Article 18 of Spain’s Urban Leases Act (LAU) sets out how residential rents can be updated during a tenancy. If a contract allows for an annual rent review but does not specify an index, the benchmark is the Competitiveness Guarantee Index (IGC in Spanish).
In practice, however, most landlords and tenants still rely on the Consumer Price Index (CPI) as the benchmark for rent adjustments. The latest official data show a 2.3% increase in January 2026.
What is the CPI and how is it calculated?
The Índice de Precios al Consumo (IPC), or Consumer Price Index, is the main indicator used to track inflation in Spain. It measures how the cost of living changes over time and how this affects households’ purchasing power. A positive CPI signals rising prices; a negative rate indicates that prices are falling.
The CPI is compiled by the Spanish Statistics Institute (INE). The INE tracks price changes in a representative “shopping basket” of goods and services that households commonly buy, compares them with previous months and produces the monthly CPI rate.
How CPI is used to update rent in Spain
Under Article 18 of the LAU, landlords may update the rent once a year during the term of the contract, but only if an annual update has been expressly agreed in writing. If the contract includes a rent review clause but does not specify any index, the annual variation of the Competitiveness Guarantee Index (IGC) applies on the review date, using the latest available figure.
If the contract does not include any clause allowing for rent updates, the agreed rent will remain unchanged for the full duration of the lease.
In everyday practice, the CPI is the reference most often used in residential rental contracts. When a lease is linked to CPI, the figure applied is the CPI published two months before the review date. The INE usually releases official CPI data on the 15th of each month, and landlords must give tenants at least one month’s notice before the updated rent takes effect.
CPI trends in 2024, 2025 and 2026
According to INE data, the CPI has moved as follows:
MONTH | CPI 2024* (%) | CPI 2025 (%) | CPI 2026 (%) |
|---|---|---|---|
January | 3.40% | 3.00% | 2.30% |
February | 2.80% | 3.00% | |
March | 3.20% | 2.30% | |
April | 3.30% | 2.20% | |
May | 3.60% | 1.90% | |
June | 3.40% | 2.30% | |
July | 2.80% | 2.70% | |
August | 2.20% | 2.70% | |
September | 1.50% | 3.00% | |
October | 1.80% | 3.10% | |
November | 2.40% | 3.00% | |
December | 2.80% | 2.90% |
*In 2024, the Spanish government applied a 3% cap on rent increases for annual renewals. Where the CPI was below 3%, the rent increase had to follow the lower, actual inflation rate. In January 2026, the CPI stood at 2.3%.
How to calculate a CPI‑based rent increase
For both tenants and landlords, the method to calculate a rent increase linked to CPI is straightforward:
- Start with the current monthly rent.
- Convert the CPI percentage into a decimal (for example, 3% becomes 0.03).
- Multiply the current rent by this decimal to obtain the increase.
- Add this amount to the existing rent to get the new monthly payment.
Example calculation for a real rental contract
Consider a lease that is updated using the January 2026 CPI of 2.3%. If the tenant is currently paying €1,200 per month:
- 2.3% of €1,200 = €27.60
- Updated rent = €1,200 + €27.60 = €1,227.60 per month
This new monthly rent applies until the next anniversary of the contract and the following annual review.
The INE provides an online calculator that can be used to work out the updated rent. To use it, enter the current rent and the CPI figure from two months before the contract’s anniversary date.
This timing reflects the fact that rent is usually paid in the first days of the month, while the INE publishes final CPI data on the 15th. Once the updated amount has been calculated, the landlord must give the tenant at least one month’s notice before the new rent starts to apply.
How the contract date affects CPI rent updates
How much rent can rise also depends on when the contract is updated.
All residential rental contracts that were reviewed between 1 April 2022 and 31 December 2024 were temporarily disconnected from CPI as the direct benchmark. During this period:
- In 2022 and 2023, rent could increase by a maximum of 2% per year.
- In 2024, the cap was raised to 3%.
If the CPI in any of those years was lower than the relevant cap, the rent increase had to follow the lower CPI figure instead of the ceiling.
Rent updates in 2026
Since 1 January 2025, rental contracts signed after the new Housing Law came into force in May 2023 have been updated using a new index developed by the Spanish Statistics Institute (INE). This index, called Índice de Referencia de Arrendamientos de Vivienda (IRAV), or Rental Price Index, is calculated as the lowest of the following three annual rates:
- the rate of change of the CPI
- the rate of underlying (core) inflation
- the adjusted average annual rate of change
In January 2026, according to the latest data available, this new INE index stood at 2.3%, matching the CPI for that month.
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