 2029 and covers leases already in progress. It does not require a minimum lease term.
Above the limit, the landlord only loses the reduced rate and goes back to the general autonomous rate of 25% for housing (long leases may already have lower rates). We explain the full regime, with a simulator, in our guide to the four landlord IRS rates in 2026.
The €2,300 limit and what counts as rent
The limit is 2.5 times the guaranteed minimum monthly wage for 2026 (€920), that is €2,300 (art. 2(2)(a) of DL 97/2026). It does not rise by itself with the minimum wage: under paragraph 3, it can be updated by a ministerial order (portaria) of the Finance and Housing ministries, using the rent update coefficient of art. 24 of the NRAU (the New Urban Lease Regime).
Art. 3 defines the monthly rent as the total amount paid, including furniture, equipment, ancillary parts and services, even if contracted separately. With several tenants the total counts, and the annual amount is divided by the months elapsed.
If the landlord is a company (subject to corporate tax, IRC) or has organised accounting under Category B, this rent counts for only 50% for tax purposes (art. 45-C(2) of the EBF).
There is also the RSAA (Regime Simplificado de Arrendamento Acessível, the Simplified Affordable Renting Regime), another regime in the same decree-law, with a full IRS exemption but more demanding: lower rent caps and a minimum duration of 3 years (annex III, art. 5). It should not be confused with the 10% rate.
What if the tenant is a company? The binding ruling of 22 September 2026
What remained unclear was the case where the tenant is a legal person. In 2024, the AT had taken the view that a home rented to a company to house workers was taxed at 28% (Observador, 22 November 2024). The new binding ruling, reported by ECO on 22 September 2026, extends the 10% to company tenants — with additional conditions.
The case analysed was that of a one-person company that rented a home for its partner-manager to live in.
Who this regime is for
It matters mainly to landlords whose formal tenant is a company, but where the person living in the home is a specific individual:
- Companies housing employees who have been relocated to another city;
- Expatriates and relocation arrangements, where the company signs the lease for the executive arriving in Portugal;
- Seasonal workers (agriculture, tourism, construction), when each home houses one identified worker.
Beware of shared houses. The published interpretation refers to the housing of one identified individual. A home shared by several workers, or with occupants who rotate without an amendment to the lease, is not clearly covered. In that case, ask the AT for your own binding ruling or consult an accountant before applying the 10%.
The conditions for paying 10% IRS when renting to a company
On top of the general rules (rent up to €2,300 and a residential purpose) there are requirements specific to a company tenant. According to the binding ruling cited by ECO, the AT requires, cumulatively:
- Exclusive housing of an identified person. The occupant, a worker or a member of the company’s governing bodies, is identified “by name and for tax purposes” (name and NIF). A generic reference to “an employee” is not enough.
- Rent up to €2,300/month. The same limit as the general rule. Above it, the lease remains residential but loses the reduced rate: the general regime of 25% applies.
- Express prohibition of subletting and other uses. The lease sets the “exclusive purpose of renting for the housing of the said individual” and the “express prohibition of subletting, assignment of the contractual position or any use of the property for commercial, industrial or service purposes”. The exclusivity must last for the whole lease.
- Lease reported to the AT. The lease — and any change to it — is declared on the Modelo 2 declaration, for stamp duty purposes.
Checklist: the clauses the lease must have
Before signing — or when reviewing a lease already in force — check that the text includes each of these points:
- Identification of the tenant company (name, NIPC company tax number, registered office and legal representative).
- Identification of the occupant: full name and NIF of the individual who will live in the home.
- Purpose of the lease: exclusively the permanent residence of the identified occupant.
- Monthly rent of €2,300 or less.
- Express prohibition of subletting (subarrendamento), whole or partial, and of assignment of the contractual position.
- Prohibition of any commercial, industrial or service use, including registering the address as the company’s registered office or establishment.
- Change of occupant only by written amendment, with the new name and NIF, reported to the AT.
- Termination by the landlord if the residential purpose is breached.
Subletting has its own rules even outside this regime — see the risks in subletting in Portugal.
