Annual Rent Update for 2025: The Legal Coefficient and Its Legal Implications
- Marcella Leandro Castellar Pinheiro
- Nov 12, 2024
- 3 min read
The annual rent update is a recurring and highly relevant topic in the real estate market. The dynamics between landlords and tenants have always involved the need to adjust rent values according to inflation and the country's economic conditions. However, the legal norms governing this update impose specific limits and formulas to ensure a certain level of predictability and balance in contractual relationships.
Recently, Notice n.º 23099/2024/2 was published, establishing the legal rent update coefficient for 2025. This coefficient, set at 2.16%, represents an adjustment that must be applied to existing rental contracts unless otherwise stipulated by the parties.
The Legal Mechanism for Rent Updates
As a general rule, the rent update is a matter that can be freely agreed upon by the parties when the lease agreement is signed. However, in the absence of an express agreement or contractual clause governing this matter, the rent will be updated annually according to the legal update coefficients established.
The legal basis for this update is found in the Civil Code and supplementary regulations that govern urban and rural leases. Specifically, the formula for calculating rent updates is linked to the variation in the Consumer Price Index (CPI), excluding housing, as determined by the National Institute of Statistics (INE). The calculation considers the accumulated variation in the CPI over the last 12 months, based on data available until August 31 of the previous year.
The Update Coefficient for 2025
On October 18, 2024, Notice n.º 23099/2024/2 was published, establishing that the annual rent update coefficient for 2025 will be 1.0216. This represents a 2.16% increase over the rent value in 2024.
It is important to note that this coefficient represents a significant reduction compared to the update coefficient for 2024, which was 6.94%. In other words, while rents in 2024 saw a considerable increase, in 2025 the adjustment will be much more moderate, reflecting a different economic scenario, possibly more stable, which directly impacts consumers' purchasing power and the real estate market.
The Importance of Regular Rent Updates
Regular rent updates play an important role in balancing the interests of landlords and tenants. They aim to ensure that rent values keep up with economic changes, preserving the real value of rental contracts against inflation. For landlords, the update is a way to keep the rent value in line with the cost of living and market evolution. For tenants, the update coefficient provides predictability about annual increases, preventing surprises.
On the other hand, the absence of a specific clause in the contract can lead to misunderstandings between the parties, especially during periods of strong economic variation. Therefore, whenever possible, it is advisable for landlords and tenants to clearly agree on the conditions for updating rent, establishing criteria that meet the needs of both parties.
Conclusion
In summary, rent updates are a legally regulated process, and Notice n.º 23099/2024/2, which sets a 2.16% coefficient for 2025, is one way to ensure this update based on the country's economic reality. This coefficient is lower than that of the previous year, indicating a scenario of lower inflation or greater price control, which could benefit both landlords and tenants.
For legal professionals and real estate practitioners, it is essential to stay aware of these annual updates, as they directly impact contract drafting and the monitoring of rental market conditions. Additionally, the recommendation is that both landlords and tenants seek appropriate legal advice to ensure that update clauses are clear and comply with legal requirements, preventing potential disputes.
Constant adaptation to regulations and the predictability of rental conditions are key to the smooth functioning of the real estate market, ensuring legal and economic security for all parties involved.
Kommentare