The government is considering eliminating the 2% cap on rent increases for new contracts. Announcements may be made this Thursday, following the Council of Ministers meeting.
The Executive aims to relax rental laws to boost the market and tackle housing shortages, as well as to limit price increases.
The plan, expected to be approved Thursday by the Council of Ministers, will be comprehensive, featuring fiscal measures and funding schemes for construction and other financial solutions.
The government acknowledges these changes will take time to impact, thus amendments to rental law are seen as a way to quickly boost landlords’ confidence and availability of properties in the market.
On the table is the removal of the 2% increase limit for new rental contracts on properties that have been on the market in the previous five years, along with simplifying and facilitating evictions for non-payment.
If implemented, the plan would reverse changes made in 2023 under the government’s More Housing package led by António Costa.
Rents could rise in 2026, but rules and limits apply
Rent values may increase by 2.24% in 2026, based on inflation data revised on Wednesday by the National Statistics Institute (INE). However, there are guidelines regarding how landlords must notify tenants about the increases.
Only after publication in the Diário da República can landlords inform tenants of the rent hike, which can take effect 30 days after notice. Learn more.
Beatriz Vasconcelos with Lusa | 07:59 – 11/09/2025
According to final INE data, the average price index change excluding housing over the last 12 months to August was 2.24%, forming the basis for the annual rent update coefficient for the next year under the New Urban Lease Regime (NRAU). INE’s rapid estimate, released on August 29, suggested a 2.25% change.
The actual rent update value will be published in the Diário da República by October 30.
Only after publication in the Diário da República can landlords announce rent increases, which can only take effect 30 days after this notification.
This year’s rate, to be applied in 2026, shows an acceleration from last year (applied to 2025 rents), when it was set at 2.16%.
Porta a Porta, a movement advocating the right to housing, called on the government today to intervene in regulating and fixing rent prices to lower them, and to oversee rentals for tenant protection.
Lusa | 15:07 – 11/09/2025
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