Investment Contracts for Residential Leasing

Investment Contracts for Housing Leases (CIA) allow for the structuring of long-term lease projects with tax incentives and protection of economic and financial equilibrium. Access to the scheme requires verification of the investor's and project's eligibility, the signing of the contract, and the continued fulfillment of legal and contractual obligations. This note summarizes the benefits, conditions, and main risks for investors and developers.

1. Legal framework

The Investment Contract for Leasing (CIA) is a contract entered into between the investor and the Institute of Housing and Urban Rehabilitation, IP (IHRU), representing the State. It grants stable tax benefits, for a period of 10 to 25 years, to projects for the acquisition, construction or rehabilitation of properties intended for residential leasing or leasing for residential subleasing.

• Authorization law: Law No. 9-A/2026, of March 6th.
• Substantive regime: Annex I to Decree-Law No. 97/2026, of May 20, effective from September 1, 2026. Corrected by Rectification Declaration No. 26/2026/1, of July 13.
• Regulation: Ministerial Order No. 447-A/2026/1, of September 30, in force since October 1, 2026, which regulates the application, investor requirements, procedure and obligations.

Legislative or regulatory changes that modify the system for setting and updating rents or other relevant contractual regimes and affect the economic and financial balance of the contracts covered entitle the investor to compensation, under the terms of Article 5 of the CIA regime and Article 282 of the Public Contracts Code. The application of this mechanism depends on the verification of the respective prerequisites.

2. Eligibility

2.1 Investor

Individuals, legal entities, or other entities that cumulatively meet the following requirements may enter into the CIA (Certificate of Investment in Capital):

• Technical and management capacity, proven by more than three years of experience in real estate investment or development, real estate management, or residential rental management. Also relevant is the experience of those who directly or indirectly hold at least 25% of the investor's capital or voting rights, of entities in which the investor holds a direct or indirect stake of at least 25%, and of members of their administrative, management, or executive bodies. A newly formed special purpose entity (SPV) can therefore fulfill this requirement through these individuals or entities, provided that the experience is proven.;
• organized accounting;
• Taxable profit not determined by indirect methods;
• Tax and social security contributions are up to date;
• Compliance with the general requirements for the respective activity.

With the exception of technical capability, these requirements must be maintained throughout the entire term of the CIA.

2.2 Investment and real estate

The acquisition, construction, or rehabilitation of buildings for residential rental or subletting is eligible, provided the following conditions are met:

Requirement	Condition
Minimal impact	At least 700/1000 of the total construction area is used for residential rentals.
Maximum income	2.5 times the projected RMMG for 2026: €2,300/month, subject to updates by decree. The limit also covers subletting.
Income update	In accordance with Article 24 of the NRAU, without exceeding the maximum limit.
Timeframe for allocation	Up to 5 years after signing (construction/rehabilitation); up to 1 year (acquisition of existing properties).
Minimum rental period	8 months for each full year of validity, unless there is a justified impediment.
CIA deadline	Minimum 10, maximum 25 years (or the term of the PPP, under Decree-Law No. 111/2012)

 

When the CIA (Affordable Housing Contract) is intended for affordable housing, the limits of the Simplified Affordable Housing Regime (RSAA) apply cumulatively.

3. Tax incentives

The scheme provides the following benefits, subject to legal conditions and the specific circumstances of each transaction:

 

Tax	Benefit
IMT	Exemption on the acquisition of land for construction and urban buildings for construction/rehabilitation, as well as urban or mixed-use buildings (or fractions thereof) for residential lease or sublease.
Stamp Duty	Exemption on the transfer of the same properties
Municipal Tax (IMI)	Exemption for up to 8 years, counting from the year of acquisition; reduction of 50% in the remaining period, subject to the time limit of article 16, no. 3, of Law no. 73/2013 and the applicable municipal resolution.
AIMI	Exemption for the entire duration of the CIA.
VAT — contracting	Reduced rate on works covered by item 2.42.2 of List I of the CIVA — 6% on the mainland. Application to eligible areas must comply with article 3, paragraph 3, of the CIA regime.
VAT — projects	VAT refund of 50% incurred on architectural and engineering services, projects and studies (excluding urban development works)
Stamp Duty — OIA	Reduction of 50% of the rate for item 29.2 of the TGIS, in proportion to the assets of the organization related to contracts covered by the CIA.

 

VAT refunds relating to services, projects and studies must be requested electronically from the second month following the issuance of the supporting documents and up to one year after that issuance (Article 3, paragraph 4, of the CIA regime).

Municipal condition: Exemptions from IMT (Property Transfer Tax) and IMI (Municipal Property Tax) and the 50% reduction in the IMI rate depend on a resolution of the municipal assembly, upon proposal of the municipal council, in accordance with Article 16, paragraphs 2 and 3, of the Local Authorities Financial Regime.

