EDITORIAL |
In this article we will discuss the indexes to be applied in the updating of residential leases. Last January 2025, the index for the updating of rental income came into force. This index called: Housing Lease Reference Index (IRAV) will be applied only to contracts signed as of May 25, 2023, the date on which the new state housing law that implemented this system came into force.
The reference index for the annual update of rental contracts (IRAV) experienced a decrease in January, reaching 2.19%, which represents its lowest level in the last three months, according to data from the National Statistics Institute (INE). In December, this index stood at 2.28%, and in November it was 2.20%. This indicator establishes the maximum increase allowed for the updating of rental income. Currently, it applies only to contracts signed as of May 25, 2023, the date on which the new state housing law implementing this system came into force. For those housing rental contracts entered into prior to May 25, 2025, the limit established by the Urban Leasing Law (LAU) will apply.
This index (IRAV) is published monthly by INE with two decimal places, based on the Consumer Price Index (CPI), core inflation and annual variations in both rates. Other parameters and coefficients established by the Government are also considered, taking into account the situation of the rental market.
The methodology used to calculate this indicator allows the inclusion of additional variables such as the annual variation rate of the CPI or adjusted core inflation if these present lower values. However, this is not currently the case, as the INE has confirmed that the CPI variation in January was 2.9%.
For the year 2024, the rent update was exceptionally conditioned to a 3% limitation due to the generalized price increase caused by the conflict in Ukraine. From mid-2022 to 2023, such increase was restricted to 2%.
The updating of the rents is a right recognized to the lessor to adjust the rent during the contractual term, such update is reviewed at the end of the annuities from the date of granting of the lease. However, this possibility can only be demanded during the month of renewal of the contract and this clause must be clearly specified in the lease contract. Otherwise, the tenant has the right to refuse such an adjustment. Although this option is mentioned, other references such as the competitive guarantee index may be considered; however, these are only applicable if they are lower than the official limit.