How is rental income from a property abroad taxed in Portugal?

Keeping the flat back home and letting it out is the most common piece of foreign income a new Portuguese resident brings with them. Portugal taxes residents on worldwide income, so the rent follows you.

The rate depends on what you let, not on where it is

Rental income is Category F. The special rate is 28 percent in general and 25 percent for residential rentals, and you can instead opt to aggregate the income with the rest of your earnings and pay the progressive rates, which in 2026 run from 12.5 percent on the first 8,342 euros to 48 percent above 86,634. Aggregation only helps when your total income is modest enough for your marginal rate to land below the special rate, and it is a choice made for the year, not line by line.

Two countries, one property

Most double taxation conventions let the country where the property is located tax the rent from it, and Portugal has 79 conventions signed with 78 in force. That does not take the income off your Portuguese return. Portugal taxes it as well and gives you a credit for the foreign tax you actually paid, limited to the Portuguese tax on that same income. If the foreign rate is lower than the Portuguese one, you top up the difference here.

Read your own convention rather than a general rule. The text decides which state taxes what, and no summary on any website substitutes for the article that covers your country.

What we cannot tell you

How much of your foreign running costs Portugal will let you set against the rent is the point we are not going to fill in with a plausible number, because we have no dated rule for it that we can stand behind. Bring your mortgage interest, maintenance, management fees and local property tax to a contabilista and get the deductible list in writing before your first return.

Filing it

Foreign rental income goes on Anexo J of the Modelo 3, filed between 1 April and 30 June of the year after the income year, with tax due by 31 August. Keep the foreign assessment and proof of payment, because the credit is only worth what you can evidence.

If you hold IFICI, foreign source income is exempt from Portuguese tax except for pensions and income from blacklisted jurisdictions, so foreign rent is one of the categories the regime actually shelters. Check eligibility before you restructure anything.