Article

Rent updating coefficient for 2023

Law no. 19/2022, dated 21st of October, which determines the rent updating coefficient for 2023, creates an extraordinary rental support, reduces the VAT on electricity supply and establishes a transitory pension updating system

On October 21st, Law no. 19/2022 which determines the rent updating coefficient for 2023, creates an extraordinary rental support, reduces VAT on electricity supply and establishes a transitory pension updating regime, was published in the Portuguese Official Gazette.

With regard to real estate law, we highlight the following change:

1. Determination of the rent update coefficient for 2023

Pursuant to paragraph 1 of Article 1077 of the Portuguese Civil Code, landlord and tenant are free to agree on the possibility of updating the annual rent amount as well as the respective regime. In the absence of an agreement between the parties, paragraph 2 of the referred article refers that the rent may be updated annually in accordance with the update coefficients in force.

This subject brings us to article 24 of Law nr. 6/2006, of February 27, that approved the new urban lease regime (hereinafter referred to as "NRAU"), which states that the annual update coefficient for the rent of the several types of leases - both urban and rural - is the one resulting from the total variation of the consumer price index, excluding housing, corresponding to the last 12 months. The notice with the coefficient is published in the Portuguese Official Gazette by October 30th of each year. As an example, Notice no. 17989/2021 established that for the year 2022, the rent updating coefficient would be 1.0043.

Law no. 19/2022, however, establishes that during the calendar year of 2023 the annual rent update coefficient of the several types of leases set out in article 24 of the NRAU will not apply, and the rent update coefficient of the several types of urban and rural leases in force in the calendar year of 2023 will be 1,02, without prejudice of a different agreement between the parties.

Therefore, for lease agreements that refer to the update of the rent foreseen in article 24 of the NRAU or for the respective Notice in the Portuguese Official Gazette, a coefficient of 1.02 will be applicable.

This Law shall enter into force on the day following its publication.

To access the full version of Law no. 19/2022, of 21st of October please click here.

For more information on this topic, please contact
Marta Gouveia Gomes
 

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