The annual update of housing rents is once again on the agenda at the beginning of the year and, in 2026, there will be changes that will affect thousands of contracts in Portugal. The official coefficient has already been released and confirms an increase of 2.24%, but there are situations in which the increase can exceed 11%, especially when rents have not been updated in the last three years, according to DECO PROTeste.
Income and inflation are once again intersecting at a time when the housing market remains under pressure. The coefficient defined for 2026 applies to housing and non-housing contracts and results from the variation in the Consumer Price Index (without housing). According to data published by the National Statistics Institute, this value allows landlords to update their rent from January onwards, although applying the increase is not mandatory.
Updates can be made in any month of the year
The law states that the landlord can choose any month in 2026 to apply the increase, as long as the tenant is informed 30 days in advance. The update can only occur when one year has passed since the contract was signed or since the last change in value. If the contract provides for specific rules, what is written always prevails.
In situations where the contract has not been updated in recent years, the legislation allows the application of accumulated coefficients from the previous three years. This is where the increase could exceed 11%, reflecting the values published in the last three years.
Coefficients from recent years help explain the increases
Annual coefficients published in more recent years show significant variations. In 2023, the coefficient stood at 1.02. In 2024 it rose to 1.0694, reflecting higher inflation. In 2025 it dropped to 1.0216, before stabilizing at 1.0224 for 2026. When a contract is not updated for three consecutive years, these values accumulate and can lead to an increase of more than 11%, says the same source.
The possibility of accumulation only applies if the contract allows annual updating and if this update has not been made. If there is an error in applying the coefficient, the tenant must contest it in writing, presenting the correct calculation.
How to calculate the new income amount
The calculation for 2026 is simple: just multiply the current housing income by 1.0224. If the rent is 700 euros, the update corresponds to 715.68 euros. This amount can only be demanded after the tenant has been informed of the increase.
Communication must be made in writing and can be delivered by hand, with receipt signed, or sent by registered letter with acknowledgment of receipt. The letter must indicate the current value, the new value after applying the coefficient and the date from which it comes into force, according to .
IRS deductions may change in 2026
The IRS income deduction limit was expected to increase to 750 euros, replacing the 700 euros applied in 2025. The changes announced by the Government at the end of September indicate, however, that a higher limit is being analyzed, which could reach 900 euros, if the measures are approved.
How the annual coefficient is defined
The rent update coefficient is calculated every year by the National Statistics Institute based on inflation from the previous 12 months, excluding housing. The value is published in the Diário da República until October 30th, allowing it to be applied from January of the following year.
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