Key facts
- Portugal's parliament approved a rental market overhaul in its first reading on Wednesday.
- The reform allows landlords to start eviction proceedings after two months of unpaid rent, down from three.
- The 2% cap on rent increases for new leases has been scrapped.
- Landlords can now request up to three months' rent in advance and unlimited security deposits.
- A Housing Emergency Fund will provide up to €2,300 per month for six months to families facing eviction.
Portugal's parliament has approved a significant overhaul of its rental market, aiming to stimulate the housing supply by speeding up evictions and removing rent controls on new leases. The reform, passed in its first reading on Wednesday, allows landlords to initiate eviction proceedings after just two months of unpaid rent, a reduction from the previous three-month grace period. Additionally, the 2% cap on rent increases for new tenancy agreements has been scrapped, with rents now to be freely set by parties involved.
The government, led by the centre-right, hopes these changes will incentivize landlords to put more properties on the market. However, the reform has drawn sharp criticism from tenants' associations, who have labeled the measures as "savagery" and warned of potential displacement. This contrasts with neighboring Spain, where the government has implemented measures to protect vulnerable tenants from eviction.
The general outline of the reform passed due to the abstention of the far-right party Chega, while left-wing parties voted against it. The new rules also include changes to advance rent payments, allowing landlords to request up to three months' rent in advance, and removing the ceiling on security deposits. To mitigate the impact on tenants, a Housing Emergency Fund has been established, offering support of up to €2,300 per month for a maximum of six months for those facing imminent eviction.