Renting out an apartment in Portugal while living in Israel: tax in 2026

Portugal taxes the rent first, because the apartment is there: a flat 25% on the net rent from a housing lease, or 10% since 2026 when the rent stays within the moderate-rent limit (€2,300 a month in 2026). Israel then taxes its residents on the same rent, and you choose one of two routes: 15% under section 122A of the Income Tax Ordinance, with no expenses except depreciation and no credit for the Portuguese tax, or your regular Israeli rates with a credit for the tax paid in Portugal under the Israel–Portugal tax treaty. The rules below were checked on October 29, 2026, on official Portuguese and Israeli sources. This is general information, not tax advice: decide your route with an Israeli accountant.

The yearly property tax and the sale are covered in owning a home in Portugal from abroad: yearly taxes, and short-term rentals in how AL income is taxed. This article covers a long-term lease of an apartment in Porto, Portugal, or anywhere else in the country, owned by a person who lives in Israel.

Portugal: what a landlord living in Israel pays

Rent from a property in Portugal is Portuguese-source income, so you pay IRS on it even though you live abroad. For a housing lease the rate is a flat 25% (CIRS, article 72(2)), charged on the rent minus the expenses the law allows, such as maintenance works, condominium charges, IMI and the lease's stamp duty. Leases for permanent housing of five years or more get a lower rate; the details are in AL or medium and long-term rental in Porto.

Since January 1, 2026, article 45-C of the Tax Benefits Statute sets a 10% rate for rent from leases exclusively for housing when the monthly rent does not exceed the moderate-rent limit, for rent earned until December 31, 2029. The limit is 2.5 times the 2026 minimum monthly wage of €920, so €2,300 a month. The text of article 45-C sets no residence condition. Ask your accountant in Portugal to confirm how the Tax Authority applies it on your return.

The rate stays flat for an Israeli resident. CIRS lets residents of Portugal add rent to their other income and pay progressive rates instead (article 72(13)), and gives residents of another EU or EEA state a similar option for some income (article 72(15)). Israel is in neither group.

You declare the rent in Annex F of the yearly IRS return (Modelo 3), filed online between April 1 and June 30 of the following year. If the tenant is a company or another entity with organized accounts, it withholds 25% (or 10% under article 45-C) when it pays you, and that amount counts toward your tax.

Two more obligations come with owning the apartment:

• Tax representative or electronic notifications. Within 15 days of owning property in Portugal, a person living outside the EU, Norway, Iceland and Liechtenstein must appoint a tax representative or sign up for the Tax Authority's electronic notifications (or the ViaCTT electronic mailbox). Andorran citizens living in Andorra are exempt as well.
• IMI, the yearly municipal property tax. In Porto the rate is 0.324% of the property's tax value for 2025, charged in 2026. Payment months and AIMI are in the yearly taxes article.

The Israel–Portugal tax treaty

Israel and Portugal signed a convention for the avoidance of double taxation in Lisbon on September 26, 2006. It entered into force on February 18, 2008, and it applies to income from January 1, 2008 (to tax withheld at source from March 24, 2008, according to Israel's Ministry of Finance treaty list). The authentic texts are in Portuguese, Hebrew and English, and the English text prevails if they differ.

Three articles matter to a landlord:

• Article 6. Income a resident of one state earns from immovable property in the other state "may be taxed in that other State", and this includes income from letting it. Portugal keeps the right to tax your rent.
• Article 13(1). The same applies to gains from selling the property: Portugal may tax them.
• Article 23(2)(a). Israel allows a resident a deduction from Israeli tax equal to the income tax paid in Portugal, capped at the Israeli tax on that income.

The convention covers taxes on income. On the Portuguese side its list names IRS, IRC and the municipal surcharge on IRC (derrama). IMI, a property tax, is not on that list.

Israel: two ways to pay tax on the rent

An Israeli resident who earns rent from property abroad owes Israeli tax on it, subject to the double taxation treaties. The Israel Tax Authority's 2025 guide describes two routes.

The 15% route (section 122A). An individual whose foreign rent is not business income may pay 15% on it instead of the regular rates. In this route you deduct no expenses except depreciation, and you get no offset, credit or exemption. The guide says it directly: if you pay only 15% on foreign rent, you cannot get a credit for the tax paid abroad on that income. In practice you pay the Portuguese tax and the Israeli 15% on top.

