2.47 per cent: the figure that caps your rent increase — not the 4.3 per cent inflation rate

Two figures, one publication day

Both readings come from 15 September and from the same office. The consumer price index for August stands at 4.3 per cent, seven tenths above July; the main driver, according to INE, was transport at 9.5 per cent, above all fuel. Core inflation, which excludes unprocessed food and energy, fell to 2.9 per cent. The IRAV stands at 2.47 per cent. On a rent of 1,000 euros, 4.3 per cent works out at 43 euros more a month, 2.47 per cent at 24.70 euros — over a year, 516 euros against 296.

The gap is by design. Under INE's methodology of December 2024, the IRAV is the lowest of three values: the annual rate of the consumer price index, the annual rate of core inflation, and an "adjusted average annual rate" given by the formula β + α × (rate − β), with α equal to 0.5 and β equal to 2 — the European Central Bank's medium-term inflation target. The adjusted rate is used only when both inflation rates are above two per cent, which was the case in August 2026. Above two per cent, then, only half the excess is passed through, and the lower of the two calculations counts — here the one based on core inflation. Because core inflation leaves energy out, a price jump driven by fuel barely reaches the rent cap.

Which contracts the IRAV governs

Ley 12/2023 on the right to housing, in force since 26 May 2023, added an eleventh additional provision to the 1994 tenancy law (Ley de Arrendamientos Urbanos, LAU): INE defines an index that serves "as a reference limit for the purposes of article 18". Whom it binds, INE states without hedging: contracts signed after 26 May 2023. Older ones fall under the fourth transitional provision of the same Ley 12/2023, to which the consolidated text in the official gazette also refers: they continue under the legal regime that applied to them, that is, under the clause the parties agreed.

Three boundaries decide entire groups of contracts. Article 18 covers only residential tenancies as defined in article 2 LAU; article 3 classes seasonal lettings as rental "for a use other than housing", so the IRAV does not apply to them. Article 4 takes out dwellings above 300 square metres and contracts whose initial annual rent exceeds 5.5 times the minimum wage. Updating is allowed only on the contract's anniversary, and there is no separate Canary index.

Without an express clause there is no increase at all

The most overlooked sentence sits at the very start of article 18 LAU: the rent may be updated only on the anniversary and "on the terms agreed by the parties" — and in the absence of an express agreement, no update applies. No index substitutes for a clause that is not in the contract. If the clause names a mechanism but neither an index nor a method, the Índice de Garantía de Competitividad applies instead. If it names more than the law allows, article 6 LAU steps in: stipulations that modify the rules of Title II to the tenant's detriment are null. Conversely, the index is a ceiling, not a target — less, or nothing at all, is lawful.

The letter: percentage, reference month, certificate

Paragraph 2 of article 18 sets the form: the updated rent is payable only from the month following the written notice; that notice must state the percentage applied, and if the tenant demands it, the INE certificate must be attached. The increase therefore does not take effect by itself and is not owed retroactively. The reference month is what goes wrong most often: what counts is the last index published at the time of the update. The IRAV appears with a lag of about six weeks — the August reading on 15 September. An anniversary on 20 September 2026 therefore runs on 2.47 per cent, one on 10 September still on 2.49 per cent. Anyone who receives a higher demand can ask in writing for the certificate and check the reference month; often the consumer price index was simply used instead of the IRAV. This text is information, not legal advice.

What the price index says about Canary rents — and what it does not

The "Vivienda en alquiler" heading in the same release rose 1.9 per cent on the year in the Canary Islands in August 2026, against 2.5 per cent in Spain; on the month, 0.1 against 0.2 per cent. The Canary reading has been at 1.9 per cent for three months, after 2.8 per cent in January.

What matters is what the series measures. Under INE's base-2025 methodology, the informants for residential rents are not the suppliers but the tenants themselves; each dwelling in the sample reports once a quarter, and what is recorded is the rent excluding community charges. The heading therefore tracks the rents actually being paid across the whole stock, sitting tenants included — and their rent moves, if at all, once a year. It is not a series of asking rents. What portals such as idealista or Fotocasa publish is the price demanded in the listings of a given month. Both numbers can be right at once, and they diverge for as long as new contracts are signed at higher rents than existing ones are updated to.