Annual rent increase in Portugal and the 2027 coefficient explained

Once a year you may raise the rent on a Portuguese residential lease by an official coefficient, unless your contract sets its own update rule. For 2027 the coefficient is 1.0256, a maximum rise of 2.56%. You can apply it only once 12 months have passed since the lease began or since the last update. You must tell the tenant in writing at least 30 days in advance, by registered letter with proof of receipt. Increases you never claimed cannot be charged afterwards. You can, however, add skipped coefficients to a later update, as long as no more than three years have passed since each one could first have been used.

How the official coefficient works

The national statistics institute, INE (Instituto Nacional de Estatística), calculates the coefficient (coeficiente de atualização anual de renda). It is the full change in the consumer price index, excluding housing, over the latest 12 months for which figures exist on 31 August. INE must publish it as a notice (aviso) in the Diário da República by 30 October each year (NRAU, Lei 6/2006, art. 24). The figure published in autumn applies to updates that take effect in the following calendar year.

The 2027 figure is final. INE released the August inflation data on 10 September 2026, and the notice appeared in the Diário da República (2nd series, no. 191) on 1 October 2026.

To calculate the new rent, multiply the current rent by the coefficient. Round the result up to the next cent (NRAU art. 25). For example, €1,000 × 1.0256 = €1,025.60, and €850 × 1.0256 = €871.776, which becomes €871.78.

The coefficient is a ceiling, not an obligation. You may raise the rent by less, or not at all.

When you may raise the rent

If your contract does not set its own update rule, the default rules in Civil Code art. 1077(2) apply:

• Once a year only. You may ask for the first update one year after the lease started. After that, each update may come one year after the previous one.
• No increase in the first year. On a lease that began on 1 March 2026, the earliest date for a new rent is 1 March 2027.
• The anniversary need not be in January. You use the coefficient for the year in which the new rent takes effect. An update effective in May 2027 uses 1.0256. Rents that fall due in late 2026 cannot use the 2027 coefficient.
• Renewal does not reset the clock. The one-year count runs from the start of the lease or from the last update.

Leases with their own update clause

Under art. 1077(1), the parties may agree in writing whether and how the rent will be updated. A clause such as "the rent rises by 3% each year" or a stepped rent schedule takes the place of the official coefficient. A clause that says the rent "is updated under the law" means the official coefficient applies.

The 2023 cap showed how this works. Lei 19/2022 limited the 2023 coefficient to 2% "without prejudice to a different agreement between the parties". Contracts that referred to the legal coefficient or the official notice were held to 2%.

If your clause is unclear, take advice before you send anything.

Older leases

Leases signed before 1990 follow transitional rules. Since Mais Habitação (Lei 56/2023), they can no longer be moved onto the NRAU regime. They can still receive the ordinary annual coefficient. This guide covers leases under the current regime.

How to notify your tenant

The notice must be in writing and must state the coefficient and the resulting new rent. It must reach the tenant at least 30 days before the new rent applies. Without such a notice the increase has no legal effect.

The NRAU (art. 9) sets the form of the notice:

1. Write and sign a letter. Include your full address and the property address.
2. Send it by registered letter with acknowledgement of receipt (carta registada com aviso de receção). Send it to the rented home unless the tenant has given you another address in writing. Alternatively, hand it over in person and have the tenant sign and date your copy as proof of receipt.
3. If there are several landlords, all must sign, or one person who represents all of them (art. 11). If there are several tenants, address the letter to the one named first in the contract.
4. Count the 30 days from receipt, not from posting. Leave a margin for the post, especially if you send the letter from abroad.
5. If the letter comes back unclaimed, send a second registered letter 30 to 60 days after the first. If that one also comes back, the notice counts as received on the 10th day after it was sent (art. 10). A refusal to accept the letter, or a receipt signed by someone else, still counts as delivery.
6. Issue rent receipts for the new amount from the first rent the increase applies to.

Email, WhatsApp and ordinary post do not meet the legal form. A rental reform bill passed its first parliamentary vote on 30 September 2026 and would allow electronic notices in some cases. It is not law yet.

Sample notice letter

Adapt this to your lease, then send it by registered letter with acknowledgement of receipt. Keeping the Portuguese wording in the letter is sensible.

Subject: Annual rent update (Atualização anual da renda), [property address]

Dear [tenant's name],

Under article 1077 of the Civil Code and article 24 of the NRAU (Lei 6/2006), I hereby notify you of the annual update of the rent for the above property, under the lease dated [date].

