NRAU Art. 24º — NRAU (Lei 6/2006)Lei 56/2023 (Mais Habitação) — Mais Habitação

Annual Rent Increase Rules in Portugal: INE Coefficient and Mais Habitação Caps

Portuguese rent increases are controlled by an annual INE coefficient and capped by Mais Habitação (Lei 56/2023). Learn how the calculation works, the 2% cap, notification requirements, and tenant rights.

Legal Guide

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4 min read

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5 sections

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4 FAQs

1How Annual Rent Updates Work in Portugal

Under the NRAU (New Urban Lease Regime), landlords may increase residential rents once per year based on an official coefficient published by the INE (Instituto Nacional de Estatística). This coefficient is calculated from the Consumer Price Index (CPI) and reflects the previous year's inflation.

The process is straightforward: each year, the INE publishes the coeficiente de atualização de rendas (rent update coefficient), which sets the maximum percentage by which rents can increase. This coefficient applies automatically to all residential leases unless the contract explicitly opts out of annual updates.

For example, if the INE coefficient for a given year is 1.0543, rents may increase by up to 5.43%. The coefficient is typically published in October for the following year.

2The Mais Habitação 2% Cap

Lei 56/2023 (Mais Habitação) introduced a significant temporary restriction: annual rent increases for existing contracts are capped at 2%, regardless of the INE coefficient. This cap was introduced in response to high inflation that would have allowed double-digit rent increases.

The cap applies to: - All existing residential lease contracts - Both fixed-term and open-ended leases - Annual updates effective during the period the cap is in force

Additionally, Mais Habitação introduced a re-rental cap: if a property was rented in the previous 5 years, the new rent cannot exceed the previous rent by more than 2% (or €50, whichever is higher). This prevents landlords from ending leases and re-renting at inflated prices.

Landlords should check annually whether the Mais Habitação cap is still in force, as it was introduced as a temporary measure.

3Notification Requirements

Landlords must follow specific rules when applying a rent increase:

1. Written notice — The increase must be communicated in writing to the tenant 2. Advance notice — At least 30 days before the anniversary date of the contract 3. Specificity — The notice must state the new rent amount, the coefficient applied, and the effective date 4. Legal basis — Reference to the INE coefficient and/or the applicable annual update clause in the contract

If the landlord fails to notify the tenant within the required period, the increase is postponed to the following year. The landlord cannot apply retroactive increases for missed notification periods.

Tenants who receive a rent increase notice should verify the calculation against the published INE coefficient and the Mais Habitação cap.

4Common Mistakes to Avoid

For landlords:

•Applying the full INE coefficient when the Mais Habitação 2% cap is in force — always check which limit applies

•Increasing rent without written notice or with insufficient advance notice

•Attempting to increase rent more than once per year or by more than the published coefficient

•Confusing the INE coefficient with general inflation rates — only the official published coefficient applies

For tenants:

•Accepting rent increases without checking the calculation — verify against the published INE coefficient

•Assuming rent can never increase — annual updates are a legal right of the landlord when properly notified

•Not keeping records of rent increase notifications — these may be needed for dispute resolution

For both parties:

•Ignoring the contract anniversary date — the annual update is tied to this date, not the calendar year

5How CompliantLease Handles Rent Updates

CompliantLease builds annual rent update provisions directly into the lease:

•Terms step — landlords can enable annual rent updates, which adds the appropriate clause to the contract

•Mais Habitação compliance — the system validates rent increases against current caps, including the re-rental restriction for properties rented in the last 5 years

•Contract clause — the generated lease includes a clear annual update clause referencing the INE coefficient and applicable legislation

•Bilingual text — both Portuguese and English explanations ensure all parties understand how and when rent may be adjusted

This prevents landlords from inadvertently generating contracts with non-compliant rent increase provisions.

Legal References

NRAU Art. 24º — NRAU (Lei 6/2006)

Establishes that residential rents may be updated annually based on the INE (national statistics institute) coefficient, which reflects inflation.

Lei 56/2023 (Mais Habitação) — Mais Habitação

Introduces a temporary 2% cap on annual rent increases for existing contracts, overriding the INE coefficient when it exceeds this limit. Also caps increases for properties re-rented within 5 years at 2% above the previous rent.

This guide is for informational purposes. For specific legal advice, consult a Portuguese lawyer.

Frequently Asked Questions

How much can a landlord increase rent per year in Portugal?

The increase is limited to the annual INE coefficient, which reflects inflation. However, under Mais Habitação (Lei 56/2023), a temporary 2% cap applies, overriding the INE coefficient when it exceeds this limit.

What is the INE rent coefficient?

The coeficiente de atualização de rendas is an official figure published annually by the INE (Instituto Nacional de Estatística) based on the Consumer Price Index. It sets the maximum allowable rent increase for residential leases.

Can a landlord increase rent on a new lease above the previous tenant's rent?

Under Mais Habitação, if the property was rented in the previous 5 years, the new rent cannot exceed the previous rent by more than 2% (or €50, whichever is higher). This re-rental cap prevents sharp increases between tenancies.

How much notice must a landlord give before increasing rent?

The landlord must provide written notice at least 30 days before the contract anniversary date. The notice must state the new rent, the coefficient applied, and the effective date. Failure to notify on time postpones the increase.

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