Mid-Term Rentals in Portugal : Rules, Contracts, and Legal Obligations

Mid-term rentals (between 1 and 12 months) are gaining popularity in Portugal, especially in major cities like Lisbon, Porto, Faro, and Braga. This format caters to a specific audience seeking a furnished property for a temporary period without committing to a multi-year lease :

• Professionals on assignment (temporary projects, relocations, secondments)

• Families in transition (moving homes, renovations, etc.)

• International students (Erasmus exchanges, internships)

• Expats settling in (while searching for a permanent home)

• Remote workers and digital nomads (temporary “workation” stays)

Souvent mal connue des propriétaires, la location moyenne durée se distingue autant de la location touristique que du bail longue durée classique. Elle répond à une logique spécifique et doit respecter un cadre juridique et fiscal strict. Contrairement à certaines idées reçues, ce n’est ni une zone grise ni un “entre-deux” non encadré, mais un format juridiquement sécurisé à condition d’être correctement structuré et déclaré.

A clear legal framework for rentals from 1 to 12 months

The term “mid-term rental” does not explicitly appear in the Portuguese Civil Code. It is not an autonomous legal regime but rather a practical designation for furnished fixed-term leases—typically between 30 days and 11 months—outside the tourist accommodation scope. In reality, this rental type falls under the contrato de arrendamento habitacional com prazo certo (fixed-term residential lease), legally based on Articles 1022 and following of the Código Civil, as well as Law no. 6/2006 (New Urban Lease Regime), amended notably by Law no. 13/2019, which reinforced tenant protections.

While Portuguese law generally imposes a minimum duration of one year for residential leases, it makes exceptions for non-permanent use agreements signed for specific reasons (professional, educational, or other temporary purposes). Mid-term rentals fit precisely into this framework: a 3-, 6-, or 10-month lease is fully legal, as long as the contract explicitly states the temporary nature of the occupancy.

This format does not require an Alojamento Local (AL) license—the regime for tourist rentals—provided certain conditions regarding the purpose of the lease and the tenant’s profile are met. The fact that a rental lasts less than one year does not automatically make it “touristic”: the context, actual use, and precise contract wording are what determine its classification.

The written contract to be used: a prazo certo for non-tourist residential use

A mid-term rental must always be formalized by a written fixed-term contract, signed for a pre-agreed period (2 months, 5 months, 8 months, 11 months, etc.—freely defined by the parties). This is a furnished fixed-term residential lease, subject to the legal provisions for temporary housing contracts. For validity, the contract must clearly state :

• Duration and dates – Explicit mention of start and end dates, with no automatic renewal. By default, Portuguese law automatically renews leases under 3 years until they reach three years, unless otherwise specified. It is therefore essential to state that the lease will not renew automatically. Example :

  « O presente contrato tem início em 1 de outubro de 2025 e termina em 30 de junho de 2026, nos termos do artigo 1095.º do Código Civil, não se renovando automaticamente. »

• Purpose of occupation – The property must be rented for residential use of a temporary, non-touristic nature. It must be fully furnished and ready to occupy (equipped kitchen, bedding, basic furniture). No hotel-like services (daily cleaning, flexible check-in/check-out, breakfast, etc.) should be included—these would fall under Alojamento Local rules. The contract should specify the temporary reason for the stay (professional, study, training, personal relocation, etc.) to justify the absence of a tourist license. Example:

  « A presente locação destina-se exclusivamente a fins habitacionais de natureza temporária, não estando enquadrada no regime jurídico do Alojamento Local. O arrendatário encontra-se em Portugal por razões profissionais, pelo que não se trata de uma estadia turística. »

  
  

In short, you should use a standard residential lease, adapted for a temporary stay. A well-drafted contract—clearly stating the fixed term and the non-touristic nature—will protect the landlord in case of a tax inspection or legal dispute.

*Note: Under Portuguese law, the tenant may terminate a fixed-term lease early under certain conditions (after at least one-third of the term has elapsed, with legal notice—e.g., 60 days for contracts under one year). This right should be anticipated in the contract, although it does not affect the principle of the agreed fixed term.

Landlord’s tax and administrative obligations

Contrary to what some landlords believe, mid-term rentals are not informal. They are subject to the same tax and reporting rules as any other residential lease. Specifically, the landlord must :

• Register the contract with the Finanças (Autoridade Tributária) – The lease must be registered within 30 days of signing via the Portal das Finanças (form Modelo 2 de Comunicação de Contrato de Arrendamento).

• Pay the Imposto do Selo – A stamp duty equal to 10% of one month’s rent, paid once when registering the contract online.

  (Example: for a monthly rent of €2,000, the Imposto do Selo is €200.)

• Issue recibos eletrónicos de renda – Every month, the landlord must issue an electronic rent receipt through the tax portal. This is mandatory even for private landlords and serves as the official proof of payment reported to the tax authority.

• Close the contract at the end of the term – When the rental ends, the landlord must record the termination of the lease in the tax system to stop the automatic issuance of monthly receipts and avoid inconsistencies in tax filings.

