Security Deposit Limits in Portugal: What Landlords and Tenants Must Know

In Portugal, a security deposit — known as a caução — is a sum of money the tenant pays upfront to guarantee the fulfilment of lease obligations. It covers potential unpaid rent, utility debts, or property damage beyond normal wear and tear. Unlike many other countries, Portugal has enacted specific legislation that strictly limits how much a landlord can demand.

Article 1076º of the Civil Code, as amended by Lei 24-D/2022 with effect from 1 January 2023, separates two ceilings:

For €1,000 monthly rent, the deposit ceiling is €2,000. An ordinary rent due at signing and any lawful advance rent are separate from that deposit and should be labelled separately in the contract and payment evidence.

A request for more than two rents as a deposit exceeds the verified Article 1076º ceiling. Do not relabel an excess deposit as advance rent. The correct remedy for an existing clause or payment depends on the facts and applicable remedial rules, so record the amounts and obtain case-specific advice rather than assuming automatic voidness or recovery.

At handover, both parties should retain the signed inventory, dated photographs, meter readings, key count, and a record of the deposit amount and payment method. At move-out, repeat the inspection in the same order and record any disagreement rather than altering the original inventory. Keep invoices or estimates supporting proposed deductions, the return-payment confirmation, and related communications together. Label advance rent and the security deposit separately in the lease and payment records so they are not confused later. This evidence does not decide a dispute, but it makes the facts easier to verify.

Start with the signed opening inventory and compare the same rooms, fixtures, keys, and meter readings at handover. List each proposed deduction separately, identify the obligation said to support it, and attach the invoice, estimate, bill, or payment record. Keep ordinary wear, unpaid rent, utilities, and physical damage as distinct categories instead of using one unexplained total.

Record the amount held, the supported items, the disputed items, the balance transferred, and the transfer date. If an invoice will arrive later, document that open item and agree how it will be resolved rather than silently retaining the whole deposit. Both parties should keep a copy of the completed reconciliation and the supporting evidence. This reconciliation is practical evidence, not a legal decision about a contested claim.