IRAV: the index that caps Spanish rent increases

The short answer

The IRAV is the figure the INE publishes each month to cap how much the rent on a Spanish residential letting may rise at its annual update². It is defined as the lowest of three values: the annual CPI rate, the annual core CPI rate, and an adjusted rate that halves everything inflation runs above 2%. It reaches contracts signed on or after 26 May 2023³. The latest published is July 2026 at 2.49%, against a CPI of 3.6% for the same month⁶.

Where an index that is not in the rent article comes from

If you look in the Urban Tenancies Act for the article about raising the rent, you find it at once: article 18 is literally headed “Updating the rent”. And it gives the wrong answer. Read today, in its most recent version, it says that where the contract agreed to update the rent without specifying the index, the Competitiveness Guarantee Index applies, and that “in any event” the increase may not exceed the variation in the CPI¹. That is where the sentence on almost every page about this subject comes from: Spanish rent rises with the CPI.

The limit that actually governs a new contract sits three screens further down, in additional provision eleven, which the Right to Housing Act added to the same statute in 2023:

The National Statistics Institute shall define, before 31 December 2024, a reference index for the annual updating of residential tenancy agreements, which shall be set as the reference limit for the purposes of article 18 of this Act, with the aim of avoiding disproportionate increases in the rent of tenancy agreements.

That provision sets a ceiling “for the purposes of article 18” without touching the text of article 18, which still says the ceiling is the CPI¹. The reform preferred not to renumber anything. The result is that a reader can read the right article, in the right version, and come away with the old answer.

The index has existed since December 2024. It was defined by the resolution of the INE Presidency of 18 December 2024, published in the official gazette two days later, taking effect from 1 January 2025².

The formula, and the three examples the INE publishes

Clause one of the resolution says the index “shall be the minimum value among the annual rate of variation in the Consumer Price Index, the annual rate of variation in the core Consumer Price Index and the adjusted average annual rate” of the annex². And the annex defines that third term:

TVAMA = min ( β + α × (TVIPC − β), β + α × (TVIPCS − β) )

with α equal to 0.5 and β equal to 2, “which is the European Central Bank’s medium-term inflation target”². The two parameters were proposed jointly by the Directorate-General for Housing and Land and the Directorate-General for Economic Policy, and they can be changed.

What α does is halve the excess. If inflation stands at 2%, the adjusted rate is 2. If it rises to 4, the adjusted rate is 3. If it rises to 6, it is 4. An excess of inflation over the European Central Bank’s target reaches the rent at half its size.

And there is an asymmetry visible in the examples the INE publishes in its own methodology⁶:

When a rate sits below 2%, its adjusted version lands ABOVE it, so the minimum picks the raw rate. The INE writes this as a general rule: the adjusted rate is only used where the CPI and the core CPI are both above 2%⁶. So in a low-inflation year the index is not the CPI but the LOWER of two measures of inflation, which moderates the increase on its own.

The twenty-one months the index has existed

The INE publishes the series from November 2024. This is all of it:

Two things stand out. The first is the range: the index has moved between 1.98% and 2.49%, fifty-one hundredths of a point of travel, while the CPI it comes from ran from 1.99% to 3.58%. The second is that the binding term has been the adjusted rate in nineteen of the twenty-one months. Only in March and May 2025, when one of the two inflation rates dipped below 2%, did a raw rate govern.

Why you cannot work it out from the headline CPI

There is a practical trap here worth knowing before you try to check the figure at home.

The inflation rates the INE publishes, and which appear in the news, are rounded to one decimal: in July 2026, 3.6%. The index formula works on unrounded rates, which that month were 3.5831 for the CPI and 2.9888 for the core index. With the one-decimal rates the result drifts: in sixteen of the twenty-one published months it lands a hundredth of a point above or below the INE’s own figure.

The consequence is simple. The index is looked up, not estimated. And if somebody gives you a figure that does not match the published one, the most likely explanation is that they worked it out from the headlines.

There is a second, calendar trap. At the end of each month the INE publishes a flash estimate, which is the one that leads the news: on 28 August 2026 flash inflation was 4.3%. That estimate is not the index. The definitive August index did not exist until 15 September, and for rent purposes the figure in force through the whole first half of September was still July’s 3.6%⁶.

Which contracts it reaches, and why one day is worth more than a point

Transitional provision four of Law 12/2023 is what splits the market in two. Its first paragraph says that contracts signed before the Act came into force “shall continue to be governed by the legal regime that applied to them”³. Since the index arrived with that same Act, it does not reach earlier contracts: they keep the CPI ceiling of article 18.

The date is 26 May 2023. It is the only question the Ministry of Housing’s own calculator asks before requesting the rent⁷, and in July 2026 it separated 2.49% from 3.6%. On a rent of 900 euros that is 9.99 euros more a month and 119.88 a year, for the same property, in the same month, with the sole difference being when it was signed.

Paragraph 2 of the same transitional provision leaves a door open: the parties to an earlier contract may agree to bring it under the new regime³. And paragraph 3 clarifies that the reform does not affect the extraordinary measures that come next.

The two extraordinary caps, and the 2% that is not where everyone looks for it

Before the index there were three years of emergency limits, in article 46 of Royal Decree-Law 6/2022⁴. They are always cited as “the 2% cap” in 2022 and 2023 and “the 3% cap” in 2024, and both phrases hide something.

