The beginning of next year will once again bring an update on house rents in Portugal, in a context in which many contracts have not been reviewed in recent years. Although the announced annual increase is relatively moderate, there are situations in which the increase can exceed 11 percent, with a direct impact on family budgets.
Rents for rented houses are rising again, especially in older contracts or those that have not been recently updated. For 2026, the legal coefficient was set at 1.0224, which corresponds to an increase of 2.24 percent. At first glance, this is a contained increase, but this value does not reflect all the realities of the rental market.
The problem arises in cases where landlords have chosen not to update rents in recent years. The legislation allows unapplied annual coefficients to be accumulated and used in a single subsequent update, which could result in a much higher increase, according to the specialized economics portal Ekonomista. In these situations, the coefficients for 2023, 2024 and 2025 can be applied simultaneously, respectively 2 percent, 6.94 percent and 2.16 percent. The accumulation of these values results in an overall increase of around 11.1 percent.
In practice, a monthly income of 1,000 euros that has not been updated since 2022 can increase to around 1,111 euros. This represents an increase of 111 euros per month, or more than 1,300 euros per year, an impact that can weigh significantly on many family budgets.
What does the law say about updating rents?
The updating of rents is subject to clear rules. The increase can only occur after 12 months have passed since the beginning of the contract or since the last update. A contract concluded, for example, in March 2024 may only see the rent revised from March 2025 onwards.
Furthermore, the landlord is obliged to communicate the update in writing, via registered letter with acknowledgment of receipt, at least 30 days in advance. This communication must include the current value of the income, the coefficient applied, the new value and the date from which the update takes effect, says the same source.
If the tenant considers that the calculation is incorrect or that an undue coefficient was applied, they can contest the update within a maximum period of 30 days, also by registered letter, presenting the respective reasons.
When rents don’t rise
Not all contracts are covered by these updates. Contracts signed before 1990 that did not transition to the New Urban Lease Regime follow their own rules and are not subject to annual coefficients.
It is also important to emphasize that updating your income is not mandatory. Landlord and tenant can agree on a different regime and enshrine it in the contract. In the absence of agreement, the coefficient defined by law applies, according to the source previously cited.
What support is available for tenants
To help mitigate the impact of rising rents, there are several public supports. Extraordinary income support is aimed at households whose effort rate is equal to or greater than 35 percent, reaching a maximum of 200 euros per month.
In the IRS, income deductions have been increasing gradually. The limit is 700 euros this year, rising to 750 euros next year and 800 euros in 2027. For households in the first income bracket, the maximum deduction can reach 1,100 euros.
There are also programs such as Affordable Rentals, with house rents below market, and Porta 65 Jovem, aimed at young people between 18 and 35 years old who are starting an independent life. This set of rules, according to , helps to explain why, despite an apparently reduced annual coefficient, some rents may experience much higher increases at the beginning of the next year.
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