Every autumn, Portugal publishes one small number that quietly resets thousands of rents: 1.0256. Whether you actually see that 2.56% rise depends less on the number than on a letter, and on the date it lands in your tenant's hands.
The number, and where it comes from
The coefficient for 2027 was set by the national statistics institute, INE, and published in the official gazette, the Diário da República, on 1 October 2026 (Aviso n.º 24199/2026/2). Under article 24 of the urban lease law, the NRAU (Law 6/2006), the coefficient is simply inflation with the housing component taken out: the full variation of the consumer price index excluding housing over the twelve months to August. INE's final August figures, published on 10 September, put that variation at 2.56%. Multiply a rent by 1.0256 and you have the highest rent the law allows for 2027.
Two things the number is not. It is not automatic: nothing changes until the landlord acts, and a tenant who hears nothing keeps paying the old rent. And it is not a target. It is a ceiling. You may apply less than 2.56%, or nothing at all.
What 2.56% is worth in euros
The arithmetic is one line: current rent × 1.0256. On the rents I see most often on the Lisbon coast, it looks like this.
| Current rent | Monthly rise | New rent | Extra per year |
|---|---|---|---|
| €850 | +€21.76 | €871.76 | €261.12 |
| €1,000 | +€25.60 | €1,025.60 | €307.20 |
| €1,250 | +€32.00 | €1,282.00 | €384.00 |
| €1,500 | +€38.40 | €1,538.40 | €460.80 |
| €2,000 | +€51.20 | €2,051.20 | €614.40 |
One wrinkle that catches people out: if you skipped a year or two, the rise can be bigger than 2.56%. The Civil Code lets a landlord apply coefficients that were missed, provided no more than three years have passed since each could first have been used. A landlord who did not update in 2025 (2.16%) or 2026 (2.24%) can apply those together with 2027's, which compounds to about 7.1%: a €1,000 rent becomes €1,071.22. What you cannot do is backdate it. The higher rent runs from the new notice onwards; the differences for past months are gone.
Who it applies to, and the exceptions that matter
The coefficient covers urban and rural leases, homes and commercial premises alike, wherever the contract itself does not set a different update mechanism. That last clause matters. Under article 1077 of the Civil Code, landlord and tenant are free to agree their own regime in the lease: a different index, a fixed annual step, no updates at all. If your contract has its own clause, the clause is the rule, and the INE coefficient is not your number. Read the contract before you read anything else.
Timing inside the contract matters too. The first update can only be demanded once the lease has run a full year, and after that, one update a year, each a full year after the last. A lease that began in March 2026 cannot be updated until March 2027, whatever the calendar says about January.
Two categories sit outside this simple picture. Leases signed before 1990 that never moved onto the NRAU sit in a transitional regime with its own update rules; if you hold one, take advice before treating it like a standard lease. And supported rent, the arrendamento apoiado under which public bodies let social housing, is calculated from the household's income under its own law (Law 81/2014). It has nothing to do with this coefficient.
The letter: written, 30 days ahead, with proof
To apply the rise, the landlord must tell the tenant in writing, at least 30 days before the new rent takes effect, stating the coefficient applied and the new rent that results from it. Under article 9 of the NRAU, that means a registered letter with return receipt (carta registada com aviso de receção), or hand delivery against the tenant's signed receipt on a copy. An email, a message, a conversation in the stairwell: that is where disputes start.
The dates to work to:
- 1 October 2026: the coefficient was published. Letters can go out now.
- 30 November 2026: the last day for the letter to reach the tenant if the new rent is to apply from January 2027.
- January 2027: the first rent at the new level, for leases whose anniversary allows a January update.
Miss 30 November and you have not lost the rise. A correct notice served later simply takes effect later: once the 30 days have run, the higher rent applies from the following rent due date. What a late letter costs you is months, not the increase itself. What you can never do is charge it retroactively.
