If you signed your rental contract after the Housing Law came into effect in May 2023, be prepared: when it's time to update your annual rent, you'll see the biggest increase since the IRAV Index was created. The National Institute of Statistics (INE) just closed November with an IRAV of 2.29%, the highest level since the series began a year ago. For older contracts, those signed before the new law, things get even more serious: the increase is set at 3%, according to the latest confirmed inflation data from November 2025.
Since May 26, 2023, the IRAV has been the mandatory reference for updating rents for primary residences in new contracts. This index always remains below the CPI, which was the previous benchmark and continues to be used for older contracts.
So, if you're a landlord and this month you have to notify your tenant about the annual renewal, you need to tell them that the rent will increase by 2.29% if the contract is linked to the IRAV (Real Estate Housing Index), or by 3% if it's linked to the CPI (Consumer Price Index).
The IRAV has risen four hundredths of a percent compared to last month and has already reached a record high in its short existence, surpassing the 2.28% of December 2024. It has been above 2% for six consecutive months, and since May of this year it has been gradually rising from 1.99%. The lowest point was in March, at 1.98%.
On the other hand, inflation moderated in November to 3%, one tenth of a percent lower than the previous month. It has been fluctuating within that range for three months, closing 2025 with one of the highest rates of the year.
And how much does the rent increase depending on when you signed the contract? According to calculations by idealista/data, contracts subject to the IRAV (Real Estate Housing Tax) that are up for renewal now will see an average increase of around €250 per year, or about €21 more per month. In major cities, where rents already exceed €1,100 per month, the increase will be greater: in Barcelona, Bilbao, San Sebastián, Madrid, Palma, and Valencia, the annual increase will be over €300.
Contracts signed before the Housing Law continue to have their rents renewed according to the terms stipulated in the contract. They typically use the CPI (Consumer Price Index) as a reference, although sometimes they agree on another index (never above the inflation rate). With November's inflation rate at 3%, these rents will increase by an average of about €330 per year, which is about €27 more per month. In major cities, the increase can exceed €400 annually, and in Barcelona, it almost reaches €500.
What every landlord should remember
Landlords and tenants need to be clear on what the Urban Leases Law says: “The updated rent will be payable by the tenant starting the month following the month in which the interested party notifies them in writing, indicating the percentage increase and, if the tenant requests it, attaching the INE (National Institute of Statistics) certificate. A note on the previous month's receipt is sufficient.”
In short: if you want to raise the rent, make sure it's included in the contract, and give at least one month's notice. This way, the increase takes effect the following month. For example, if the contract turns one year old on January 19th, you can give notice in December that the rent will increase by 2.29% (according to the latest official data), or 3% if the contract is from before May 2023.
Remember this: if the rental agreement doesn't mention an annual rent increase, the landlord cannot raise your rent for the duration of the contract. It's that simple.
Now, regarding the Housing Rental Reference Index, or IRAV. This index combines several data points: the CPI, core inflation, and the differences between how these two grow each year, month by month. It also includes a parameter proposed by the Directorate General for Economic Policy, which relates to the long-term expected growth of the index.
All these differences are then adjusted using a moderating coefficient, proposed jointly by the Directorate General for Housing and Land and the Directorate General for Economic Policy, based on the state of the rental market at that time.
So what happens with all this? Well, the index used as the ceiling for updating rental prices each year will be the lowest value among the annual variation of the CPI, core inflation, and the average adjusted according to the approved methodology.
When this index is published, the National Statistics Institute (INE) is fulfilling its obligation under the Law on the Right to Housing: before December 31, 2024, the agency must define a reference index for the annual update of rental contracts. This index serves as a limit to prevent disproportionate increases in rent.
