The rent update in 2026 is not calculated in the same way for all tenants. The date on which the contract was signed, the clause included in the document, and the index officially published when the annual period is fulfilled determine how much the rent can increase.
The main difference lies between the Consumer Price Index (CPI), traditionally used to update rents, and the Housing Lease Reference Index (IRAV), created after the Law for the Right to Housing to prevent disproportionate increases.
As a general rule, contracts signed before May 26, 2023 remain subject to the update system that was applicable when they were signed. In many cases, this means using the CPI provided in the contract. Contracts signed after that date are reviewed using the IRAV as a reference limit, according to information published by the National Institute of Statistics.
However, none of these indices allow for an automatic rent increase. The Urban Leases Law establishes that, if the contract does not contain an express update agreement, the rent cannot be reviewed annually.
When the rent price can be updated
The rent of a home can only be updated once for each year of the contract's validity, on the date when the corresponding annual period is fulfilled.
This means that the landlord cannot increase the rent at any time of the year nor modify it each time the INE publishes a new CPI or reference index figure. The update must coincide with the anniversary of the contract and respect the clause agreed upon by the parties.
Article 18 of the Urban Leases Law also establishes that, in the absence of an express agreement, no rent update will be applied. Therefore, it is not enough that inflation has increased: the possibility of reviewing the rent must be included in the contract.
What the CPI is and how it affects rent
The Consumer Price Index measures the general evolution of the cost of goods and services consumed by households, such as food, housing, energy, transportation, or leisure.
For years, the CPI has been the most common reference for updating rental contracts. When the contract expressly states that the rent will be reviewed according to this index, the landlord can apply the corresponding variation upon the completion of each year, always within the applicable legal limits.
In contracts signed before the entry into force of the Housing Law, on May 26, 2023, the previous legal regime remains in effect. If the clause mentions the CPI, it continues to be the applicable reference.
The Urban Leasing Law also provides that, when there is an update clause but no specific index or methodology is indicated, the Competitiveness Guarantee Index (IGC) must be used.
What is the IRAV or rental reference index
The Housing Rental Reference Index, known as IRAV, is an indicator developed by the INE specifically to limit the annual updates of housing rents.
This index began to take effect on January 1, 2025 and is published every month. Its purpose is to prevent a high rise in inflation from being fully passed on to the rent paid by tenants.
The IRAV is calculated by taking the lowest value between the annual CPI rate, the core inflation, and an adjusted average rate that incorporates a parameter related to the inflation target of the European Central Bank and a moderating coefficient.
Therefore, the reference index may be below the general CPI. Its function is to act as a moderation mechanism when prices are rising intensely.
What contracts are updated with the CPI
Housing lease contracts signed before May 26, 2023 continue to be governed, in general, by the regulations that were applicable at the time of their signing.
If the contract contains a clause that links the annual increase to the CPI, that will be the index that must be used. The calculation must be made with the latest officially published data when the update date arrives.
If the clause allows for rent review but does not specify which reference to use, the Urban Leasing Law refers to the Competitiveness Guarantee Index.
On the other hand, if there is no update clause, the landlord cannot apply either the CPI or another indicator unilaterally.
What contracts are updated with the IRAV
According to the information published by the INE, rental contracts signed after May 26, 2023 are reviewed using the IRAV as a reference.
In these contracts, the new index operates as a maximum reference limit for annual updates. This means that, although the contract mentions an increase linked to the CPI, the increase should not exceed the officially published IRAV that is applicable.
The date of May 26, 2023 is decisive because it corresponds to the entry into force of the Law for the Right to Housing. Although the IRAV began to be published in 2025, the transitional regime of the law maintains the previous system for contracts entered into before that date.
Differences between the CPI and the IRAV
The CPI and the IRAV do not measure exactly the same thing nor do they serve the same function.
The CPI reflects the general inflation of the economy, while the IRAV has been specifically designed to limit the annual update of residential rental contracts.
The CPI can rise sharply due to the increase in electricity, fuels, or food. The IRAV, on the other hand, incorporates a moderation mechanism to prevent those variations from being fully passed on to rents.
