Portugal approves rental overhaul reducing eviction notice to two months

Parliamentary approval and party negotiations

The Portuguese parliament approved a broad rental market reform in its first reading on Wednesday evening, 30 September 2026. The legislation was submitted by the centre-right government led by Prime Minister Luís Montenegro as part of an ongoing strategy to address the national housing crisis. The draft passed its initial legislative hurdle following the abstention of the far-right Chega party, the second-largest political force in the assembly. Chega had raised objections during parliamentary debates but finalized an agreement with Montenegro's governing party on Wednesday to submit amendments before the final vote. In contrast, all left-wing opposition parties voted against the legislative package, arguing that the policy deprives tenants of fundamental protections.

New eviction rules and contract terms

The proposed legal overhaul alters eviction procedures and financial conditions for residential tenancies across Portugal. Under the provisions of the bill, property owners can initiate formal eviction proceedings after two months of unpaid rent, lowering the threshold from the current requirement of three months. The legislation also authorizes landlords to demand up to three months of rent in advance and removes existing ceilings on security deposits. In addition, the reform eliminates statutory rent caps on new lease agreements while providing tax bonuses for owners who place properties on the market. These measures complement a broader housing plan presented by Montenegro one year ago, which combined rental tax benefits with increased taxation on certain property acquisitions by foreign investors.

Market conditions and opposition criticism

The Montenegro administration designed the deregulation to address a shortage of available housing, arguing that thousands of residential properties remain vacant because owners fear legal insecurity and protracted eviction processes. Official statistics indicate that the median rent for newly signed lease contracts in Portugal increased by more than 10% year-on-year during the second quarter of 2026. The legislative shift drew immediate resistance from tenant advocacy groups, which condemned the reform as "savagery" and warned that removing deposit limits and rent caps will worsen housing insecurity. Left-wing lawmakers echoed those concerns, asserting that shorter non-payment eviction windows will accelerate tenant displacement rather than resolving supply bottlenecks.

Contrast with Spanish housing policy

Portugal's legislative overhaul represents the opposite approach to housing policy from neighbouring Spain. On Tuesday, 29 September 2026, the Spanish leftist administration of Prime Minister Pedro Sánchez issued a decree extending a ban on evictions of vulnerable tenants until 2030. The Spanish measure followed public demonstrations and the emergence of protest encampments in central Madrid and several other cities. Public anger in Spain intensified after the eviction of an 87-year-old Madrid woman whose apartment was acquired by a real estate investment company seeking a 275% rent increase. Spanish lawmakers are scheduled to vote on additional tenant protection decrees on Friday, 2 October 2026.