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 Residential Lease Reference Index (IRAV) is a new rate created by Spain’s National Statistics Institute (INE). Its main purpose is to regulate rent updates 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 introduced to comply with Law 12/2023 on the Right to Housing. Its purpose was to replace the Consumer Price Index (CPI) as the reference benchmark for updating residential rental contracts. 

The primary objective of the IRAV is to cap rent increases, particularly in periods of high inflation. This measure provides greater stability and predictability to the real estate market.

Differences Between IRAV, VAT, and Personal Income Tax (IRPF)

The IRAV, VAT, and Personal Income Tax (IRPF) are different concepts and should not be confused when applied. In the following section, we will provide a comparative overview to clearly distinguish each of them.

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. However, certain landlords are required to apply its limits when setting or updating residential rental prices.

What Are the Exceptions to the IRAV?

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

Let’s review some additional exceptions in more detail:

Contracts Signed Prior to May 25, 2023

• Vacation Rentals
• Room Rentals, Commercial Premises, Offices, Garages, and Storage Units
• Contracts Without an Update Clause
• Large Property Owners in Non–High-Demand Areas

You might be interested in: Gran Tenedor España.

How to Calculate the IRAV: Step-by-Step Guide

The exact formula is technical in nature and must be officially published in Spain’s Official State Gazette (BOE – Boletín Oficial del Estado). The purpose is to ensure transparency and reflect the realities of the residential rental market.

Ultimately, the goal is to strike a balance between tenant protection and property owners’ rights. The clearest way to explain how the IRAVis calculated is through a practical example.

Case Study: How to Calculate 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.

Then, the landlord 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 takes effect in July, you may use the May 2025 index.
• 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.

This new calculation method involves important 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 may limit profits, but it provides a clear and official benchmark.
• It helps prevent disputes and reduce uncertainty.

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Where Can It Be Consulted?

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 consult the IRAV through the official calculator provided by Spain’s Ministry of Housing. The Ministry has created an online platform that ensures transparency in updating the maximum rent in accordance with current legislation.

How Is the IRAV Reported and Paid?

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.

Yes, it affects any income you receive from rental activities. This income must subsequently be declared in your Personal Income Tax (IRPF) return.

You may also be interested in: reference value 2025.

Recommendations for compliance

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

• Consult the IRAV before setting or updating rental prices.
• Make sure the rent does not exceed the IRAV cap in high-demand areas
• Check Whether You Are in a High-Demand Area
• Ensure Annual Rent Updates Are Applied 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?

The rent increase must be communicated in writing at least one month prior to the contract renewal date, applying the IRAV (1.99%) for contracts signed on or 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 Respected?

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! 

The best investment you can make is one that is carefully researched and supported by experts who understand the market. Be one of those who make informed decisions.

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