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The easy methods to calculate the rent increase in June - La Nación Propiedades
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Los métodos fáciles para calcular el aumento del alquiler en agosto
Los contratos vigentes bajo la ley ya derogada se actualizan una vez al año bajo el índice elaborado y publicado por el Banco Central (ICL); los que se firmaron a partir de enero sin la ley y con ajustes trimestrales por inflación se actualizan de otra forma
www.lanacion.com.ar
June 11, 2024
The contracts in force under the now repealed law are updated once a year under the index prepared and published by the Central Bank (ICL); those that were signed as of January without the law and with quarterly adjustments for inflation are updated in another way
By Mercedes Soriano
The rentals signed between July 2020 and October 16, 2023 are updated once a year according to an index prepared and published daily by the Central Bank and there are two different ways to know the new priceshutterstock - Shutterstock
June starts and there are many tenants and owners who need to calculate the rent increase because they have to adjust. Although President Javier Milei repealed the rental law through the Decree of Necessity and Urgency (DNU) last December and, with it, opened the game to define the way in which the value of contracts is updated ( the index and how often), all those signed prior to the DNU will continue with the agreed terms until their expiration.
That is, the agreements signed under the law passed in July 2020 will maintain annual updates until they end . The regulation of the price indexed to the ICL will last until the end of these contracts, that is, until October 2026, unless they are extended .
These cases adjust the rental price once a year during the 36 months of the contract, that is, twice in total . These increases are regulated by the Index for Rental Contracts (ICL) prepared by the Central Bank, which establishes how much the value of the rental contract should increase in its annual update .
The rents that have been signed under the 2020 law are adjusted once a year according to the Rental Contract Index prepared by the Central BankFabian Marelli
An important fact is that the fact that the current rents are adjusted once a year according to the ICL represents a disadvantageous scenario for the tenant and lessor, since the owners must anticipate annual inflation when setting a value when the contract begins. and tenants have to face high sums in the first months of the new year that are not in line with the current economy.
On the other hand, it is also worth noting that rental contracts signed between October 17 and December 29, 2023 - the date on which the DNU came into effect - are updated semiannually based on the Casa Propia coefficient . These contracts began to be updated from April 2024, when six months had passed since their signing (in the case of those that were agreed upon in October).
How to calculate the rent increase in April according to the ICL
With an automatic calculator
There are several websites that have calculators designed to know the increase in rents . One of them is, for example, that of the City Housing Institute . To consult the index, the steps are as follows:- Enter the website of the City Housing Institute that contains a calculator specifically designed to know the increase in rents: https://vivienda.buenosaires.gob.ar/calculadora_alquiler
- First of all, you must enter the date on which the contract was signed, to know what the index was at that time.
- Then you must select the contract update date.
- Finally, the user must indicate the initial amount of the contract without points to separate the tens of thousands.
These data will help calculate the amount to be paid during the next year and the percentage increase that corresponds to said period. In short, the formula that is applied consists of the total rent divided by the index dated when the contract was signed, multiplied by the index of the day on which the increase is applied to it. The value returned by that account will be the amount of rent that the tenant must pay during the next year , until the new update.
For example, in June 2023 the rent for a two-bedroom apartment in the City of Buenos Aires averaged $158,328, according to Zonaprop. If that tenant had started the contract on June 1, 2023, on June 1, 2024 he would have to start paying the updated increase of $528,391.29.
To arrive at that number, the following data should be entered into the calculator:
- 06/01/2023 on Contract Start Date.
- 06/01/2024 on Contract Update Date.
- 158328 in Initial Contract Amount (write without periods or commas).
This calculation will show that the amount to be paid during the next year (until June 2025) would be $528,391.29 based on the 233.73% increase established by the ICL at the beginning of June.
The rent adjustment can be calculated with an automatic calculator or manually based on information published by the Central BankRodrigo Nespolo
With the BCRA website
Another option is to consult the official website of the Central Bank where the entity updates the index every day. This possibility does not have an automatic calculation, but rather has to be done manually by the person following these steps:- Find the index: go to the Central Bank website ( bcra.gob.ar ), go to the “statistics” tab and then “main variables”. At the end of the list, in the last option, there is the item that allows you to view the “Index of Lease Contracts”. These steps can be shortened if you go directly to the shortcut: https://www.bcra.gob.ar/PublicacionesEstadisticas/Principales_variables.asp and search for “Index for Lease Contracts”.
- Define the index value when the contract began and the current one: the user must select the start dates of the contract and the date on which the amount has to be updated. Then you must press the blue “consult” button that will display a table with the index value in all the months of the consulted period. In that table, the first value is the index when the contract started and the last is the index value currently.
