2025 Rent Price Update: How the INE Index Affects Rent

The rental market in Spain continues to evolve in 2025, driven by new regulations and economic factors.

Among the most notable changes is the update to the reference index of the National Statistics Institute (INE) – known as the IRAV (Reference Index for Housing Lease Updates) – which aims to adjust rents in line with the economic reality.

What is the reference index and how does it affect rents?

As mentioned in previous blog articles, the reference index is a mechanism that allows rent amounts to be adjusted at the end of each year of the contract.

However, for this update to be valid, the contract must include a specific clause authorizing the annual revision. Additionally, the landlord must notify any changes at least one month in advance to the tenant. This ensures that both parties have clarity and time to plan.

How is the index calculated in 2025?

The reference index in 2025 considers the lowest value among three key indicators:

1. Annual variation of the CPI (Consumer Price Index): Reflects the general change in the prices of goods and services.
2. Annual variation of the underlying CPI: Excludes fresh food and energy to provide a more stable view of inflation.
3. Adjusted annual average rate: Defines a moderate value combining technical parameters established by the Ministries of Housing and Economy, including a moderating coefficient of 0.5% and an inflation target of 2%, aligned with the European Central Bank (ECB).

For example: If the rental contract signed in February 2024 sets a rent of €1,000, this could be updated in February 2025 using the index published by the INE. If the applicable index is 2.2%, the new rent would be €1,022.

When is the index published and to which contracts does it apply?

The INE publishes this index monthly on its website (https://www.ine.es), coinciding with the Consumer Price Index (CPI) data. The results include values with two decimal places, making it easier to apply when calculating rent adjustments.

It is important to note that this mechanism only affects contracts signed from May 2023 onwards. Previous agreements and those intended for non-residential uses, such as stores, offices, or garages, are excluded.

What does this mechanism mean for landlords and tenants?

For landlords, the new index provides a transparent tool for updating rents without negatively affecting tenants. On the other hand, tenants are assured that any increase will be moderate and proportional to the economic context.

Both parties should pay close attention to contract conditions, ensuring that clear clauses about price updates are included. It is also essential to closely follow the monthly publications from the INE to anticipate potential variations.

Manage Your Property Rental with KM2 Real Estate Services

At KM2 Real Estate Services, we understand that this regulation changes how property owners manage their homes.

That’s why, if you need advice on renting your property, our commercial department will propose a strategic marketing plan to carry out all necessary procedures in compliance with the current legislation.

Feel free to contact our agents for more information or visit us at any of our real estate offices in Barcelona and Madrid.

We look forward to seeing you!