If you are the tenant reading this
Check four things when the letter arrives. It came by a route that proves delivery. You were given a full 30 days. The coefficient named is the published one, 1.0256 for 2027. And the maths is your rent multiplied by that coefficient, no more, unless your contract sets a different mechanism or the landlord is catching up missed years, in which case ask for the calculation year by year.
If the notice fails on form, timing or arithmetic, the increase does not take effect, and you keep paying the old rent until a proper notice arrives. Reply in writing, by registered letter, keep the letter and the receipt, and if the numbers are contested, a tenants' association will check them with you.
The recent history, for scale
| Year | Coefficient | Maximum rise |
|---|---|---|
| 2023 | 1.0200 | 2.00%, capped by law |
| 2024 | 1.0694 | 6.94% |
| 2025 | 1.0216 | 2.16% |
| 2026 | 1.0224 | 2.24% |
| 2027 | 1.0256 | 2.56% |
The odd one out is 2023. The formula pointed to 5.43% that year, and the government suspended it, fixing the coefficient at 2% by law (Law 19/2022) and compensating landlords through the tax system. The 6.94% of 2024 was the formula running uncapped again, on the way down. The 2.56% for 2027 is the mechanism back to its ordinary job: tracking inflation, minus housing itself.
If you are buying to let
Underwrite the indexation, not the hope. With a tenant in place, your income growth is capped at roughly inflation excluding housing, so the rent you set on day one does most of the work for years. I made the same point in the long-term landlord guide: set the starting rent as if you will live with it, because more or less, you will.
Put 2027 in the model at its real size. On a €1,500 rent, the rise adds €460.80 a year. Real money, honestly come by, and not a strategy. Global Property Guide put average gross apartment yields in Portugal at 4.29% in May 2026, and Lisbon at 3.76%. The coefficient protects that income line from inflation; it does not lift it.
One thing to keep an eye on: a broader reform of the lease law is moving through parliament this autumn. It is not law yet, and it does not change the number on this page. For 2027, the rules above are the rules.
Sources
- The 2027 coefficient: Aviso n.º 24199/2026/2 of 1 October 2026, Diário da República n.º 191/2026, 2nd series, sets the coefficient at 1.0256 under article 24 of Law 6/2006 (NRAU) and article 11(5) of Decree-Law 294/2009 (rural leases); it applies to urban and rural leases unless the parties agreed another criterion. Notice text and mechanics explained by Cuatrecasas and TOF Advogados, both 1 October 2026.
- How updates work under article 1077 of the Civil Code and article 9 of the NRAU: annual update, the first after one full year of the lease; written notice at least 30 days ahead stating the coefficient and the new rent, by registered letter with return receipt or hand delivery against a signed receipt; missed coefficients may be applied later within three years, with no retroactive charging. Cuatrecasas; RFM's explainer, which cites the Portal da Habitação's official coefficient table.
- The figure behind the coefficient: INE's final August CPI, published 10 September 2026, fixed the 12-month variation of consumer prices excluding housing (September 2025 to August 2026) at 2.56%; with the notice published, letters can be sent now, and for the new rent to apply from January 2027 the letter must reach the tenant by 30 November 2026. CartaRegistada.pt, updated October 2026.
- The 2023 exception: Law 19/2022 of 21 October 2022 suspended the formula for 2023 and fixed the coefficient at 1.02, in place of the 5.43% the inflation figures would have produced, with extraordinary tax support for landlords. Sérvulo & Associados.
- Supported rent (arrendamento apoiado) is set by applying an effort rate to the household's corrected monthly income under article 21 of Law 81/2014, not by the INE coefficient. Law 81/2014, text.
- Market context: the statutory 2027 update of 2.56% against 2.24% for 2026; gross apartment yields averaging 4.29% in May 2026 (Lisbon 3.76%); the government's lease-law reform approved on general principles on 30 September 2026 and still before parliament. Global Property Guide, Portugal property market analysis, October 2026.
- Related reading on this site: renting out your Portuguese home long-term.