Post by bipul52 on Feb 14, 2024 23:11:18 GMT -6
The Competitiveness Guarantee Index is a fundamental tool in the rental market in Spain. This economic indicator has a direct impact on lease contracts, as it regulates how the rental price adjusts over time. In this article, we will tell in detail what the IGC is, how it works and its influence on the rental price, as well as its relationship with the Consumer Price Index (CPI). Index of contents What is the IGC? (Competitiveness Guarantee Index) How does the Competitiveness Guarantee Index work in rentals? IGC How does it affect the rental price? IGC in the rent When can it be extended? How is the Competitiveness Guarantee Index calculated? CPI or IGC, which is better? What is the IGC? (Competitiveness Guarantee Index) The IGC, or Competitiveness Guarantee Index, is an economic indicator that is used to determine the price increase in rental contracts that are renewed. It was introduced in Spain in 1999 and is an essential part of the Urban Leases Law (LAU) .
This index is published and calculated by the National Statistics Institute (INE) every month and a price revision rate is established that is in line with an improvement in competitiveness compared to the Euro zone. How does the Competitiveness Guarantee Index work in rentals? The operation UAE Email List of the IGC is key to understanding its impact on rental contracts. The IGC is calculated by comparing the consumer price revision rate harmonized in Spain with that of the euro zone . When the Spanish economy loses accumulated competitiveness in relation to the euro zone, the IGC allows owners to update the rental income according to this loss . If the Spanish economy gains competitiveness, the IGC establishes a limit for the increase in rent, thus protecting the interests of tenants.
That said, it must be taken into account that if the IGC is equal to or less than 0%, the rental income does not have to be updated. If, on the other hand, the IGC is positive, the rent can be increased as long as it is not above 2% . IGC How does it affect the rental price? The IGC adjusts rental income with a limit of up to 2% . That is, the increase in income cannot rise more than this percentage. However, there are some points that should also be taken into account: If the owner is a large property owner : that is, the owner has more than 10 urban properties, the rent increase is agreed upon and cannot exceed 2%. If the owner is not a large holder : the rent can be higher than 2% as long as it has been agreed between both parties. If there is no agreement, the limit will also be 2%. IGC in the rent When can it be extended? When the lease expires, the owner has the right to review and adjust the rent.
This index is published and calculated by the National Statistics Institute (INE) every month and a price revision rate is established that is in line with an improvement in competitiveness compared to the Euro zone. How does the Competitiveness Guarantee Index work in rentals? The operation UAE Email List of the IGC is key to understanding its impact on rental contracts. The IGC is calculated by comparing the consumer price revision rate harmonized in Spain with that of the euro zone . When the Spanish economy loses accumulated competitiveness in relation to the euro zone, the IGC allows owners to update the rental income according to this loss . If the Spanish economy gains competitiveness, the IGC establishes a limit for the increase in rent, thus protecting the interests of tenants.
That said, it must be taken into account that if the IGC is equal to or less than 0%, the rental income does not have to be updated. If, on the other hand, the IGC is positive, the rent can be increased as long as it is not above 2% . IGC How does it affect the rental price? The IGC adjusts rental income with a limit of up to 2% . That is, the increase in income cannot rise more than this percentage. However, there are some points that should also be taken into account: If the owner is a large property owner : that is, the owner has more than 10 urban properties, the rent increase is agreed upon and cannot exceed 2%. If the owner is not a large holder : the rent can be higher than 2% as long as it has been agreed between both parties. If there is no agreement, the limit will also be 2%. IGC in the rent When can it be extended? When the lease expires, the owner has the right to review and adjust the rent.
Thank you guest!