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Each year, the Portuguese government establishes the annual rent index, a figure calculated by INE (Instituto Nacional de Estatística), the national statistical agency equivalent to the United States Census Bureau or the UK's Office for National Statistics (ONS). This index is calculated from the variation of the Consumer Price Index (IPC) over the preceding 12 months, using data available as of the 31st of August each year. Based on this analysis, the INE establishes the official rent adjustment figure, which is then published in the Diário da República, the Official Gazette of Portugal, by October 30th of the year preceding its application. For 2025, the index allows property owners to raise rents by a maximum of 2.16%, significantly lower than the 6.9% adjustment applied in 2024. To put this in perspective, a rental of 600 EUR in 2024 can only increase by 12.96 EUR, while a 1000 EUR rent will see a maximum rise of 21.60 EUR, and a 2000 EUR rent can increase by 43.20 EUR. This adjustment applies not only to residential rental properties but also extends to commercial properties and other leased spaces. The annual update follows the guidelines set forth under the Novo Regime de Arrendamento Urbano (NRAU). In comparison to recent years, the index in 2023 was set at 5.43%, but the government at the time imposed a cap of 2%. In 2024, without a cap, the index rose to 6.9%, as noted earlier. However, in 2024, the government increased the rent subsidy to 4.9%, providing direct financial support to tenants whose rent burden exceeds 35% of their income. It is important to note that the annual rent adjustment is not mandatory— homeowners may choose whether or not to apply the adjustment. Furthermore, this update does not necessarily have to take effect in January; it can be applied at any point during the year, provided the homeowner gives the tenant a minimum of 30 days' notice. In conclusion, while the 2025 rent increase limit of 2.16% is lower than that of 2024, it remains crucial for both tenants and homeowners to stay informed about their rights and obligations under the current legislation. For tenants seeking to understand potential rent adjustments or property owners looking for guidance on implementing changes, expert legal advice may be required. If you have questions or need assistance understanding the rental lease regulations, feel free to reach out to us . We're here to help you make informed decisions.

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