If the rent is the only reason you would have to file an Israeli return, you can pay the 15% through the shorter reporting route (דיווח מקוצר) and be exempt from filing. The payment is an advance made with payment vouchers 351 or 352, by April 30 after the end of the tax year. For tax year 2025 the guide applies this exemption to foreign income of up to ₪375,000. The Tax Authority's form 5329 is the short report on income and assets abroad, filed at the tax office for your home address.

The regular route with a credit. You report the rent in your annual return, with the expenses Israeli law allows. The Israeli rate on income from property usually starts at 31% (from age 60, the regular brackets apply), under Ordinance section 121. Israel then credits the income tax you paid in Portugal, up to the Israeli tax on that rent (Ordinance section 200 and treaty article 23).

Which route costs less depends on your Israeli marginal rate, your expenses and the Portuguese tax you actually paid. An Israeli accountant can run both numbers for you.

Checklist for a landlord living in Israel

1. NIF and tax contact. Get a Portuguese tax number, then within 15 days of owning the property appoint a tax representative or join the electronic notifications.
2. Register the lease with the Tax Authority. Submit the stamp duty form (Modelo 2 do Imposto do Selo) on the Portal das Finanças by the end of the month after the lease starts, and pay the stamp duty of 10% of one month's rent within the same deadline. Report changes and the end of the lease by the end of the following month.
3. Issue electronic rent receipts. Issue a recibo de renda eletrónico on the Portal das Finanças each time you receive rent, deposits and advances included. Owners aged 65 or more and very small landlords who have no electronic tax mailbox are exempt and file the Modelo 44 annual statement by the end of February instead.
4. Bank account. A Portuguese bank account is not a legal requirement for a landlord, but it makes collecting rent and paying IMI, IRS and the condominium simpler.
5. Keep every expense document. Condominium, IMI, maintenance and stamp duty invoices reduce the Portuguese tax.
6. File in Portugal. Modelo 3 with Annex F, between April 1 and June 30 each year.
7. Choose your route in Israel. Either 15% by April 30 through the short route, or the full return with the credit. Keep the Portuguese tax assessment for your Israeli accountant.
8. Property manager. Someone in Porto who handles the tenant, repairs, receipts and documents keeps you on time with the Portuguese deadlines.

What Urbanis does

Urbanis is a licensed real estate agency in Porto (AMI 24596), and our team speaks Hebrew. We manage long-term rentals for owners who live in Israel: finding and checking tenants, the lease and its registration, the monthly rent receipts, repairs and the condominium. We coordinate with independent accountants in Portugal and in Israel so that the documents each one needs reach them on time. We do not give tax advice, and every tax decision stays with your accountant.

Frequently asked questions

How much tax does Portugal charge on rent from an apartment owned by an Israeli resident?

A flat 25% of the net rent from a housing lease. Since 2026, 10% when the lease is exclusively for housing and the rent is up to €2,300 a month, for rent earned until the end of 2029.

Source: CIRS, article 72, Portal das Finanças

Is there a tax treaty between Israel and Portugal?

Yes. It was signed in Lisbon on September 26, 2006, entered into force on February 18, 2008, and applies to income from January 1, 2008. Portugal may tax rent from property located there, and on the regular Israeli route Israel credits the Portuguese tax.

Source: Diário da República, Aviso n.º 94/2008

What is the 15% route in Israel for foreign rent?

Section 122A of the Income Tax Ordinance lets an individual pay 15% on rent from property abroad, with no deduction except depreciation and no credit for foreign tax.

Source: Israel Tax Authority, "Know your rights and duties" 2025, section 25

Do I have to file an Israeli tax return because of rent from Portugal?

Not always. If the rent is your only reason to file and you pay the 15% through the short reporting route with vouchers 351 or 352 by April 30, you can be exempt, within the ₪375,000 cap the guide gives for 2025.

Source: Israel Tax Authority, "Know your rights and duties" 2025, chapter A

Do I need a tax representative in Portugal if I live in Israel?

Yes, or the electronic notifications instead. Within 15 days of owning property you must appoint a representative or join the notification system; only residents of the EU, Norway, Iceland and Liechtenstein, and Andorran citizens living in Andorra, may skip this.

Source: Portal das Finanças, NIF leaflet for foreign citizens

This article is general information, not legal or tax advice. Last verified: October 29, 2026.