This is a website for buyers, owners, and sellers of property in Spain, offering reliable information and resources to help you get things done with confidence. It is run by Mark Stücklin, author of the Spanish Property Doctor Column in The Sunday Times (2005-2008), and the book ‘Need to Know: Buying Property in Spain’ published by Collins.
Spain’s Housing Law, in force since May 2023, introduced significant changes to how residential rents are regulated and updated. Two key mechanisms are now in place to improve affordability and stability in the housing market:
- The Rental Price Reference Index – which sets maximum rental prices in areas officially declared as “stressed” by regional governments. This system limits how much landlords can charge when signing new tenancy agreements within those zones. The reference prices are based on specific characteristics of each home and are published by the Ministry of Housing through the SERPAVI platform.
- The Housing Lease Reference Index (IRAV) – a new rent update index established by the National Statistics Institute (INE) and effective from January 2025. It replaces the CPI for annual rent increases, offering a more predictable and inflation-buffered method for adjusting existing rents.
This guide outlines how both systems work, who they apply to, and how tenants and landlords can calculate legal rental limits and updates, ensuring compliance with the current legal framework.
Whether you’re entering into a new rental contract or updating an existing one, understanding these two tools is essential for navigating Spain’s evolving rental landscape.
1. Rental Price Reference Index for new contracts
Overview
In line with the Housing Law enacted in May 2023, the Spanish government has introduced a Rental Price Reference Index. This system regulates rent levels in “stressed areas” to control excessive housing costs and improve access to affordable rental housing. The Index applies only in regions where local authorities officially declare market stress.
What is the Rental Price Reference Index?
The Index sets benchmark price ranges for residential leases in declared high-pressure housing markets. These limits apply only in areas recognised as stressed by autonomous communities. The goal is to cap rising rental prices, counteract supply-demand imbalances, and support housing accessibility.
Who does it affect?
Tenants and landlords involved in new contracts in stressed areas are subject to the Index. Whether an owner is a small or large landlord, and the property’s rental history, determines how the price caps apply.
Three main use cases:
1. Property rented in the last five years:
- Small landlords: The new contract may not exceed the previous one’s rent, except for annual adjustments tied to indexing mechanisms.
- Large landlords (10+ properties): Rent must align with the upper limit set by the Reference Index.
2. Property not rented in the last five years:
- Price must follow the Index regardless of landlord size.
- Rent may rise up to 10% above the cap if qualifying improvements have been made.
3. Renovation or upgrades:
An increase of up to 10% is allowed if:
- Structural renovations were completed in the last two years, under Royal Decree 233/2013
- Energy efficiency improved by 30% or more
- Accessibility enhancements were made
Where is it being applied?
The Index can only be used in municipalities declared stressed by autonomous communities. Criteria for declaring a stressed area include:
- Housing costs (mortgage/rent plus expenses) exceed 30% of average household income
- Property prices have risen more than three points above CPI in the last five years
As of now, Catalonia uses the Index, affecting cities such as Barcelona. Other regions like Navarre and the Basque Country are preparing similar declarations.
How does the cap work?
The Index provides a rent price range based on objective features of the property. Owners must set rents within this range, which varies depending on conditions such as:
- Size (30–150 m²)
- Energy rating (A to G)
- Year of construction
- General condition (new, good, fair, poor)
- Amenities (e.g., lift, parking, pool, garden)
- Furnishing status
- Floor level
- Views
- Included services (e.g., concierge)
The more features/amenities a home has, the higher its permissible rent within the defined range.
How to check the maximum rent allowed
You can consult the Reference Index on the Ministry of Housing’s website: https://www.mivau.gob.es/vivienda/calculadora-precio-alquiler
- Go to the “Rental Price Reference System” section.
- Search using either the property’s cadastral address or interactive map.
- Input your property’s characteristics.
- The platform will provide a rent range. In declared stress areas, this becomes your rental ceiling.
Example: A flat in Barcelona’s Calle Valencia may have a maximum rent of €984/month; one on Calle Madrazo may be capped at €847/month—according to their unique attributes.
To check the legal rent range for a specific property in a stressed area, use the government’s Rental Price Reference System (SERPAVI):
This tool lets you enter your property’s characteristics (address, size, condition, amenities, etc.) and returns the rent range permitted by law.
