Bloco Proposes a 1 Percent Ceiling on 2027 Rent Updates and a Maximum Rent for New Leases, as the Government Brands Today's 2 Percent Brake a Dead Letter

The Bloco de Esquerda (BE, Left Bloc) wants Portugal's 2027 State Budget to hold next year's rent updates to 1 percent and to set a maximum rent for new leases. Landlords may otherwise raise rents by up to 2.56 percent from 1 January. None of this is law: the proposals are among the record number of budget amendments tabled last week, and each needs a majority in the votes that end on 24 November.

The amendments arrive as the Government argues the rent cap already on the books does nothing. The Secretary of State for Housing, Patrícia Gonçalves Costa, described the 2 percent brake on rents in new leases as "letra morta" (a dead letter) in an interview published by Jornal de Negócios on 8 November.

What the Left Bloc proposes

BE's only MP, Fabian Figueiredo, presented 30 housing amendments in Parliament on 6 November, Lusa reported via Notícias ao Minuto. They include:

• A 1 percent brake on rent updates next year;
• A maximum rent in new leases (Lusa's report does not say how it would be set);
• A limit on deposits (cauções);
• 30 working days for a tenant to clear rent arrears without facing eviction.

Figueiredo challenged the rest of the opposition to "bury" the Government's rental law in the budget, arguing that the budget law has "reinforced value" and overrides other laws. BE also wants a 50 percent IMT (property transfer tax) on home purchases by investment funds and by owners of more than ten homes.

The cap that is still law

The 2 percent brake is Article 34 of Lei n.º 56/2023 (Law 56/2023, the "Mais Habitação" housing package). It covers new residential leases on homes that were let in the five years before the law took effect in October 2023. The starting rent cannot exceed the last rent on that home multiplied by 1.02. There are exceptions:

• it applies only where the rent is above the general limits by home size in a 2019 ordinance (Portaria 176/2019);
• a landlord may add yearly updates the previous lease skipped, going back up to three years;
• after deep renovation certified by the council, the cost of the works can be added, up to 15 percent a year.

The Government wants it gone. Its rental bill, Proposta de Lei n.º 103/XVII, approved by the Council of Ministers on 9 July, would repeal Article 34. The draft decree annexed to it says such limits on private autonomy helped push homes off the rental market. As we reported in September, the bill would also remove the cap on deposits. It passed its general vote on 30 September and is still in committee.

What it means for you

• Your yearly update. The legal coefficient for 2027 allows a rise of up to 2.56 percent, based on INE's inflation figure, ECO reported. Landlords may apply it only if they choose to. A 1 percent ceiling would replace it only if BE's amendment passes.
• A new lease on a home let before. Until a decree repeals Article 34, the 2 percent rule remains in force, within the exceptions above.
• When to watch. Debate and votes on the amendments start on 18 November, according to Lusa, ending with the final vote on the whole budget on 24 November.