28% vs 25% vs 10%: how much you pay on a €1,500 rent
Example: a home rented to a company for €1,500/month, that is €18,000 a year. The autonomous rates of art. 72 of the IRS Code and art. 45-C of the EBF give this result:
| How the lease is classified | Rate | IRS per year | You keep |
|---|---|---|---|
| Non-residential (home used as a registered office, an office or for business activity) | 28% | €5,040 | €12,960 |
| Residential, general autonomous rate (no access to the reduced rate) | 25% | €4,500 | €13,500 |
| Residential for an identified occupant, rent up to €2,300, clauses complied with | 10% | €1,800 | €16,200 |
Compared with 25%, the saving is €2,700 a year; compared with 28%, €3,240. By the end of 2029, the accumulated difference can exceed €10,000.
An important simplification: the calculation applies the rate to gross rent. In practice, the rate applies to net property income, after the deductible expenses in Anexo F (service charges, IMI, maintenance works, insurance).
Registration with the AT and the IRS return
The reduced rate depends on the paperwork being right. Three steps:
- Report the lease on the Modelo 2 declaration on the Portal das Finanças and pay stamp duty. See the deadlines in registering the lease with the AT and the rate in stamp duty on rentals.
- Report changes, such as a change of occupant, also by Modelo 2, with a written amendment.
- Declare the rent in Anexo F (Category F) of the annual IRS return. A tenant company with organised accounting withholds IRS at source: on rent covered by art. 45-C of the EBF, the withholding is 10% (art. 101(1)(f) of the IRS Code, as amended by DL 97/2026), not 25%.
What is still to be clarified
The binding ruling answers one specific case. These are points that the published text does not clarify and that you should confirm before deciding:
- homes with several identified occupants (for example, seasonal workers in a shared room);
- how frequently the occupant can change without calling the permanent residence into question.
A note on timing: the new rental law under discussion in 2026 (deposits, advance rent, evictions) is a separate process and is not yet in force. It does not change this IRS rate.
Frequently asked questions
Can I pay 10% IRS if the tenant is a company?
Yes. According to the AT’s binding ruling of 22 September 2026, the 10% rate applies even when the tenant is a company, provided that the home is used exclusively as the permanent residence of a person identified in the lease (name and NIF), the rent does not exceed €2,300/month and the lease prohibits subletting and any commercial use.
What is the maximum rent for the 10% rate?
€2,300 a month in 2026, equivalent to 2.5 times the guaranteed minimum monthly wage (€920). The rent includes furniture, equipment and services, even if contracted separately. Above that amount the general 25% rate for housing applies. The limit only changes by ministerial order.
Is it enough to write “housing for an employee” in the lease?
No. The AT requires the occupant to be identified by name and for tax purposes, with full name and NIF. A generic reference to an employee or a director is not enough.
What if the company uses the home as an office or registered office?
The lease loses its residential purpose and is treated as a non-residential lease, taxed at 28%. Partial use, or registering the address as the registered office, is enough for this to happen.
Until when does the 10% rate apply?
Decree-Law no. 97/2026 of 20 May applies the 10% rate (art. 45-C of the EBF) to rent from residential leases up to €2,300/month, new or already in progress, received from 1 January 2026 to 31 December 2029, with no minimum lease term.
Can I change the person living in the home?
The change should be made by a written amendment to the lease, with the new occupant’s name and NIF, and reported to the AT on the Modelo 2 declaration. Frequent changes can call the permanent residence into question: check with an accountant.
How much IRS does the tenant company withhold?
On rent covered by the 10% rate, a company with organised accounting withholds 10% at source (art. 101(1)(f) of the IRS Code), instead of 25%. The withholding is an advance payment of the tax, settled in the annual return.
Sources (the press articles are in Portuguese): Decree-Law no. 97/2026 of 20 May (Diário da República): arts. 2, 3, 5, 9 and 18; art. 45-C of the EBF; art. 101 of the IRS Code · ECO, 22 September 2026 · idealista, 22 September 2026 · Observador, 22 November 2024. More guides for landlords in the complete guide to renting in Portugal.
