Rent Price Review in 2025: A Detailed Guide

The Housing Law, approved in 2023, introduces significant changes to how rental prices are updated in Spain. Starting in 2025, a new index from the National Institute of Statistics (INE) will replace the Consumer Price Index (CPI) as the main reference. This article explains in detail how this new system will work and what implications it has for tenants and landlords.

What changes in 2025?

The main novelty is the introduction of a new reference index developed by the INE, specifically for updating rents. This index, which is published before December 31st of each year, seeks to offer greater stability in rent updates, avoiding the fluctuations that the CPI could generate.

How will the review be applied?

• Update Date: The rent price update will be applied on the anniversary date of the contract. For example, if the contract was signed in March 2024, the first update with the new index will be in March 2025.
• Index to be used: The INE index published in the month prior to the contract's update date will be used. Following the previous example, if the update is in March 2025, the index published in February 2025 will be used.
• Calculation of the new rent: To calculate the new rent, the percentage indicated by the INE index will be applied to the current rent price. For example, if the current rent is 1,000 euros and the INE index is 2%, the new rent will be 1,020 euros.
• Communication to the tenant: The landlord must notify the tenant of the rent update at least one month before the application date.

Important nuances:

• Contracts prior to the Housing Law: Contracts signed before the entry into force of the Housing Law will be progressively adapted to the new system.
• Update limits: Although the new index is the main reference, the Housing Law establishes limits on rent updates. In 2024, the limit was 3%, and we will have to pay attention to possible updates to these limits in subsequent years.
• Accumulation of updates: If the landlord did not apply the update in 2024, they could apply it in 2025, accumulating the updates of both years, as long as the contract allows it. In this case, the 3% corresponding to 2024 would be applied, plus the percentage indicated by the new INE index for 2025.
• Publication of the index: The INE published the methodology of the new index on December 20, 2024, and it is expected to publish the specific index for 2025 before December 31, 2024.

Practical example:

Let's imagine a rental contract signed in June 2024 with a rent of 1,200 euros per month. The update will take place in June 2025. Suppose the INE index published in May 2025 is 2.2%.

New rent: 1,200 euros + (2.2% of 1,200 euros) = 1,226.4 euros.

Conclusion:

The new rent update system seeks to offer greater stability and transparency. It is essential that both tenants and landlords know the details of this new system to avoid confusion and conflicts. If you have any questions, it is advisable to consult with a professional in the real estate sector or a legal advisor.