Portugal Sets Preliminary 2.25% Rent Increase Cap for 2026
\nThe National Statistics Institute (INE) announced on Friday a preliminary figure indicating that rents in Portugal may be updated by a maximum of 2.25% in 2026. This initial estimate is based on the average inflation rate for the last 12 months, excluding housing, with the final, definitive data scheduled for release on September 10. This coefficient will apply to rental contracts under the New Urban Lease Regime (NRAU) and the New Rural Lease Regime.
\nThe calculation for the annual rent update is a legally defined process, tied directly to the consumer price index. The preliminary rate of 2.25% would establish an update coefficient of 1.0225. This means for every €100 of rent, an increase of €2.25 can be applied. For a typical rental contract of €1,000 per month, this translates to a potential monthly increase of €22.50. This follows a 2.16% increase that was permitted for 2025, showing a slight acceleration in the allowable rent adjustment rate.
\nIt is at the discretion of the landlord whether to apply this increase. Should they choose to do so, they are required to inform the tenant in writing with a minimum of 30 days' notice before the new rent takes effect. The law also respects the autonomy of contracts, meaning if a rental agreement contains a different, pre-agreed mechanism for updates, those terms will prevail over the government-stipulated coefficient.
\nEconomist Ricardo Valente from a Lisbon-based consultancy noted that the figure aligns with recent economic trends. \"The 2.25% is a reflection of persistent, though moderating, inflation in the consumer goods sector. For the property market, it provides a necessary adjustment for landlords to cover rising costs, but it is controlled enough to prevent a shock to tenants. It strikes a difficult but essential balance in the current economic environment.\"
\nThe announcement comes as the government continues to manage housing affordability. The Ministry of Infrastructure recently confirmed that the extraordinary rent support program will continue until 2028. This measure provides financial aid of up to €200 per month to tenants in the first to sixth income tax brackets who spend more than 35% of their income on rent. The Ministry acknowledged implementation issues with the automated system and assured that payments for 2025 would be made retroactively in September.
\nRepresentatives from the Lisbon Landlords Association (Associação de Proprietários de Lisboa) have stated that the annual update is vital for the maintenance and upkeep of rental properties. They argue that a predictable, inflation-linked increase ensures that property owners can continue to offer quality housing and that the rental market remains a viable investment, which is crucial for maintaining supply. The final confirmation of the 2.25% rate on September 10 will be closely watched by property owners, tenants, and investors as they prepare their budgets and financial strategies for the upcoming year.
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