Thu. Sep 21st, 2023
    Annual Rent Increase Index to Reach 114.94% in 2021 and 2022

    According to sources in the real estate sector, the annual rent increase index for contracts signed in October 2021 and 2022 will be 114.94%. This means that rents will experience a significant increase in the coming years. The controversial Law on Rent 27,551 establishes that the annual update is based on the Consumer Price Index and salary increases. For several months, this index has remained in three digits, causing concern among both tenants and property owners.

    Tenants argue that this increase is a hard blow to their wallets, while landlords claim that they are losing ground to inflation. In addition, the lack of definition regarding the reform of the rent law has led to a decrease in the supply of rental properties. The Professional Real Estate Forum points out that the lack of definition of the reform has led to a significant reduction in the supply of rental properties. According to this organization, hardly any new contracts are being signed, and those that are have values that are difficult for many tenants to reach.

    In Congress, the reform project of the law is being debated in the Senate. The latest opinion of the ruling party maintains the duration of contracts at three years and establishes a semi-annual update of the amount. It also proposes using the Casa Propia coefficient, developed by the Ministry of Habitat, as the update index. On the other hand, the opposition supports the reform approved in the Chamber of Deputies, which establishes two-year contracts and an update agreed upon by the parties every four months.

    If the ruling party manages to impose its opinion in the chamber, the reform of the Rent Law will have to return to the Chamber of Deputies for final approval.

    – Real estate sector sources
    – Rent Law 27,551
    – Professional Real Estate Forum