For this reason, in the same month, the CPI may be, for example, at 3.5%, while the applicable IRAV may be lower. In a contract subject to the new index, the landlord could not apply the entire increase of the CPI if it exceeds the reference limit.
How to know which index applies to each contract
The tenant must first check the date on which the contract was signed. If it is before May 26, 2023, the update clause must be reviewed to see if it mentions the CPI, the IGC, or another permitted formula.
If the contract is after that date, the IRAV published by the INE must be consulted and it must be checked that the percentage applied by the landlord does not exceed that limit.
It is also necessary to verify that the annual period of the contract has arrived and that the owner has correctly communicated the review.
The publication date of the index should not be confused with the contract signing date. The Law requires the use of the latest official data that was published when the update is to be made.
How the rent increase is calculated
The calculation consists of applying the corresponding percentage to the rent that is paid at that moment.
For example, if a tenant pays 900 euros per month and the applicable index allows for an increase of 2%, the increase will be 18 euros:
900 euros × 2% = 18 euros
The new monthly rent will be 918 euros.
If the contract establishes an update by CPI of 3.5%, but due to its date is subject to an IRAV of 2.2%, the increase would be limited to 2.2%.
In that case, a rent of 900 euros would increase by 19.80 euros and would be set at 919.80 euros per month.
Which month of the CPI or the IRAV should be used
The applicable percentage does not have to coincide exactly with the month in which the contract was signed. The rule establishes that the last index officially published on the date when the rent is to be updated must be used.
For example, if a contract reaches its annual term on August 5, it must be checked what the last CPI or IRAV published by the INE was up to that day.
An estimate, an advanced data, or an index published after the date when the update should have been made cannot be used.
The owner must communicate the increase to the tenant
The new rent does not start being charged automatically on the day the annual term is fulfilled.
The Urban Leasing Law establishes that the updated rent will be enforceable from the month following the one in which the update is notified in writing to the other party.
The communication must indicate the applied percentage. If the tenant requests it, the owner must provide proof of the index used through the corresponding official reference.
The communication included in the receipt of the previous month's rent may also be considered valid, as long as it clearly identifies the update.
Can the increase be charged retroactively?
The update usually cannot be claimed retroactively for the months prior to its communication.
Even if the contract reached its annual term several months earlier, the new rent is only enforceable from the month following the notification. The owner does not necessarily lose the right to update in the future, but cannot automatically demand the differences corresponding to months in which the review was not communicated.
For example, if the annual term was fulfilled in January but the owner communicates the increase in June, the new rent will normally be enforceable from July, not from January.
What happens if the contract does not include an update clause
When the contract does not contain an express clause that allows for rent review, the rent must remain unchanged during its validity.
The landlord cannot justify an annual increase by claiming that the cost of living has risen or that the CPI has reached a certain percentage.
To subsequently introduce an update, an agreement between the landlord and tenant would be necessary. One of the parties cannot unilaterally modify the contract.
The extraordinary limit of 2% is no longer in effect
In March 2026, the Government approved a royal decree-law that temporarily established a limit of 2% for certain rent updates until the end of 2027.
The rule came into force on March 22, but Congress rejected its validation on April 28, 2026. The repeal was published in the BOE on April 30, so the extraordinary limit ceased to be in effect.
Therefore, as of July 2026, it cannot be stated that there is a general cap of 2% for all rents. The update must be calculated according to the ordinary regime of the Urban Leasing Law, the date of the contract, its review clause, and the corresponding CPI or IRAV.
The IRAV is not the index to set the price of a new contract
The IRAV should not be confused with the State Reference System for the Price of Rental Housing.
The IRAV is used to calculate or limit the annual increase within a contract that is already in effect. The state system of reference prices can be used to limit the initial rent of certain new contracts in areas declared as having a tense residential market.
They are different instruments. One affects the annual update of the rent and the other can condition the price with which a new rental is signed.
What a tenant should review before accepting an increase
Before paying the new amount, it is advisable to check the date of the contract, the update clause, the expected index, the latest data published by the INE, and the date on which the landlord communicated the increase.
In contracts after May 26, 2023, it should also be verified that the increase does not exceed the applicable IRAV.
If the percentage does not match the contract or the official index, the tenant can request an explanation of the calculation and the accreditation of the data used from the landlord.