Plans for Rental Housing Updates in 2024
The Portuguese government, on October 30th, announced its decision not to impose restrictions on rental housing in 2024. Landlords are now permitted to increase rents by up to 6.94%, in line with the inflation index and the official index for rent updates established by INE (Instituto Nacional de Estatística), as outlined in Aviso n.º 20980-A/2023. These regulations also apply to existing lease agreements.
However, tenants facing a burden rate exceeding 35% are entitled to direct government support. This government assistance will also see a 4.94% increase. For families already benefiting from this support, the updates will be automatic. Families whose burden rate is projected to reach 35% in 2024 will need to apply for this assistance. Eligibility for this support requires a total annual household up to level 6 of the tax income bracket (€ 38,632 in 2023).
Additionally, there is an increase in the tax deduction ceiling to €550 (formerly €502) in the IRS (Imposto sobre o Rendimento das Pessoas Singulares).
This decision may come as a surprise, as the government had previously imposed a maximum increase limit of 2% last year. This measure prevented the rental market from following the inflation rate and the norms of NRAU (Novo Regime de Arrendamento Urbano).
These lease updates are not mandatory. The landlord can choose not to implement them or schedule them for a different month in 2024 with a one-month notice.
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