Lisbon, Oct. 22, 2024 (Lusa) - Rents in Portugal will be able to rise by an average of 2.16% in 2025, and the update could be higher in situations where, having maintained the rent in past years, the landlord now updates it using the coefficients for the previous three years, resulting in an overall increase of 11.1%, given the official inflation data on which the rules are based. 

                Average non-housing inflation data for August nad released by the National Statistics Institute (INE) indicates that, as of January 2025, rents (including those for contracts signed prior to 1990) can increase by as much as 2.16%, a year after the last update.

                This figure corresponds to around a third of the ceiling set for updating rents in 2024, which was 6.94% - the highest in the last 30 years, in line with inflation figures for the previous year.

                A year earlier, the update was limited to 2%, due to a brake decided by the government in the wake of the pandemic. Without this brake, the inflation-linnked ceiling for the increase would have been 5.43%.

                In a context of already high rents, the 2.16% would, for a current rent of, for example, €850 a month, would translate into an increase of €18.36.

                The amount of the increase could, however, be higher if the landlord has decided to leave the rent unchanged in recent years and now chooses to add on the coefficients for the last three years, which could result in an increase of more than 11%.

                For example, for a rent of €850 that has been maintained over three years, adding the coefficients from these (1.0200, 1.0694 and 1.0216) will result in an aggregate increase of €97.20, bringing the rent to €947.20 per month.

                According to the law, if a landlord has not increased rent in one or more years of the previous three, they can update the rent with reference to the coefficients of these previous three years.

                With the Mais Habitação law introduced by Portugal's previous, Socialist government, the rent on contracts dating back to before 1990 may now also be updated according to the coefficient based on the average non-housing inflation recorded in August, meaning that the rent on these contracts can be updated by 2.16% if more than 12 months have passed since the previous update (of up to 6.94%).

                LT/ARO // ARO.

                Lusa