Each year, the rental price of empty or furnished dwellings can be revalued according to the rent reference index or IRL. Definition of the IRL and calculation allowing the annual revision of the rent, to follow in this article.
What is the rent reference index?
The IRL is the reference on which the calculation of annual review of rents, for empty and furnished dwellings put up for rent.
The benchmark index thus a ceiling limit to increases claimed by landlords.
- The benchmark rent index is calculated according to the evolution of consumer prices over the last 12 months.
- It automatically applies to current leases.
The IRL taken into account at the time of the revision is the one whose date is specified in the lease. Otherwise, we will take into account the latest IRL published by INSEE, at the time of signing the lease.
Example: values of the benchmark index of rents in 2014 *
|Quarter||Values of the IRL||variations||Publication|
|4th||125.29||+ 0.37%||January 17, 2015|
|3rd||125.24||+ 0.47%||October 22, 2014|
|2nd||125.15||+ 0.57%||July 25, 2014|
|1||125.00||+ 0.60%||April 11, 2014|
* Source: INSEE
IRL: how to calculate a rent increase?
When revising the rent, the lessor must calculate the increase in its amount from three distinct elements, namely:
1. the amount of the rent prior to the revision,
2. the corresponding quarterly IRL,
3. the benchmark rent index in the same quarter of the previous year.
Calculation of the new rent:
Previous rent x IRL quarterly concerned /
Corresponding IRL of the previous year
= new rent
Period of application of the rent increase:
- in the case where the increase granted has not been applied during the year following its normal effective date, it shall be presumed that the lessor renounced it for the preceding year.
- if the landlord announces that he wants to apply the rent increase during the year following the effective date, it will start from the day of his request and will be based on the latest index published by INSEE..
To noteit is therefore impossible to apply a retroactive rent increase.
Learn a little more about rental deeds.