Cumulation with RSAA: If the CIA (Affordable Housing) is intended for affordable rental, the rental income may still benefit from exemption from IRS/IRC (Personal Income Tax/Corporate Income Tax) under the RSAA (Regulation on Affordable Housing).

4. Obligations of the promoter

4.1 Application

The application is submitted through the IHRU electronic platform and must include:

• Investor identification;
• Title to the property (ownership, surface rights, usufruct, or preliminary contract);
• Description of the investment and works, areas and projected number of dwellings;
• desired timeframe;
• Access codes for certificates from the Tax Authority and Social Security;
• Declaration under oath (Annex I of the Ordinance), which covers insolvency, money laundering, international sanctions (UN, EU, OFAC, United Kingdom), insurance and integrity.

Appreciation and signature

IHRU sends the draft proposal 20 days after the application or 10 days after its rectification. The draft is subject to government approval; the initial 20-day period does not correspond to the conclusion of the procedure. The application lapses if the investor does not rectify it within 30 days, does not accept the draft and submit the required elements within 90 days, or does not sign the contract within 30 days of its submission, in accordance with articles 4 to 7 of the Ordinance.

4.2 During the validity of the CIA

1. Maintain the minimum allocation of 70% of the area and the income limits; ensure lease agreements for at least eight months in each full year of the CIA's validity, unless there is a justified impediment.
2. Identify the dwellings in the application when there are no works or only conservation works without change of use. In cases of construction, extension, alteration, reconstruction or change of use, communicate the identification within 20 days after the establishment of the title relating to the use, in accordance with the RJUE and article 8 of the Ordinance.
3. Submit an annual performance report by the end of January each year.
4. Provide the information requested by IHRU and cooperate with IHRU and AT inspections.
5. Do not transfer the properties without simultaneously transferring the contractual position, which requires:
   • Prior notification to IHRU 20 days in advance;
   • Transfer of all properties;
   • eligibility of the transferee;
   • Express assumption of obligations, under penalty of nullity;
   • Authorizing order and addendum to the CIA.

The requirement for authorization constitutes a burden subject to land registration, which is handled free of charge by IHRU.

6. In residential subletting lease agreements, the clauses of Article 9 of the Ordinance must be expressly included: identification of the dwellings, exclusive allocation for residential subletting, rent limits in subleases, compliance with the RSAA (Regulation on Housing and Urban Development) when applicable, provision of information to the investor, and collaboration with the inspection authorities, including access to and sharing of data. The omission of these clauses constitutes grounds for termination by the landlord.

4.3 Resolution and reinstatement of benefits

The following are reasons for CIA resolution:

• The breach attributable to the investor;
• Failure to comply with tax and social security obligations;
• The unjustified refusal to provide information or the provision of false information.

The resolution determines the loss of benefits granted up to the date of notification and the restitution of the percentages below, plus compensatory interest. Payment is due within 30 days of notification, under penalty of enforcement proceedings (Article 7 of the CIA regime and Article 35 of the LGT).

Moment of default	Replacement
First 10 years of validity	100%
After 10 years and before the last 5 years	50%
Last 5 years of validity	30%

 

5. Preliminary checks and structuring of the investment.

• To verify the investor's eligibility, ownership of the property rights, and their ability to carry out the works and operate the lease for the entire duration of the CIA (Contract for the Improvement of the Capital).
• Confirm whether the municipality where the project is located has already decided on the exemptions from IMT (Property Transfer Tax) and IMI (Municipal Property Tax).
• Confirm the applicable income limits, including any updates by decree, and test the financial viability of the project with these limits and the anticipated vacancy periods.
• Confirm the publication of the ordinance (housing/justice) regarding the land registry of encumbrances.
• Validate the VAT treatment of the construction project with a certified accountant.

The investment exit structure must be defined from the outset: the transfer of real estate requires coordination with the assignment of the contractual position, the eligibility of the acquirer, and the authorization stipulated in the regime. The financial simulation must include the risk of replacing benefits.

Sources

• Law No. 9-A/2026, of March 6 — Official Gazette
• Decree-Law No. 97/2026, of May 20 — Official Gazette
• Decree No. 447-A/2026/1, of September 30 — Official Gazette

Rectification Statement No. 26/2026/1, of July 13 — corrections to Decree-Law No. 97/2026

Official documents consulted

https://diariodarepublica.pt/dr/legislacao-consolidada/decreto-lei/2026-1124729375

https://diariodarepublica.pt/dr/detalhe/portaria/447-a-2026-1174840973

https://diariodarepublica.pt/dr/detalhe/declaracao-retificacao/26-2026-1146287134

Legal notice

This notice is for informational and general purposes only, referring to the legal framework in force at the date indicated. It does not constitute legal, tax or any other type of advice, nor does it replace the analysis of the specific case by a lawyer or other qualified professional. Beyond Legal assumes no responsibility for decisions made based solely on the information contained herein.