Lisbon Landlords Association Proposes Scrapping AIMI Tax and Rent Freezes in 2026 Budget
The Lisbon Landlords Association (ALP) has presented the Portuguese Government and Parliament with a comprehensive package of ten policy measures intended for inclusion in the 2026 State Budget (OE2026). The proposals, announced this week, aim to address the country's persistent housing crisis by restoring investor confidence and normalizing the rental market after what the association describes as "years of erratic policies." The central objective, according to the ALP, is to trigger a "confidence shock" that will mobilize private property owners and increase the supply of available housing.
A key demand from the association is the "immediate extinction" of the Adicional ao Imposto Municipal sobre Imóveis (AIMI), a property surtax introduced in 2017. The ALP has long criticized the AIMI as an "ideological tax" that unfairly targets housing assets. In its official statement, the association argues that the tax, which generates approximately €150 million annually for the state, does more harm than good by deterring both domestic and international investment in the property sector. Luís Menezes Leitão, president of the ALP, emphasized that its abolition is a critical first step toward rebuilding trust with property owners.
The policy package also calls for an end to the long-standing freeze on rental contracts established before 1990. According to data from a government study cited by the ALP, these frozen rents still apply to 16% of the national rental market, causing an annual loss of over €600 million for landlords. The association proposes a transition of these contracts to the new urban rental regime, coupled with direct state subsidies for tenants who are financially vulnerable, ensuring that social support is not administered "via landlords." This change, the ALP contends, would correct a significant market distortion and promote fairness.
In the submitted documents, Menezes Leitão stated, "The State does not have the time or resources to solve the housing crisis alone. It is urgent to mobilize private property owners and restore predictability and fiscal justice. Without confidence, there are no houses." This sentiment underscores the ALP's belief that private sector participation is essential for resolving the housing shortage. The association maintains that its proposed measures are balanced and would not impose significant costs on the state, suggesting that many would, in fact, generate revenue by stimulating investment and bringing more properties to the market.
Further fiscal measures are also outlined in the ten-point plan. The ALP is pushing for a full IRS exemption on income from properties rented to students, presenting it as an "urgent response to the deficit of 50,000 beds in higher education." Other proposals include the exemption of Stamp Duty on new rental contracts, allowing landlords to deduct essential maintenance expenses from their income tax, and expanding the "mínimo de existência" (a minimum subsistence income level for tax purposes) to benefit landlords with low revenues or certified disabilities.
The association frames these proposals as a necessary pivot away from emergency subsidies and toward creating a stable and just foundation for the housing market. "Congelating rents is perpetuating injustices. Blindly taxing those who invest is killing the supply," Menezes Leitão summarized. "If we want more houses for families, we have to give a clear signal of confidence. The 2026 Budget is the opportunity to change course." The government has not yet issued a formal response to the proposals, but the initiative from the ALP is expected to feature prominently in the upcoming debates surrounding the 2026 State Budget. Understand policy impacts on your Portugal property plans at realestate-lisbon.com.
