IRAV: What It Is and How It Is Calculated (2026)

The IRAV, or Residential Rent Reference Index, is something every tenant should be aware of. Today, we’ll explain EVERYTHING you need to know about this index, which is used to calculate your rent.

What is the IRAV index?

The Housing Rent Reference Index ( IRAV ) is a new index created by the National Institute of Statistics (INE). Its primary purpose is to determine rent adjustments in residential lease agreements. 

It was in 2025 that the IRAV replaced the well-known CPI as the benchmark for calculating any increase in apartment rent. It took effect for contracts signed on or after May 26, 2023. 

This table or index is calculated each month, and its value serves as the upper limit for rent adjustments. However, for all leases signed before May 26, 2023, rent adjustments are based on the CPI.

You might be interested in: how to draw up a lease agreement.

Origin

The IRAV was created in response to the need to comply with Law 12/2023, which establishes the right to housing. The intention was to replace the CPI (Consumer Price Index) used to regulate rental contracts. 

That said, the primary goal is to cap rent increases, especially in a high-inflation environment. This provides greater stability to the real estate market.

Differences Between IRAV, VAT, and Corporate Income Tax

IRAV, VAT, and corporate income tax differ significantly and should NOT be confused when applying them. In the box below, we will provide a comparative analysis, highlighting their differences to clarify these concepts.

Who is required to pay?

The Residential Rent Price Reference Index is NOT a tax that must be paid, but rather an index that regulates rent prices. It applies to certain areas of the residential market where there is high demand. 

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

What are the exceptions to the IRAV?

The IRAV ( Housing Rent Price Reference Index ) does not apply to all rental agreements. There are some exceptions, such as agreements signed before May 25, 2023.

But let's look at some other, more detailed exceptions:

Contracts entered into before May 25, 2023

• Vacation Rentals
• Rentals of rooms, commercial spaces, offices, garages, and storage units
• Contracts without an adjustment clause
• Large clamps in non-tensioned areas

You might be interested in: Gran Tenedor España.

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 there is no doubt about the state 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 is through a practical example.

Case Study: Calculating the IRAV

Suppose a lease agreement for a house in Buñol was signed in June 2024, with a monthly rent of 900 euros. When the first year ends in June 2025, the landlord will likely want to increase the rent.

In that case, the landlord or property owner must follow these steps:

• You must notify the tenant of your decision one month in advance, that is, in May 2025.
• You should look for the data from the new index that the INE was supposed to publish in May 2025; if you cannot find it, you should use the most recent data available.
• If the increase is scheduled to take effect in July, you can use the May 2025 figure.
• Suppose the index for that month was 2.15%; in that case, the rent should be calculated using 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 certain implications and considerations that should not be overlooked:

• A significant change in the way the rental of homes is regulated.
• It provides a framework of stability and predictability for both landlords and tenants.
• It caps profits, but provides a clear and official benchmark.
• Avoid litigation and uncertainty.

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Where can I get information?

The recommended source for consulting the IRAV is the INE (National Institute of Statistics) website. It is supposed to be published monthly, generally around the middle of the month, and should reflect data from the previous month. 

You can also check the IRAV using the official calculator provided by the Ministry of Housing. The ministry has set up a website that provides transparency regarding updates to the maximum rent, in accordance with current legislation.

How do you file and pay the IRAV?

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

In fact, it affects any rental income you may receive. This income MUST be reported on your personal income tax return.

You may also be interested in: 2025 benchmark.

Recommendations for compliance

To help you comply with the IRAV, here are some specific and practical recommendations:

• Check the IRAV before setting or adjusting rents
• Make sure the rent does not exceed the IRAV cap in high-demand areas
• Check if you're in a high-stress area
• Apply the annual updates correctly
• Do not exceed the IRAV limit by more than 30% in high-demand areas
• Make sure the lease agreement reflects the agreed-upon price and complies with the regulations 
• Seek professional advice
• Contact the Tax Agency or your regional housing authority to clarify any questions you may have about high-demand areas or exemptions
• Take advantage of special offers and benefits

Frequently Asked Questions About IRAV

What is the IRAV?

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

How often is it updated?

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

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

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

 Can the landlord charge more than the agreed-upon amount?

Not in high-demand areas, with some exceptions, such as improvements that justify an additional 10%. However, small landlords may maintain the previous rent, which must have been adjusted by 3% in 2024.

What happens if the IRAV is not followed?

You may be subject to fines ranging from €90,001 to €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 contract renewals signed on or after May 26, 2023, you should use the IRAV. However, for contracts signed before that date, the limit is 3% in 2024.

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Conclusion

If you're thinking about renting a home, remember to apply the IRAV, and if you need advice, just contact us—talk to the experts at Domoblock! 

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