Article 46 mentions no 2% at all. What it says, for anniversaries falling between its entry into force and 31 December 2023, is that the increase may not exceed the result of “applying the annual variation in the Competitiveness Guarantee Index”⁴. The 2% appears somewhere else, in the annex to Law 2/2015 on de-indexing:

Where the rate of variation in the IGC is negative, the revision value shall be taken as zero, and where it exceeds the upper limit of the European Central Bank’s medium-term inflation target (2 per cent), that shall be taken as the reference value for revisions.

In other words: the famous rent cap was the ceiling the IGC has carried inside it since 2015, and that ceiling is defined as the European Central Bank’s inflation target, with a ministerial order empowered to change it should the ECB change its target⁵. A European monetary policy entered Spanish rent law through a statute on de-indexing the economy.

And that has a checkable consequence. The cap was only worth 2% while the IGC stood above its own ceiling. Through 2022 it did, peaking at 8.60% in October, so the cap worked as a clean 2%. But in October 2023 the IGC fell to 0.58% and in November to 0.10%. An anniversary falling on 31 December 2023 was capped at 0.58%, not at 2%.

The 2024 cap is the opposite story. Paragraph 2 of article 46 set a round 3%, with no index involved⁴. But the ordinary ceiling of article 18 was still there, and from March 2024 the CPI rate was already below 3%. Month by month, the 3% was only the binding limit in six of the year’s twelve months: in October and December 2024 the maximum lawful increase was 1.8%. The cap existed and did nothing.

From 1 January 2025 there is no extraordinary cap: article 46 has no paragraph 3.

The default index nobody looks at, and it stands at zero

There is a third index in this story, and it produces the most striking result of all.

Paragraph 2 of article 18.1 says that where the contract agreed to update the rent “without specifying the index or reference methodology”, the annual variation in the Competitiveness Guarantee Index applies¹. That is the case of any clause drafted as “the rent shall be updated annually”, and there are many.

The IGC has been continuously negative since May 2025, and intermittently since March 2024. In June 2026 it reads −0.76%. And the annex to Law 2/2015 turns a negative rate into a revision value of zero⁵.

So a contract whose update clause names no index cannot rise at all, not by one euro, with a CPI of 3.6%. It is the case none of the calculators on this search covers, the official one included.

The IGC also has its own calendar: it is published about two months after its reference month, while the CPI is published the following month. Article 18.1 names both indices in the same sentence and gives them the same “last index published” rule, so each one’s reference month is different. On 11 September 2026 the last published CPI was July’s and the last published IGC was June’s.

The reference month, which is yours and not today’s

Article 18.1 does not order you to apply the most recent index. It orders you to take as reference month “the one corresponding to the last index published on the date the contract falls due for updating”¹.

That is a condition about a publication date, and the INE publishes mid-month: the July 2026 index came out on 13 August⁶. So an anniversary falling on 12 August takes the June index, at 2.44%, and one falling on the 13th takes July’s, at 2.49%. Two days apart in the contract’s anniversary and five hundredths of a point apart in the increase.

And for a September anniversary the August index does not yet exist when the 1st arrives: it is published on the 15th. Until then there is no figure to apply, and the index that corresponds is July’s.

A worked example with real numbers

A flat let for 900 euros a month, contract signed in March 2024, with a clause saying the rent is updated with the CPI. The anniversary falls on 1 September 2026.

The reference month is July 2026, because its index was published on 13 August. That month the CPI ceiling was 3.6% and the INE index 2.49%, so the second governs: the maximum rent is 922.41 euros. That is 22.41 euros more a month and 268.92 a year.

Three variations change the answer, and none of them changes the property:

• Contract signed in January 2022. The INE index does not reach it, so the ceiling is the CPI’s 3.6%: 932.40 euros, 9.99 euros more a month than the new contract.
• A clause saying “shall be updated annually” without naming an index. The IGC applies, and it stands at zero: the rent stays at exactly 900 euros, under both regimes.
• A contract with no update clause. There is no increase, because article 18.1 provides that “in the absence of an express agreement, no rent update shall apply to the contract”¹.

And one more thing, which decides when it starts to be paid. Article 18.2 makes the updated rent payable “from the month following that in which the interested party notifies the other in writing, stating the percentage of change applied”¹. If the tenant requires it, an INE certificate must be enclosed, and a note on the previous month’s receipt is valid. What is not available is charging back the months in which no notice was given.

What the IRAV is not

It is worth separating it from two things it is often confused with.

It is not the state system of reference rent price indices. That other mechanism, the one behind the Ministry’s app, serves to cap the INITIAL rent of a new contract in a strained residential market zone, under paragraphs 6 and 7 of article 17 of the Act, and it only operates where the regional government has declared such a zone¹. The IRAV caps the updating of a contract that already exists, everywhere in the country and with no prior declaration of anything.

And it does not reach lettings for a use other than dwelling. Both article 18 and additional provision eleven sit in the title of the Act devoted to residential lettings. A business premises, an office or a seasonal let falls under article 4.3: the will of the parties, with the Civil Code filling the gaps, and no statutory ceiling on updating¹.