Nos termos do artigo 1077.º do Código Civil e do artigo 24.º da Lei n.º 6/2006, de 27 de fevereiro (NRAU), venho comunicar a atualização anual da renda, aplicando o coeficiente de 1,0256, publicado pelo Aviso n.º 24199/2026/2, de 1 de outubro.

Current monthly rent (renda atual): €[amount] Coefficient applied (coeficiente aplicado): 1.0256 New monthly rent (nova renda): €[amount] Effective from (com efeitos a partir de): the rent due on [date], which is at least 30 days after you receive this letter and at least one year after [start of lease / last update].

Payment details are unchanged.

[Place, date, landlord's name, signature and full address]

If you are also applying skipped coefficients (see below), list each year and its coefficient separately. Show the calculation, so the tenant can check it.

What happens if you skip a year

Art. 1077(2)(d) has two parts:

• Lost money stays lost. If you did not update the rent, you cannot charge the tenant the difference for past months. Missed increases never become a debt the tenant owes.
• Skipped coefficients can be added to a later update, as long as no more than three years have passed since the date each one could first have been applied.

Combine coefficients by multiplying them, not adding them.

Worked example. A lease began on 1 October 2023 at €900 a month. The first update was possible on 1 October 2024, and the landlord has never raised the rent. In October 2026 the landlord sends a registered letter for a new rent from 1 December 2026:

• 2024 coefficient 1.0694: first usable on 1 October 2024, still within three years.
• 2025 coefficient 1.0216.
• 2026 coefficient 1.0224.
• €900 × 1.0694 × 1.0216 × 1.0224 = €1,005.2739, which rounds up to €1,005.28. That is about 11.7% more than now.

The next update would be possible from 1 December 2027, using the 2027 coefficient. If the landlord waited beyond 1 October 2027, the 2024 coefficient of 6.94% would drop out.

The law does not say exactly when the three years stop running: when you send the notice, or when the new rent takes effect. Make sure both fall inside the window.

Common misunderstandings

• Mais Habitação (Lei 56/2023) did not cap the 2024 annual update. The full 6.94% was available. The government gave lower-income tenants extra rent support instead. More than one in five landlords chose not to apply the 2024 increase, and many of them can still recover it within the three-year window.
• The 2% Mais Habitação limit concerns something else. It limits the starting rent of a new lease on a home that was let in the previous five years. It does not apply to the yearly update of an existing lease. That rule counts the 2023 coefficient as 1.0543. For annual updates of existing leases, the 2023 coefficient is 1.02 (Lei 19/2022).
• Raising the rent by less than the coefficient. It is not settled whether the unused part of a year's coefficient can be recovered later. Get advice if you plan to rely on that.

Staying under €2,300 for the 10% tax rate

From 1 January 2026 to 31 December 2029, Decree-Law 97/2026 adds article 45-C to the Tax Benefits Statute (EBF). It taxes rent at a flat 10% instead of 25%, provided the lease is exclusively for housing and the monthly rent does not exceed the "moderate rent" limit. That limit is 2.5 times the 2026 minimum monthly wage, which is €2,300. The limit is fixed at the 2026 figure. It can be raised by ministerial order (portaria) in line with the rent coefficient, but it does not rise automatically. Check whether such an order has been published before you rely on a higher figure.

Two points in the decree-law (art. 3) matter for annual updates:

• The rent includes everything paid under the lease. That covers furniture, equipment and services, even if they are billed separately.
• The test uses the annual rent divided by the number of months in the year. An increase partway through the year is therefore averaged.

Example. The rent is €2,250 and you raise it by 2.56% from 1 March 2027, to €2,307.60. Average over 2027: (2 × €2,250 + 10 × €2,307.60) ÷ 12 = €2,298, just under the limit. In 2028 a full year at €2,307.60 would be over €2,300, unless the limit has been updated by then.

If an increase would push a lease over the line, compare the extra rent with the tax cost. Losing the 10% rate means paying 25% (or a lower duration-based rate) on the whole rent from that lease. You may simply raise the rent by less than the coefficient. Our reading of the averaging rule should be confirmed with a tax adviser for your own case.

Checklist

• Check the lease for its own update clause. If there is none, the official coefficient applies.
• Note the lease start date and the date of the last update. Twelve months must have passed.
• Look up the coefficient for the year the new rent takes effect: 1.0256 for 2027.
• Add any skipped coefficients still within three years, multiplying them together.
• Calculate the new rent and round up to the cent.
• Check the result against the €2,300 limit if you use the 10% rate.
• Have every landlord sign the letter. Send it by registered post with acknowledgement of receipt at least 30 days before the effective date, plus postal time.
• Keep the letter, postal receipt and signed acknowledgement.
• Issue rent receipts for the new amount from the effective date.