# How to calculate the rent increase based on the CPI

Having a rental house or living rented in a home, is very widespread today, especially because of the high price of buying a home in some areas. But of course, the price of these rentals does not remain stable over the years, but they are modified as the cost of living varies. They are updated according to the CPI, for which we will explain how to calculate the rent increase based on the IPC in .com

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## When and how a rent should be updated

Little by little, the cost of products, and of life in general, increases. It also happens with rentals, but of course: How do we know how much a rent has to raise, to adjust to the rest of the prices?

The answer is in the IPC . The rents, once we have formalized a lease and unless otherwise agreed, must change their price according to the evolution of the IPC.

This update must be carried out when one year of the contract is completed, in the corresponding month, it is not necessary to do it at the beginning of the year.

During the first year of the contract and up to the following five years, the contract must be updated according to the CPI variation. Subsequently, other indices may be used or the price may be modified according to the agreement between the lessor and tenants.

## How to calculate the variation according to the CPI

In the first place, we should know the variation that the CPI has experienced in the last year. This information can be consulted on the website of the National Institute of Statistics (INE) without any problem.

Subsequently, as we already know the monthly amount of our rent, we only have to multiply that amount by the variation of the CPI, and we will obtain our updated rental fee.

A small numerical example to understand it better:

If our monthly fee is € 500, and the CPI of the last year has changed by 2%

500x1'02% = 510 €, this will be our new updated quota to the IPC.