The inflation rate that serves as the basis for calculating the annual update coefficient for rents for different types of rentals, including housing, stood at 6.94% in August, according to the quick estimate released by the National Statistics Institute (INE). The final data will be released on September 12.
The Civil Code determines that this coefficient is calculated based on the variation in the consumer price index, without housing, corresponding to the last 12 months, taking as a reference the values up to August 31st. It will later be published in Diário da República until October 30.
In July, when asked by ECO whether the brake on rents would be repeated, the Ministry of Housing said that “the Government is monitoring the evolution of the data” and that the “matter remains under analysis until definitive data is available”.
This means that a current rent of 500 euros could increase by 34.7 euros at the beginning of next year, while a rent of 1000 euros could increase by 69.4 euros if the owner so determines.
Excluded from this annual update are old rents prior to 1990, in the case of housing rentals, which have different rules.
On the property owners' side, the expectation is that, after the brake placed on rents at the beginning of this year, the Government will not apply the measure again. “Let’s hope they don’t replicate [the brake rule]. This would result in great losses for owners and great distrust in the market”, said Luís Menezes Leitão, president of the Lisbon Owners Association (ALP).
For tenants, “anything that increases above 3% or 4% will be exaggerated”, said António Machado, general secretary of the Lisbon Tenants Association (AIL), who hopes that the Government will once again limit the rise in rents in the face of to the general increase in the cost of living in recent months.