Failure to comply with these obligations (late registration, unpaid stamp duty, missing receipts, etc.) can result in administrative fines and the contract being considered fiscally invalid. While these steps may seem tedious, they are essential for the lease to be valid in the eyes of the authorities.

(If you hire a professional property manager, they can handle all these procedures on your behalf.)

A simple yet strict tax regime

Income from mid-term furnished rentals is taxable whether you are an individual or a company, and it must be declared.

• Private landlord (individual) – Rental income is classified as rendimentos prediais (property income) and declared under Category F of IRS. In 2025, it is taxed at a flat rate of 25% on the net amount (after deducting eligible expenses such as IMI property tax, management fees, maintenance work, mandatory fire insurance, etc.). You may opt for the progressive IRS scale (taxed together with your other income at your marginal rate) if this is more advantageous. The reduced rates for long-term leases (15%, 10%, 5% depending on duration) do not apply here since the term is under 5 years. In short, mid-term rental income is generally taxed at the full 25% rate, unless the general scale option yields a lower amount.

• Corporate landlord (company) – If the property is held through a company (Lda or SA), rental income is included in the taxable profit and subject to IRC (corporate income tax) at the standard 21% rate. The company can deduct all rental-related expenses (furniture depreciation, accounting fees, management commissions, repairs, etc.), which reduces taxable profit.

In all cases, residential furnished rentals are exempt from VAT. Only rentals offering para-hotel services (frequent cleaning, guest services, etc.) may fall under Alojamento Local, which can be VAT-liable. A standard residential lease, even short-term, remains outside VAT scope.

Specific contractual obligations for the landlord

Even for a temporary rental of just a few months, the landlord has contractual obligations comparable to those of a standard lease, which must be strictly observed :

• Property in good condition, equipped and furnished – The rented unit must be decent, safe, and ready for immediate occupancy by the tenant. This generally includes a functional kitchen (basic appliances), complete furniture (bed, tables, storage), and operational electricity, water, and internet. A detailed move-in inspection and furniture inventory are highly recommended to avoid disputes upon departure. The landlord remains responsible for structural repairs and major breakdowns throughout the lease, as in a long-term rental.

• Security deposit (caução) – It is common to request a deposit from the tenant, generally equal to 1 or 2 months’ rent. Portuguese law sets a maximum of two months’ rent for this caução. Its purpose is to cover possible damage to the property or unpaid rent at the end of the lease. The amount must be returned to the tenant at the end of the contract, after a satisfactory move-out inspection and verification that there is no damage or rent arrears.

• Utilities and consumption – Regular utilities (water, electricity, gas, internet) may be included in the rent (flat rate) or billed separately based on actual usage. If you choose an “all-inclusive” rent, it is highly recommended to set a reasonable consumption cap in the contract, beyond which the tenant will have to reimburse the excess. For example, the lease may stipulate that electricity bills are included up to €100 per month, with any excess paid by the tenant. This precaution encourages responsible consumption and prevents abuse. Conversely, if utilities are billed separately, be sure to clearly state the billing and payment terms (invoice presentation, due dates, etc.).

• Routine maintenance – It is standard to assign minor repairs and routine upkeep to the tenant. For example, replacing lightbulbs, remote control batteries, or kitchen hood filters is typically the tenant’s responsibility. Major repairs (boiler, air conditioning, structural plumbing) fall to the landlord unless the damage was caused deliberately by the tenant.

If the tenant fails to meet obligations (unpaid rent, abnormal damage, etc.), the law allows the landlord to request early termination of the contract through legal action, with possible damages or enforcement of guarantees. It is essential to include in the lease all necessary termination clauses: causes for termination, reduced notice in case of serious breach, potential deductions from the deposit, late payment penalties, etc. A well-drafted contract protects the landlord in such dispute situations.

In the event of non-payment or refusal by the tenant to vacate the premises

A "prazo certo" medium-term lease ends on the agreed date, with no possibility of automatic renewal (unless expressly provided otherwise). The tenant has no right to automatic extension beyond the fixed term. If the tenant refuses to leave at the end of the lease, the landlord may initiate a despejo (eviction) procedure through the courts. Due to the fixed-term nature of the lease, eviction is generally simpler and faster than for an open-ended contract—especially if all formal requirements were met in advance (written contract registered with the Finanças, monthly receipts issued, documented payments). Portugal has a Balcão Nacional do Arrendamento (National Tenancy Desk) that streamlines such eviction proceedings for unpaid rent or non-compliance with lease termination.

In cases of repeated rent arrears or serious property damage, the landlord may also initiate early termination before the original end date. The law provides that a tenant in default for more than 3 months, or repeatedly late with payments, loses the right to remain in the property. In practice, for a short-term lease, it is often simpler to wait for the contract to end and not renew it. However, if the situation requires it, the landlord can invoke termination clauses and request a court-ordered eviction during the lease term. Again, having an officially registered contract and transparent financial records strengthens the landlord’s position before the court.

