Calculating Rent Adjustments in France
Introduction
Rent adjustments in France are a regular occurrence to account for inflation and maintain the purchasing power of landlords. Understanding how these adjustments are calculated is essential for both tenants and landlords.
Indexation
Rent adjustments are based on the Indice de Référence des Loyers (IRL), an index published quarterly by the Institut National de la Statistique et des Études Économiques (INSEE). The IRL measures changes in the cost of living and is used to calculate the maximum allowable rent increase.
Calculation Formula
The rent adjustment formula is as follows:
New Rent = Old Rent x (IRL of the current quarter / IRL of the quarter when the rent was last adjusted)
Adjustment Periods
Rent adjustments can only be made every 12 months. The anniversary date for the adjustment is the date on which the tenant entered into the lease.
Example
Let’s say a tenant entered into a lease on January 1, 2023, with a rent of €1,000. The IRL on January 1, 2023, was 135.15.
On January 1, 2024, the IRL is 137.05. Using the calculation formula, the new rent would be:
New Rent = €1,000 x (137.05 / 135.15) = €1,014.18
Exceptional Circumstances
In exceptional circumstances, such as a sharp rise in inflation, the government may impose a cap on rent adjustments. This cap can be applied for a limited period.
Dispute Resolution
If a tenant believes that their rent adjustment is incorrect, they can file a dispute with the Commission Départementale de Conciliation (CDC). The CDC is a body that mediates disputes between tenants and landlords.
Additional Information
– Notice Period: Landlords must provide tenants with at least one month’s written notice before making a rent adjustment.
– Maximum Increase: The maximum allowable rent increase is capped at the rate of inflation plus 1.5%.
– Exclusions: Rent adjustments are not applicable to social housing or furnished rentals.
– CGT (Contribution Foncière): Landlords are responsible for paying the property tax (CGT). The CGT is not included in the rent.
Comment sont calculées les révisions de loyer ?
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