Lisbon Landlords Demand End to AIMI Property Tax and IRS Exemption for Student Rentals in 2026 Budget
The Lisbon Landlords Association (ALP) has formally submitted a package of ten policy proposals to the Portuguese Government and Parliament, aiming for their inclusion in the State Budget for 2026. The announcement, made on Monday, outlines a strategic initiative designed to address what the association calls a 'pandemonium' in the national housing and rental markets, caused by years of policies that have deterred private investment.
The primary objective of the proposed measures is to restore confidence among property owners and stimulate the supply of rental housing. According to the ALP, the current housing crisis cannot be solved by the state alone and requires the mobilization of private landlords through a more predictable and fair fiscal environment. The association's president, Luís Menezes Leitão, stated that '2026 must mark the turning point of this dramatic situation for everyone: a real shock of confidence in housing is needed.'
A central pillar of the ALP's plan is the 'immediate extinction' of the Adicional ao Imposto Municipal sobre Imóveis (AIMI). This surtax, which targets property holdings valued over €600,000, is described by the association as an 'ideological tax' that severely undermines investor confidence. The ALP argues that its annual revenue of approximately €150 million is negligible in the context of the state budget but its negative impact on investment is substantial. The tax was introduced in 2017 following a proposal by the Bloco de Esquerda party.
The proposals also call for an end to the long-standing freeze on rental contracts established before 1990, allowing for their transition to the New Urban Rental Regime (NRAU). To mitigate the impact on vulnerable tenants, the ALP suggests implementing 'new, truly social protection criteria.' This would focus subsidies on households earning less than three times the national minimum wage and whose housing costs exceed 35% of their income, thereby ending support for high-income tenants in rent-controlled properties.
To address the critical shortage of student housing, which the ALP estimates to be a deficit of 50,000 beds, the association proposes a complete IRS exemption for income derived from renting properties to students. This measure would require proof of university enrollment and would apply to the rental of entire properties as well as individual rooms, providing an urgent incentive to expand the available housing stock for students.
The policy package was sent to the cabinet of Prime Minister Luís Montenegro and all parliamentary groups for consideration in the upcoming budget discussions. The ALP contends that its proposals are fiscally balanced and, in many cases, would generate net revenue for the state by encouraging investment and formalizing more properties within the rental market. The association stressed that these changes are crucial for creating a stable and functional housing market for all.
The government has not yet issued a formal response to the proposals. However, the measures are expected to be a significant topic of debate during the concertation social meetings where the State Budget for 2026 will be negotiated with social partners. The success of these proposals will depend on the political support they can garner from the governing coalition and other parties in Parliament. Understand policy impacts on your Portugal property plans at realestate-lisbon.com.
