IRAV: LIMIT ON UPDATING NEW HOUSING RENTS

As of January 2025, the Spanish National Institute of Statistics publishes the Housing Leases Reference Index (IRAV), which establishes a maximum percentage limit to the annual updates of housing rents provided for in the contract.

The applicability of this index, which replaces the 2% and 3% limitations that were already regulated in 2023 and 2024, respectively, as a result of the increase in prices resulting from the Ukrainian War, has been incorporated into an Additional Provision of the Urban Leases Law (LAU), and sets a ceiling that will vary over time depending on several variables.

Its main features are the following:

This limit is only applicable to new rental contracts signed after the entry into force of the legislative reform, i.e., those signed from May 26, 2023. Previous contracts, in force or extended, will continue to be updated normally according to the provisions of their own clauses (usually by the “IPC” Index).
The limit is only applicable to conventional housing lease contracts. It does not apply to business premises, offices, or other types of contracts outside the scope of the Urban Leasing Law. Nor are exceptions established based on whether or not they are located in stressed residential areas or whether or not the owner is a major tenant.
The index is calculated by weighting various other economic indicators and is updated monthly. Accordingly, the latest monthly index referring to the month prior to the month in which the update takes place will be applied to each contract. For example, a contract to be updated in March 2025 will take the annual index referring to February 2025.
The index can be consulted at any time by visiting the following official links:
https://www.mivau.gob.es/vivienda/calculadora-precio-alquiler; https://www.ine.es/consul/serie.do?d=true&s=IRAV1

To learn more about the practical application of the Index, or if you would like to deepen in any of the new aspects, you can contact our firm.

Balagué-Sala Lawyers