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Every year, Portuguese landlords have the right to update the rent of active contracts, according to the official update coefficient published by the INE (National Statistics Institute). In 2025, this process is even more relevant in a context of high inflation and new rules introduced by the Mais Habitação law.
This guide explains how to correctly calculate the increase, how to notify the tenant, and which exceptions apply.
What is the Rent Update Coefficient?
The rent update coefficient is a percentage value published annually by the INE and set by Government Ordinance. It is calculated based on the variation of the Consumer Price Index (CPI), excluding housing, over the last 12 available months.
The coefficient applies to all residential lease contracts with a duration of more than one year, and must be used to calculate the new rent value starting January 1st of the following year.
Update coefficient for 2025:
The official coefficient for 2025 is 2.16%, as published in Ordinance No. 278/2024. This means that a rent of €800/month can be updated to €817.28/month in 2025.
How to Calculate the New Rent Value
The calculation is simple:
- Identify the current monthly rent value.
- Multiply by the coefficient (divide the percentage coefficient by 100 and add 1).
- The result is the new maximum legal rent value.
Formula:
New rent = Current rent × (1 + coefficient / 100)
Practical examples:
- Rent of €600 → €600 × 1.0216 = €612.96
- Rent of €900 → €900 × 1.0216 = €919.44
- Rent of €1,200 → €1,200 × 1.0216 = €1,225.92
Round the final value to the nearest cent. There is no obligation to apply the increase — you can update it to a value lower than the legal maximum or not update it at all.
How to Notify the Tenant
The rent update is not automatic — it requires a formal notification to the tenant. Without it, you cannot charge the new value.
Legal requirements of the notification:
- It must be sent in writing (letter, email with a read receipt, or through the AluSeg platform).
- The minimum notice period is 30 days before the new amount comes into effect.
- For contracts updating in January 2025, the notice must have been sent by the end of November 2024.
- It must include: the current rent amount, the applied coefficient, the new rent amount, and the effective date.
If you did not notify the tenant in time, you cannot apply the increase retroactively. In this case, you can do so next year — or starting from the date you provide the 30-day notice, if the contract allows it.
Exceptions and Limits under Mais Habitação
Housing pressure zones:
In municipalities designated as housing pressure zones, the update continues to apply to active contracts. However, when a contract ends and a new lease is signed for the same property, the initial amount of the new rent is limited to the previous rent amount (with the update coefficient applied).
Affordable rental contracts:
Properties included in the affordable rental program (rents below market value in exchange for tax exemptions) have specific update rules defined in the respective program contract.
Vulnerable tenants:
Under certain circumstances, tenants classified as vulnerable (elderly, disabled, low income) may benefit from temporary moratoriums on rent increases. Consult the current legislation if this situation applies to your case.
FAQ — Landlord Frequently Asked Questions
Can I increase the rent above the coefficient?
No. The coefficient is the legal maximum limit. Any increase above this amount is void and unenforceable against the tenant.
What happens if the tenant refuses to pay the new amount?
If you have fulfilled all formal requirements (30 days written notice in advance), the new amount is legally enforceable. Failure to pay the updated amount constitutes a breach of contract.
Can I apply the update to a 6-month contract?
No. The update based on the INE coefficient only applies to contracts with an initial duration of more than 1 year.
What if I have never updated the rent in recent years?
You cannot retroactively recover updates from previous years. You can only apply the current year’s coefficient, from the moment you provide the appropriate advance notice.
