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

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 excluding housing (Art. 24.º NRAU) 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, the coefficient for 2026 is 1.0224 (Aviso n.º 23174/2025/2), so rents may increase by up to 2.24% — a €800 rent rises to at most €817.92. The coefficient is published in the Diário da República by 30 October for the following year.

Two separate 2% rules are often confused — and neither caps today's annual updates.

The 2023 one-off brake (Lei 19/2022): for 2023 only, the annual update coefficient was legally capped at 1.02 (2%), with tax compensation for affected landlords. From 2024 the normal INE mechanism resumed in full — the 2024 coefficient was 1.0694 (6.94%) and the 2026 coefficient is 1.0224 (2.24%).

The Mais Habitação initial-rent cap (Lei 56/2023, in force): when a property was rented at any point in the previous 5 years, the initial rent of a NEW contract cannot exceed the last rent charged plus 2% (coefficient 1.02). On top of that base, the landlord may add annual update coefficients from the previous 3 years if they were never applied, and duly certified costs of major renovation works, within legal limits. This caps re-rentals between tenancies — it does not limit the annual update of an ongoing contract, which follows the INE coefficient.

In short: apply the INE coefficient for updates inside a contract, and the 1.02 cap when signing a new contract on a recently-rented property.

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 for the update year.

CompliantLease builds annual rent update provisions directly into the lease:

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