Do not confuse with Alojamento Local: beware of legal risks

A landlord who signs a “civil contract” for 30 or 60 days with a passing tourist, thinking they can bypass Alojamento Local (short-term rental) regulations, exposes themselves to severe penalties. If the actual use is touristic (booking via a holiday platform, leisure stay with services, tenant in tourist mode), the tax or municipal authorities can reclassify the activity as illegal lodging. In other words, a medium-term lease misused for temporary tourist accommodation constitutes a disguised and unauthorised Alojamento Local.

The consequences of such reclassification can be severe: administrative and tax fines, VAT reassessment, obligation to immediately cease the activity, or even suspension of the right to rent the property for a given period. Furthermore, in case of an incident or neighbour complaint, the landlord will be in a weak legal position, having failed to comply with the proper legal framework. It is therefore essential to restrict medium-term rentals to serious, legitimate tenants (interns, employees on assignment, students, expatriates, temporarily relocated families, etc.) and to clearly state in the contract both the reason for the stay and the non-touristic nature of the rental. This precaution shields you from potential compliance issues.

Practical example : a well-structured medium-term rental in Lisbon

Let’s take the example of a landlord renting a furnished T2 apartment in Lisbon to a French executive on a 6-month assignment (from October to March) at a monthly rent of €2,000. The contract is drawn up in full compliance with the law, including a clause specifying the temporary residential purpose and a fixed 6-month term with no automatic renewal. The lease is reported to the Finanças within 30 days of signing; the Imposto do Selo (€200, equal to 10% of one month’s rent) is paid online; an electronic rent receipt (recibo eletrónico de renda) is issued every month via the tax portal, and the tenant pays by bank transfer.

At the end of the contract, the tenant vacates the apartment on the agreed date. Water and electricity consumption remain within the limits set in the contract; the 2-month security deposit (caução) is returned in full after a satisfactory move-out inspection; and the landlord closes the lease record on the Finanças portal. The rental income is then declared under Category F in the landlord’s annual IRS return.

Result : the operation was carried out in full compliance with the law, the landlord secured six months of rent without incident, and the property is now available for a new lease or for the owner’s own use.

A High-Potential Opportunity, Provided It’s Tightly Managed

Medium-term rentals meet a growing demand for flexible furnished housing in Portugal’s major urban areas. For landlords, they strike a balance between short-term tourist rentals and long-term leases, offering several key advantages:

• Optimized returns – Monthly rents in medium-term arrangements are often higher than in unfurnished long-term leases, due to the furnished nature of the property and the flexibility offered to tenants.

• Reduced vacancy – Stays lasting several months lower turnover compared to weekly rentals, while avoiding prolonged vacancy periods that can occur between short-term tourist bookings.

• Owner flexibility – Unlike a 3-year renewable lease, the landlord can recover the property relatively quickly (e.g., after 6 or 9 months) and adjust the rent or repurpose the property (sell it, move in, or switch to a tourist rental if market conditions change) more freely.

• Fewer constraints than AL – No tourist license required, no tourist tax to collect and remit, and no daily management such as check-ins/check-outs. It generally attracts a more stable clientele, often more respectful of the property than short-stay tourists.

However, these benefits only materialize if the landlord takes a professional, structured approach. Medium-term rentals require strict administrative consistency, a solid contract, complete fiscal registration, and close attention to legal compliance. The risks of non-compliance are real: reclassification as an illegal rental, financial penalties, inability to evict an undesirable occupant quickly, lengthy and costly legal disputes, and more. In other words, landlords should not improvise in this segment without proper preparation—underscoring the value of guides like this one, or the support of professional property managers.

Airnest REIM : Your Partner for Securing Your Medium-Term Rentals

At Airnest REIM, we support property owners every step of the way to get the most out of medium-term rentals—with complete peace of mind. When you entrust us with the management of your furnished property, we handle the entire process and all legal obligations on your behalf:

• Drafting a tailor-made contract fully compliant with legal requirements (duration clauses, purpose of stay, guarantees, etc.)

• Fiscal registration of the lease (Modelo 2 declaration on the Portal das Finanças) and payment of the initial Imposto do Selo

• Monthly issuance of recibos eletrónicos de renda and secure rent collection

• Administrative closure of the lease at its end date and full departure management (final inspection, security deposit return)

• Monitoring tenant compliance with contract clauses during the rental period (maintenance, utilities, condominium rules, etc.)

• Full operational management of the property on a daily basis (tenant relations, maintenance, technical interventions if needed, etc.)

  
  

With our legal and operational expertise, we secure your rental income while ensuring full compliance with Portuguese regulations. You enjoy all the advantages of medium-term rentals—without the administrative headache. In other words: we structure, we declare, we manage—while you simply collect your rent in total peace of mind.

(To learn more or discuss your 1–11 month furnished rental project, feel free to contact the Airnest REIM team—we’re here to advise you.)