Landlords will be able to raise their tenants’ rents by a maximum of 2% during 2023. Leases ending before 30 June 2023 may be extended for 6 months.
The aim of this extraordinary measure is to mitigate the effects that the rise in the Consumer Price Index (CPI) may have in the field of housing rental, given that it is a common index in contracts.
Landlords will be able to raise their tenants’ rents by a maximum of 2% during 2023. Rental contracts that end before 30 June 2023 may be extended for 6 months.
The Council of Ministers approved on 27 December 2022 the extension of the 2% limit on rent increases, which was agreed on 29 March of that year as part of the National Plan to respond to the economic and social consequences that Russia’s invasion of Ukraine is having on citizens.
The aim of this extraordinary measure is to mitigate the effects that the rise in the Consumer Price Index (CPI) may have in the field of housing rental, given that it is a common index in contracts.
The rent update may not exceed the result of applying the annual variation of the Competitiveness Guarantee Index, which is published by the National Statistics Institute every month and is capped at 2%. The use of this reference index responds to reasons of extraordinary and urgent necessity.
What can I do if my rental contract ends?
The tenant of a dwelling may negotiate with the landlord the increase in his rent.
– If the lessor is a large landlord, i.e. an individual or legal entity owning more than ten urban properties for residential use, the rent increase will be that agreed between the parties, although it may not exceed 2%.
– If the lessor is not a large tenant, the rent increase may be higher than 2% if both parties agree. If they do not reach an agreement, the increase will not exceed the result of applying the annual variation of the GCI (Competitiveness Guarantee Index), with a maximum of 2%.
Can I apply the CPI increase if I update the rent of my home?
No. The landlord of a property, when the time comes for the annual update of rents, cannot apply the CPI, even if it is stipulated in the contract, but the GCR (Competitiveness Guarantee Index).
Extraordinary extension of rental contracts
Rental contracts for permanent housing that expire between 28 December 2022 and 30 June 2023 will be extended, at the request of the tenant, for a further six months from the date of expiry, maintaining all their conditions.
The extension does not apply if the tenant needs the house to use it as a permanent home for himself or for his relatives in the first degree of consanguinity or by adoption, or for his spouse in cases of separation or divorce, provided that this case has been established in the contract.
For further information, please consult Tax Consultancy
