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

Under the NRAU, landlords may update residential rents no more than once per year using the official coefficient published by the INE. The coefficient is calculated from the Consumer Price Index excluding housing (Art. 24.º NRAU).

The statutory right exists by default unless validly displaced, but the amount does not take effect automatically: the landlord must give valid written notice at least 30 days before the stated effective date.

For 2026 the coefficient is 1.0224 (Aviso n.º 23174/2025/2), so an eligible €800 rent may rise to at most €817.92 after the timing and notice conditions are met.

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 update:

1. Timing eligibility — The first update cannot take effect until at least one year after the lease starts; later updates cannot occur more than once per year. 2. Written notice — Communicate the update in writing at least 30 days before the stated effective date. 3. Specificity — State the new rent, the coefficient applied, and the effective date. 4. Legal basis — Identify the official INE coefficient and the applicable update basis.

The update operates prospectively after valid notice; do not charge differences for prior months. This guide does not state that missing an anniversary forfeits the update until the following year or that unused coefficients automatically accumulate.

Tenants should verify the calculation against the published coefficient for the update year.