Rent or buy in Lisbon: calculator, 2026

How the comparison works

The calculator follows two households living in the same kind of home for the same number of years. One rents. The other buys with a mortgage and sells at the end. For each of them it adds up what they pay out and subtracts what they still hold when they leave, and compares the two net costs.

• Renting: twelve months of rent a year, rising each year by the rent increase you choose. Nothing comes back at the end.
• Buying: the purchase costs (IMT, 0.8% stamp duty, Casa Pronta deed and registration, a lawyer at 1% plus VAT, 0.6% stamp duty on the loan and bank fees, exactly as in our purchase costs calculator), mortgage interest, IMI, condominium charges and maintenance of 1% of the value a year. At the end the home is sold, 5% of the sale price goes on selling costs, the remaining loan is repaid, and the equity left over is counted back.
• Cash not spent: the renter does not need the down payment and the purchase costs, and in most years spends less each month. If you enter a return, that money is assumed to be invested, and its earnings reduce the net cost of renting. In years when renting would cost more than owning, the buyer invests the difference instead.

The capital part of the mortgage is not a cost: it builds equity, which you get back on sale. That is why the result usually swings towards buying the longer you stay. The break-even year is the first year in which selling would leave the buyer better off than the renter. The table under the result shows both net costs year by year.

What drives the result in Lisbon

Prices against rents

Homes in the municipality of Lisbon sold for a median of €5,192/m² in the 12 months to June 2026 (INE). New lease contracts were signed at a median of €17.79/m² a month in the 2nd quarter of 2026 (INE, released 29 September 2026), or €213.48/m² a year. A typical home therefore costs about 24.3 years of its rent, a gross rental yield of about 4.1%. The two INE series measure different homes in different periods, so the ratio is a guide, not a valuation, but it explains why renting often looks cheaper in the first years: the rent buys the same use of a home as an interest and tax bill that, at 4.5%, is larger.

The calculator starts from an 80 m² home on both medians: a price of €415,360 and a rent of €1,423 a month. Medians differ by parish, from €3,850/m² in Santa Clara to €7,254/m² in Santo António on the sale side, so replace both with the figures for the home you have in mind.

The costs of the purchase

IMT and stamp duty are paid once, on the day of the deed, and never come back. On the default home they add up to about €22,788 for a resident buying a permanent home. With a lawyer, the Casa Pronta fee of €700 for a purchase with mortgage, the 0.6% stamp duty on the loan and bank fees, the total is €31,423, about 7.6% of the price. Selling costs of 5% at the end come on top. These one-off costs are spread over the years you stay, which is why buying for two or three years almost never pays.

The 7.5% rule for non-residents

A buyer who is not tax-resident in Portugal and never has been pays IMT at a flat 7.5% of the whole price (Decreto-Lei 97/2026, since 25 May 2026). On €415,360 that is €31,152 instead of €19,465, so the purchase costs rise to €43,110. Choose that status in the calculator to see the effect. If you move to Portugal within two years and live in the home, the difference can be refunded on request; for spouses married in community of property, the 7.5% applies only if neither has ever been resident.

Rates, rent rises and prices

The default mortgage rate of 4.5% is roughly the 12-month Euribor of 3.331% (23 September 2026) plus a bank spread of about 1.2. The default rent increase is the legal update coefficient for 2027, 2.56% (Aviso 24199/2026/2 of 1 October 2026), because a lease signed now is first updated in 2027; for 2026 it was 2.24% (Aviso 23174/2025/2). The coefficient caps the yearly update within a running lease; a new lease is priced at the market, and INE recorded new-lease rents in Lisbon 5.1% higher than a year earlier. The price change defaults to 0%: we do not forecast prices. Lisbon sale medians rose 14.7% in the year to June 2026, but past growth is no guide to the next ten years.

IMI is charged on the tax value (VPT), which in Lisbon is usually well below the price. The calculator assumes a VPT of half the price unless you enter the real one from the caderneta predial, and applies the Lisbon rate of 0.3% (2025 tax year): about €623 a year on the default home.

Worked example with the defaults

A tax-resident household buys an 80 m² home for €415,360 as its permanent residence, with 20% down (€83,072) and a loan of €332,288 at 4.5% over 30 years. The monthly instalment is €1,684. Purchase costs are €31,423: IMT €19,465, stamp duty €3,323, Casa Pronta €700, lawyer €5,109, stamp duty on the loan €1,994 and bank fees €832. Each year the owner also pays IMI of €623 (on a VPT of €207,680), condominium charges of €960 and maintenance of €4,154.

In the first year the owner pays out about €2,162 a month against a rent of €1,423. Over ten years, with prices flat and rents rising 2.56% a year:

• Renting costs €191,837 in rent.
• Buying costs €245,436 net: €31,423 of purchase costs, €135,878 of interest, €57,366 of IMI, condominium and maintenance, and €20,768 of selling costs. After the sale and repaying the €266,128 still owed, the owner keeps €128,464.

Renting is about €53,599 cheaper over ten years in this case. Buying only comes out ahead in year 18:

The answer is sensitive to a few inputs. This is how it moves when one of them changes and everything else stays at the defaults:

Figures rounded to the euro, computed with the same formulas as the calculator. Prices are the biggest lever: a modest yearly rise turns the result within the first decade, while a return on the cash not spent pushes it the other way.

What the calculator leaves out

It is an estimate, not advice. It does not include life and buildings insurance, AIMI, tax on a gain when you sell, furniture or moving costs, and it treats the rate as fixed for the whole period. It also cannot price what does not show up in money: the security of owning, the freedom to move, or the risk that a landlord sells. Use it to see which assumptions matter for you, then check the numbers for a real home before you decide.

For the purchase itself, see the guide to the cost of buying in Lisbon; for prices by parish, the Lisbon property price index.

Questions about renting or buying in Lisbon

Is it cheaper to rent or buy in Lisbon?

It depends mostly on how long you stay and what prices do. With our defaults (an 80 m² home at the INE medians, 20% down, 4.5% over 30 years, prices flat) renting costs about €191,837 over ten years and buying about €245,436 net, and buying only comes out ahead from year 18. If prices rise 2% a year, buying is ahead from year 8.

What is the rent for a typical home in Lisbon?

New lease contracts in Lisbon had a median of €17.79/m² in the 2nd quarter of 2026 (INE, released 29 September 2026), 5.1% more than a year earlier and the highest of the large municipalities. For 80 m² that is about €1,423 a month. Asking rents on portals are usually higher than contract rents.

How much can my rent go up each year in Portugal?

Within a running lease, the yearly update follows the legal coefficient unless the contract sets another rule: 2.24% for 2026 and 2.56% for 2027. A new lease, or a renewal on new terms, is priced at the market, so over many years rents can rise faster than the coefficient.

Why does the 7.5% IMT matter for renting or buying?

Because it is paid up front and never comes back. On the default €415,360 home a buyer who has never been tax-resident pays €31,152 of IMT instead of €19,465, which moves the break-even year from 18 to 19. Becoming resident within two years and living in the home lets you reclaim the difference.

Does the calculator predict Lisbon house prices?

No. The price change defaults to 0% so that the result does not rest on a forecast. Enter your own assumption and watch the break-even year: it is the single input that moves the answer most.