Updating your rent in 2026: How to calculate it with the IRAV

The annual rent update is no longer automatically calculated using general inflation. If a tenancy agreement reaches an anniversary, the increase is subject to a dual regime: contracts signed from 26 May 2023 onwards must mandatorily use the Reference Index for Housing Lease Updates (IRAV), while only earlier contracts may retain the traditional CPI if this was agreed in writing.

Which index you should apply according to the contract date

Law 12/2023 introduced a structural reform to the Urban Leases Act (LAU), modifying the monetary update rules to decouple residential rents from the volatility of the Consumer Price Index (CPI). The application of one index or another strictly depends on the date the document was formalised:

• Contracts signed from 26 May 2023: The maximum update is set by the IRAV published by the National Institute of Statistics (INE). Even if the contract text mentions the CPI, the clause is legally limited by this new binding cap.
• Contracts signed before 26 May 2023: The express agreement between the parties governs. If the contract explicitly stipulates an update according to the CPI, the year-on-year general CPI rate for the corresponding month will apply, unless landlord and tenant voluntarily agree on another reference.
• Contracts without a review clause: If the document does not include an explicit clause regulating the annual update, the rent cannot be increased under any circumstances during the term of the contract or its mandatory extensions.

The decoupling between CPI and IRAV

The practical difference between the two indices is notable. In August 2026, the year-on-year general CPI rate climbed to 4.3%, according to official data published by the National Institute of Statistics (INE). In the same period, the official IRAV stood at 2.47%.

This divergence of almost two percentage points mitigates the impact of the cost of living on tenants residing under contracts regulated by the new legislation, while establishing predictable profitability for landlords. The behaviour of the IRAV throughout 2026 reflects this moderation compared to general inflationary pressures:

Numerical example: how to calculate the increase step-by-step

To illustrate the practical calculation, let's take the case of a home with a contract signed in September 2023, whose agreed monthly rent amounts to 950 €/month. When its anniversary falls in September 2026, the fee should be reviewed using the latest available IRAV data, which corresponds to August 2026 (2.47%, according to the INE).

1. Identify the current rent: 950.00 €.
2. Locate the applicable percentage variation: 2.47%.
3. Calculate the monthly increase: 950 € × 0.0247 = 23.47 €.
4. Determine the new monthly rent: 950 € + 23.47 € = 973.47 €/month.

If this same contract had been formalised before May 2023 and was contractually subject to the general CPI for August 2026 (4.3%), the monthly increase would amount to 40.85 €, placing the new monthly payment at 990.85 €. The application of the IRAV in this illustrative example means a difference of 17.38 € per month (208.56 € per year).

Legal deadlines and requirements for notifying the update

Article 18 of the LAU precisely defines the mandatory procedure for the increase to be fully effective. The landlord cannot apply the increase tacitly or retroactively.

• Written notification: The increase must be reliably communicated to the tenant (by burofax, registered letter with acknowledgment of receipt, or email if this method was expressly agreed upon in the contract for notifications).
• Notice period: The communication must be sent at least 30 calendar days in advance of the date on which the revised monthly payment is due. If notice is given with only 10 days' margin, the increase will not take effect for that payment, but for the next one.
• Breakdown of the calculation: It is mandatory to attach the percentage applied, the reference month used, and a copy or link to the official INE publication where the data is recorded.

Additional limits in Strained Residential Market Areas

The ordinary update of an ongoing rent should not be confused with the setting of the initial price in a new contract. In municipalities declared Strained Residential Market Areas (ZMRT), additional restrictions apply, set by the State Reference System for Housing Rental Prices (SERPAVI) of the Ministry of Housing and Urban Agenda (MIVAU).

For existing contracts that simply reach their anniversary, the application of the IRAV operates normally in both strained and non-strained areas. However, when the contract expires and an extraordinary extension must be drafted, or a new document formalised with a different tenant, the legal framework imposes additional conditions:

Census registration data for deposits from the Institut Català del Sòl (INCASÒL) reflect that in Cataluña —where this containment regime is actively applied— the average effective closing rent stood at 884.19 €/month (+2.13% year-on-year) in the fourth quarter of 2025, while formalised contracts fell by 8.9% annually (26,931 operations). This shows that, while effective prices stabilise, documentary formalisation demands absolute rigour to comply with the caps without incurring legal contingencies.

To ensure that every procedure, burofax, and calculation strictly adheres to current regional and national regulations, it is advisable to cross-reference documentation with a real estate professional before issuing the annual settlement.