Portuguese Housing Update: House Rents Can Increase Up to 2.16% in 2025

Each year, the Portuguese housing market is updated in accordance with the guidelines established under the Novo Regime de Arrendamento Urbano (NRAU). For 2025, Notice No. 23099/2024/2, published on the 18th of October, officially set the maximum rent increase at 2.16%.

In practical terms, the rent for a property priced at EUR 1,000 could increase by EUR 21.60.

It is important to note that if a landlord has not adjusted the rent in the past three years, they may now apply an increase of up to 11%, reflecting the cumulative adjustments from those years. However, this update is not mandatory and applies only to existing rental agreements. Landlords also have flexibility in timing, as the increase can be implemented at any point in 2025 – not necessarily in January - as long as they provide tenants with at least 30 days' prior notice.

The rent adjustment coefficient is determined by the variation in the Consumer Price Index (IPC) over the preceding 12 months, based on data available as of the 31st of August each year. This calculation is carried out by INE (Instituto Nacional de Estatística). It is then officially published in the Diário da República, Portugal's Official Gazette, by the 30th of October of the year prior to its implementation.

In the last six years, we have witnessed significant fluctuations in this index, which have greatly impacted the Portuguese rental market. For the record, here are the values for the past six years:

• 2019: 1.15%
• 2020: 0.51%
• 2021: -0.03%
• 2022: 0.43%
• 2023: 2%
• 2024: 6.94%
  

This adjustment applies to both residential and commercial rental properties, as well as other leased spaces, in rural and urban contexts.

If your tenant's rent has not been updated in recent years, as a landlord, you have the option to adjust the rent using the cumulative coefficient from the past three years. For 2023, 2024, and 2025, this totals around 11%. To proceed, you must provide the tenant with at least 30 days' prior notice, ensuring compliance with legal requirements.

In addition to providing at least 30 days' notice of the updated rent payment date, the notice must be in writing.

There are two options to provide the notice to the tenant:

1. A registered letter with an acknowledgement of receipt.
2. Hand-delivery, requiring the tenant's signature as proof of receipt.

The notice must clearly include the current rent amount, the new updated rent, and the date when the adjusted rent will take effect.

This rent update can occur when contracts are more than one year old, that is, one year after the beginning of the contract. The landlord can require the updated rent after informing the tenant of the new amount. If the application of the coefficient is incorrect, the tenant should contest.

A landlord may terminate the rental agreement when specific tenant non-compliance occurs, such as overdue rent. Alternatively, the landlord may oppose the automatic renewal of the contract, provided the opposition is communicated within the legally defined timeframe.