What if my current rent exceeds the future limit?
Existing contracts are not retroactively capped. These rules apply only to new agreements. However, if a contract ends and a new one is drawn up in a stressed area, the new rent must follow the Index limits—particularly if the landlord is categorised as large-scale.
How long will the Index remain in effect?
Once an area is officially declared stressed, the Index applies for an initial three-year period. This term can be extended if housing pressures persist. The Index figures will be updated annually using new tax data, beginning with 2022 returns.
Conclusion
The Rental Price Reference Index introduces a structured system to limit rent inflation and address housing stress in select regions. Landlords and tenants entering new agreements should confirm whether the area is declared stressed and adjust rental terms accordingly. For accurate rent ranges and legal compliance, use the Ministry’s online Index tool.
2. Housing Lease Reference Index for annual updates
Overview
From 1 January 2025, Spain will update rents using the new Housing Lease Reference Index (Índice de Referencia de Actualización de Rentas de los Contratos de Arrendamiento de Vivienda or IRAV). Replacing the traditional CPI (Consumer Price Index) method, this new index is designed to offer a more stable and predictable rent update system under the Housing Law.
What is the rental update?
Rent updates allow landlords to revise the rent annually as agreed in the lease. This is outlined in Article 18 of the Urban Leasing Act (Ley de Arrendamientos Urbanos – LAU). Landlords must notify tenants of any rent change at least one month in advance, and only one update is permitted each year.
Why a new index?
Sharp increases in the CPI—particularly in 2022 when inflation reached 10.8%—prompted the Spanish government to disconnect rent updates from CPI. Temporary caps were introduced (2% in 2022–2023, 3% in 2024). The Housing Law replaced this system with a more stable reference: IRAV.
How the IRAV is calculated
IRAV is set by the National Statistics Institute (INE) and represents the lowest value from the following:
- Annual CPI variation
- Underlying inflation (CPI excluding energy and food)
A custom average rate based on:
- Alpha (0.5): a long-term stability coefficient
- Beta (2%): adjusted to reflect rental market dynamics and aligned with the ECB inflation target
This approach aims to avoid drastic changes in rental prices while maintaining fairness for both tenants and landlords.
Where can I see the IRAV?
IRAV is published monthly by the INE and will appear on its official website. The first publication was made on 2 January 2025. Future values will be released mid-month and reflect changes from the prior month. To see the latest data search online for “Índice de Referencia de Arrendamiento INE” and the latest page will be the top result.
How to calculate your 2025 rent update
Step-by-step example:
- Current rent: €1,200
- IRAV (e.g. 2.2%) = €1,200 × 0.022 = €26.40
- New monthly rent: €1,226.40
Alternatively use the Ministry of Housing online rental update calculator tool (in Spanish) here.
Rent increases apply in the same month the contract was signed, and landlords must notify tenants one month before the update.
When does the new system apply?
IRAV officially came into effect on 1 January 2025. From this date, all eligible rent updates must follow the new index.
Which rental contracts are included?
The IRAV applies to:
- Long-term rental contracts for primary residences
- Agreements signed after 25 May 2023 (effective date of the Housing Law)
It does not apply to:
- Short-term or seasonal rentals
- Rooms in shared residences
- Commercial units, offices, garages, or storage spaces
- Contracts signed before 25 May 2023 (unless otherwise agreed in writing)
Summary
- IRAV replaces CPI-based rent updates from January 2025 onward
- Updates are capped to ensure rental price stability
- Applies only to primary residence rental contracts signed after 25 May 2023
- Landlords must calculate adjustments using the monthly IRAV published by INE
- For the latest IRAV values, visit the INE’s website: https://www.ine.es
Disclaimer
Important note: This guide is not a substitute for legal advice
This guide is provided for informational and orientation purposes only and is not intended as a substitute for professional legal, financial, or other advice. While every effort has been made to ensure the accuracy and completeness of the information provided, no warranties or guarantees, express or implied, are made regarding its accuracy, completeness, or currency. The information contained in this guide may be outdated or subject to change without notice. Use of this guide is at your own risk, and the authors, publishers, and distributors accept no responsibility or liability for any losses or damages that may result from its use. It is strongly recommended that you consult a qualified professional for specific advice pertaining to your situation.
