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New Rental Index: Reference for New Lease Contracts

New Rental Index Reference for New Lease Contracts - New Rental Index: Reference for New Lease Contracts

The Housing Law approved in 2023 introduced a significant change: the possibility of regulating the price of rentals in stressed areas. The aim is to facilitate access to housing in those areas where demand is much higher than supply. Almost a year after the publication of the law, the new rental index has already come into force.

What is the rental price benchmark?

It's a value that regulates the price of rentals. Specifically, it establishes a maximum limit for monthly payments. However, this only applies to areas declared as stressed. It is important to remember that the autonomous communities have the power to make this declaration. So far, Catalonia is the only one that has taken advantage of this possibility.

How will the new rental index work

To calculate this new index, a series of values will be considered: from the surface area of the home to its state of conservation, year of construction, height and aspects such as whether it has an elevator, garage or communal areas.

When is the benchmark applied?

In these stressed areas, the new rental benchmark applies in two circumstances:

• That it is a new rental by a large holder. What is a large property holder? It'll be a person that has more than ten rental properties. However, it could be up to five properties if those are in the same stressed area.
• That the home has not been rented in the last five years, regardless of whether the landlord is a large holder or a small owner.

In any of these cases, the owner must ensure that the rent does not exceed what the rental index for that home indicates.

What happens with contracts already in force?

This rental index, or reference index, does not apply in all cases, even if the home is in a stressed area. The agreed rental price remains the same when the contract is in force. The owner can only increase the monthly payments by the 3% required by law for 2024.

The same applies to a new rental as long as it is a home rented in the last five years and is from a small owner. In that case, it is possible to maintain the price of the previous contract, plus a 3% update (10% if there were improvement works), even if the monthly payment is higher than what the new rental reference index indicates.

Where can we check the reference index? What's its validity?

The new index for rentals is available on the website of the Ministry of Housing and Urban Agenda. Enter the address or cadastral reference and some basic information about the home to obtain a report that indicates the minimum and maximum rental price for that property.

Regarding the validity of the measure, it is three years, although the law gives the possibility of extending it annually.

If you are looking for housing to rent, your new home awaits you at Spainhouses.net. Besides, you can check rental prices by city or area so you can choose with better criteria.

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