In February of this year, rental contracts that must be reviewed could increase by up to 2.28%, according to the (IRAV) published this Wednesday by the National Institute of Statistics (INE). The indicator used to update prices corresponds to the interannual variation of the consolidated CPI from December of last year and will be published every month. The lag occurs because they are published a few weeks late.
The cap does not apply to all rental contracts, but depends on the date it was signed. Those that occurred before May 26, 2023, when it came into force, will continue to use the Consumer Price Index or the Competitiveness Guarantee Index (which is limited to 2%) as a reference to calculate the annual update, according to It has been agreed upon by both parties, or they can agree to adapt the contract and take the IRAV as a reference. In any case, all contracts signed after May 2023 will be subject to the new parameter.
While the CPI reflects the evolution of the prices of goods and services in general, the IRAV has been specifically designed to measure the evolution of the rental market, theoretically avoiding excessive levels. Its goal is to stabilize prices and offer greater predictability to both landlords and tenants. Nowadays, with 2% for 2022 and 2023.
The IRAV combines three references: the Consumer Price Index, underlying inflation – which excludes fresh food and energy as they are the most volatile – and a third adjusted value that considers the evolution of the previous two, the long-term growth that is expected of these (2%) and a moderating coefficient, established jointly by the ministries responsible for Housing and Economy, in order to reflect the particular circumstances of the rental market.
The Ministry of Housing and Urban Agenda has developed a virtual calculator, so that owners and tenants know what is the maximum price at which the rent can be updated. The application differentiates by type of contract. In this way, for a rental of 800 euros whose contract is prior to the date established by the norm, a maximum rent of up to 822.40 euros would correspond (if updated with the CPI), while for those subject to the formula of the INE would be 817.60 euros. The updates are annual, so contracts that began in March 2024 will have their first review with the IRAV in March 2025.
The index has no impact on lease contracts for commercial premises, offices, rooms, garages or storage rooms. Its scope of application is restricted to habitual residences, in line with the objectives of the Housing Law. It also does not influence the price initially agreed in the contract. This remains freely determined, unless the property is located in a stressed rental area.
The regulations indicate that the update clause must be included in the contract; Otherwise, the landlord has no right to demand it. It is the owner’s responsibility to request this annual review, following the legal limits and based on the date the contract was signed. If the landlord is late in the request, the price update is still valid, but he will not be able to claim retroactive payment for the previous months.
