One of the most significant tax-relief packages for residential letting in recent years is now in force. Decree-Law no. 97/2026, of 20 May — Tax relief measures to promote housing supply — creates the Simplified Affordable Letting Regime (RSAA) and reshapes a set of benefits aimed at owners who place property on the rental market.
For an owner considering letting, and for an investor structuring an income portfolio, the message is direct: accepting a rent cap in exchange for substantial tax relief may be more profitable than charging market rent subject to ordinary taxation.
What the RSAA is
The RSAA is a voluntary regime granting privileged tax treatment to residential tenancy agreements whose monthly rent does not exceed the maximum limits set per municipality. Those limits are defined by reference to the median rent per square metre, under article 2(2) and (3) of the decree-law.
The logic is the familiar one of controlled-rent schemes: the State forgoes tax revenue, the landlord forgoes part of the market rent, and the tenant accesses housing at a moderate price. Joining therefore requires an arithmetic exercise first — establishing the applicable cap for the municipality and property type — before deciding whether it pays.
The tax incentives
Rental income taxed at 10%. Property income obtained under the regime benefits from a reduced autonomous rate of 10%, applicable until 31 December 2029. This is a substantial cut against the general autonomous rate and, above all, against aggregation into progressive personal income tax rates.
IMT and Stamp Duty exemption on the acquisition of property intended for this letting, on the terms and conditions of the decree-law.
IMI exemption on properties allocated to the regime, which the law allows for up to eight years, as well as a 50% IMI reduction in eligible situations and AIMI exemption.
Reduced indirect costs, notably the application of item 2.42.2 of List I annexed to the VAT Code (reduced 6% rate on eligible works) and a 50% reduction of item 29.2 of the General Stamp Duty Table.
The combined effect is material: on an income property, the difference between taxing rent at 10% with IMI exemption and taxing it in the ordinary way may represent, over the benefit period, a relevant share of the net return on the investment.
When it makes sense — and when it does not
The regime tends to pay off where the affordable-rent cap is close to the market rent achievable for the property — a frequent situation in municipalities where the median is not far above the legal limit, or for properties whose location and condition would not command top rents in any event. There, little is lost on gross rent and much is gained on the tax burden.
Conversely, for premium properties in high-rent areas, the cut imposed on rent may exceed the tax saving. The decision is case by case and requires a numerical comparison between two scenarios: market rent under ordinary taxation versus capped rent taxed at 10% with the associated property-tax benefits.
What to do now
Owners with vacant property, or considering buying to let, have three useful steps. First, establish the rent cap applicable to the municipality and property type. Second, model both tax scenarios using the property’s real figures (rent, IMI, costs), to measure the net benefit. Third, ensure the tenancy agreement and the formal conditions for joining are properly documented from the outset, since the benefit depends on continued compliance.
For those structuring an acquisition, it is also worth combining the RSAA with the capital-gains exclusion for reinvestment in rental housing, also created by Decree-Law no. 97/2026.
Letting, or buying to let? Paulo Silva Silva, Lawyer, helps frame the operation and coordinate the regime with your tax adviser, before signing. Book a meeting or contact geral@advpaulosilvasilva.com · +351 916 055 901.
This article is general in nature and does not constitute legal or tax advice. Decree-Law no. 97/2026, of 20 May, the applicable rent limits and the specific conditions of each benefit should be confirmed in the version in force in the Diário da República before any decision.