The government will not cut rents in 2024, which will be updated by 6.94%, while the government has approved measures to strengthen support for tenants.
Unlike what happened this year, when a cap was placed on the renewal of rents, which increased by 2% instead of the statutory 5.43%, there will be no such caps in 2024 as the government decided to strengthen support for tenants with income up to the 6th income tax category and effort rates with income above 35%.
As a way of mitigating the impact of the rent update, the government approved this Thursday a measure that automatically updates extraordinary income support by adding 4.94% to the cost of the monthly rent, with this increase being granted even if it involves exceeding the current maximum rent amount. support (which is 200 euros).
Additionally, tenants who are not currently receiving extraordinary rent support but see their effort level exceeding 35% with the renewal scheduled for 2024 may upon request request to be covered by this measure, provided: that their contract was concluded by March. 15, 2023.
The criterion that income support only targets contracts signed before that date will remain, while support will be strengthened to mitigate the impact of rent renewals under the same criteria, the minister said.
In practice, a rental agreement worth 700 euros will increase in 2024 to 748.58 euros per month due to adjustment for inflation. In a contract worth 900 euros, the increase will be 62.46 euros.
Asked whether the rent cut in 2024 could be seen by the tenants’ union and opposition as a concession to landlords, the Housing Minister said the measure was meant to be responsive to families and ensure stability in the rental market, rents and tenants’ ability to pay rent.
“The vast majority of lease agreements are concluded [de inquilinos] up to level 6 [de rendimentos do IRS] and the vast majority of rates above 35% are up to level 6,” the minister said, emphasizing that we are talking about a “legal” coefficient (for rent renewal), which “does not depend on the choice of the parties.” Thus, the decision involves Improving tools to mitigate the impact of rent renewals.
In addition, the value of rent that can be deducted from the IRS will increase from the current 502 euros to 550 euros in 2024, and this measure will be universally applicable, i.e. targeting all tenants with a rental agreement.
Under current law, a 6.94% rent increase in 2024 will apply to both urban and rural areas.
By law, rent values are generally subject to annual renewal, which is applied automatically based on inflation.
The NRAU stipulates that the National Institute of Statistics (INE) is responsible for determining the income update rate, which must be included in the notification, which must be published in the Official Gazette before 30 October of each year to take effect.
Only after publication in the Diário da República will owners be able to announce a rent increase to tenants, and the increase may not actually occur until 30 days after this notice.
According to the rental law, the first renewal may be required one year after the entry into force of the contract, as well as one year after the previous renewal, and the landlord must provide written notice, at least 30 days in advance, of the updated rate and the new income received in the result of this calculation.
If they do not wish to do so, landlords are not required to apply this update.
Author: Lusa This João Reis Alves
Source: CM Jornal
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