IRAV: What it is and how it is calculated (2026)

The IRAV, or Housing Rental Reference Index, is something you should know about as a tenant. Today we explain EVERYTHING you need to know about this index, which is used to calculate your rent.

What is the IRAV index?

The Residential Lease Reference Index ( IRAV ) is a new table created by the INE (National Statistics Institute). Its main purpose is to renew the rent in a residential lease agreement. 

It was in 2025 when the IRAV replaced the well-known CPI as the benchmark for calculating any increase in apartment rents. It came into effect for contracts signed after May 26, 2023. 

This table or index is calculated each month and its value becomes the maximum limit for rent increases. However, all contracts signed before May 26, 2023, are subject to rent increases based on the CPI.

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Origin

The IRAV originated from the need to comply with Law 12/2023, which covers the right to housing. The intention was to replace the CPI or Consumer Price Index used to regulate rental contracts. 

However, the primary objective is to put a cap on rent increases, especially in an environment of high inflation. This provides greater security to the real estate market.

Differences between IRAV, VAT, and ISLR

The IRAV, VAT, and ISLR differ significantly and should NOT be confused when applying them. In the following box, we will conduct a comparative analysis, seeking to differentiate them in order to clarify their concepts.

Who is required to pay?

The Housing Rental Price Reference Index is NOT a tax that must be paid, but rather an index that regulates rental prices. It applies to certain areas of the residential market that are under pressure. 

In this regard, there is no legal obligation to pay the IRAV, but certain landlords are required to apply its limits when setting or updating rental income for a property.

What are the exceptions to IRAV?

The IRAV, or Housing Rental Price Reference Index, does not apply to all rental contracts. There are some exceptions, such as contracts signed before May 25, 2023.

But let's look at some other exceptions in more detail:

Contracts prior to May 25, 2023

• Seasonal rentals
• Rental of rooms, commercial premises, offices, garages, and storage rooms
• Contracts without an update clause
• Large holders in non-stressed areas

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How to calculate the IRAV: Step by step

The exact formula is quite technical and must be published in the BOE (Official State Gazette). The idea is to ensure that there are no doubts about the reality of the residential rental sector.

At the end of the day, the goal is simply to strike a balance between tenant protection and property rights. The best way to explain how the IRAV is calculated would be to use a practical example.

Case study for calculating the IRAV

Let's assume that a rental contract was signed for a house in Buñol in June 2024, with a monthly rent of €900. When the first year ends in June 2025, the landlord will likely want to increase the rent.

Then, the lessor or owner must comply with these steps:

• You must notify the tenant of your decision one month in advance, i.e., in May 2025.
• You should look for the information on the new index that the INE should have published in May 2025. If you cannot find this, you should use the closest data available.
• If the increase will take effect in July, you can use the May 2025 figure.
• Let's assume that the index for that month was 2.15%, then the rent should use this formula:

NR = €900 + (€900 * 2.15 / 100) = €900 + €19.35 = €919.35

• Then, the tenant would start paying €919.35 per month starting in July 2025. It's that simple.

However, this new calculation has some implications and considerations that should not be overlooked:

• Significant change in the way house rentals are regulated.
• It creates a framework of stability and predictability for both landlords and tenants.
• It limits profits, but provides a clear and official benchmark.
• Avoid litigation and uncertainty.

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Where can I find this information?

The recommendation for consulting the IRAV is the INE or National Institute of Statistics, on its website. It is supposed to be published monthly, usually in the middle of the month, reflecting the data from the previous month. 

You can also check any IRAV queries on the official calculator of the Ministry of Housing. This ministry has set up a website where it provides transparency in updating the maximum rent, in accordance with current legislation.

How do you report and pay IRAV?

As mentioned above, the IRAV is NOT a tax that must be declared or paid directly. It is an index that was created to regulate rental prices in high-demand areas.

In effect, it modifies any income you may have from rent. This income MUST subsequently be declared in your personal income tax return.

You may also be interested in: reference value 2025.

Recommendations for compliance

In order to comply with the IRAV, here are some specific and practical recommendations:

• Consult the IRAV before setting or updating rents.
• Ensure that the rental price does not exceed the IRAV upper limit in high-demand areas.
• Check if you are in a high-stress area.
• Properly apply annual updates
• Do not exceed the IRAV limit by more than 30% in stressed areas.
• Ensure that the rental agreement reflects the agreed price and complies with regulations. 
• Seek professional advice
• Contact the Tax Agency or the regional housing authority to clarify any questions about high-demand areas or exceptions.
• Take advantage of exceptions and benefits

Frequently asked questions about IRAV

What is the IRAV?

In May 2025, this equates to 1.99%, according to the INE).

How often is it updated?

You must update it annually, according to what is published by the INE in May.

How and when should the tenant be notified of the rent increase?

In writing, with at least one month's notice, before the contract renewal date, applying the IRAV (1.99%) for contracts after May 26, 2023.

 Can the owner rent above the stipulated amount?

Not in high-demand areas, with some exceptions, such as improvements that justify up to an additional 10%. However, small landlords can maintain the previous rent price, which should have been updated to 3% in 2024.

What happens if the IRAV is not respected?

You may be fined between €90,001 and €900,000 if the rent exceeds the IRAV limit by more than 30% in high-demand areas.

Would the IRAV affect contracts that have already been signed?

Yes, for updating contracts signed on or after May 26, 2023, you should use the IRAV. However, previous contracts are limited to 3% in 2024.

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Conclusion

If you are considering renting a property, remember to apply the IRAV, and if you need advice, just contact us.Consult the experts at Domoblock! 

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