- To know how much the rent will increase, the following calculation must be made: take the current index and divide it by the value of the index from when the contract began. That figure must be multiplied by the rental value and will result in the amount the tenant will have to pay over the next year until it is updated again.
How to calculate the rent increase in June based on inflation
Since the repeal of the rental law, owners and tenants can agree on adjustments and choose which index will be used and how often the amount to be paid per month will be modified. The contracts that were made since January, with the new DNU rules returning to the Civil and Commercial Code, could be scheduled with adjustments under the CPI index (Consumer Price Index) with quarterly or four-month periods.With an automatic calculator
On the Internet there are multiple options for automatic accumulated inflation calculators that take the data published by Indec as a reference. One of them is Checked, which is the one that will be used as a reference in the following procedure:- Go to https://chequeado.com/inflacionacumulada/
- Where it says “To buy something that was going out” enter the rent amount that must be updated.
- Where it says “at the beginning of”, enter the month in which the period from which you want to adjust begins. For example, if at the beginning of June you wanted to make a quarterly update, the period from February to April should be considered.
- Where it says “at the end of”, enter the month in which the period from which you want to adjust ends.
- Where it says “you would need the sum of” the new rental value will appear.
For example, if a quarterly adjustment was agreed upon, for a rent of $422,500 started in March 2024 that must be adjusted in June, the last index published by Indec is from April 2024. In this case, the three-month period of February 2024 to April 2024. Given that the accumulated inflation in that period was 36.71%, the amount to be paid would be $577,597.11 per month.
Manually
In the event that you decide to adjust manually, it is important to highlight that the inflation of each of the months should not be added but rather the inflation variations of each month should be multiplied and multiplied between these and the rental value, given which is the accumulated inflation of the period.First, you have to know what the inflation was for the period for which you intend to adjust the rent. The steps to follow would be the following:
- Access the Indec CPI report, from the Indec page ( indec.gob.ar ), then go to the “Statistics” tab, click on “Prices” within the Economy section and then select the “ Consumer Prices (CPI)”. It can also be accessed directly from this link .
- Click on the “read report” button.
- On the fourth page of the document, see the second graph “Monthly variations in the general level of the CPI”. There you can see the inflation for each month, with which the variation rate in the desired period will be calculated
Once the data is located, the steps to create the account are as follows:
- First you must calculate separately the inflation value of each month divided by 100 and add 1. For example, inflation in February was 13.2% and divided by 100 gives 0.132, plus 1 gives 1.132. So on with each of the months that enter the update period.
- Then you have to multiply the current rental value by those individual inflation values.
- The result will be the new rental value to be paid for the next quarter.
- In other words, the formula would be: the value of the rent x (inflation first month/100 + 1) x (inflation second month/100 + 1) x (inflation third month/100 + 1) = updated value of the rent.
In a specific example , if a rental contract was signed on March 1 for $422,500 with a quarterly adjustment for inflation, this should be adjusted for the first time in June. Given that the Indec report is released in the middle of the month, the data for February, March and April would be available on the first day of June, but not yet for May.
The value of the monthly variation in inflation in those months was 13.2% in February, 11% in March and 8.8% in April.
After dividing each by one hundred and adding one, the account would be: 422,500 x 1.132 x 1.11 x 1.088 = $577,597.11.
The formula would be: the value of the rent x (inflation first month/100 + 1) x (inflation second month/100 + 1) x (inflation third month/100 + 1) = updated value of the rent
In practice, the tenant will be able to know half a month before the adjustment how much the rent will increase. This is because – using this example as a reference – in mid-May you can already know the inflation value for April and that way you could calculate how much you will have to pay in June. However, the figure could change if the rent is paid at the end of the month because the percentage of rent from the previous month, in this example, May, would already be available.
How to calculate the rent increase in June according to Casa Propia
As mentioned previously, contracts signed under Law 27,737 (in force from October 17, 2023 to December 29, 2023, date on which Javier Milei's DNU came into effect) are updated every six months based on the coefficient Own house . These contracts began to be updated from April 2024, when their first six months had passed since their signing (in the case of those that were agreed upon in October) and others will begin to be updated at the beginning of June and onwards.A calculator that exists on the internet and that can be used to find out how much will have to be paid in June is arquiler.com . To do the calculation, you must follow these steps:
- Enter the website arquiler.com which contains a calculator specifically designed to know the increase in rents
- First, you must enter the initial rental amount that was agreed upon when the contract was signed.
- Then the contract start date must be added.
- Then you must select how often it is updated (in the case of contracts signed under this law, they are updated every 6 months)
- Finally, the user must choose the update index (in this case, “Casa Propia”)
With this data, it will be possible to calculate the amount to be paid during the next six months and the percentage increase that corresponds to said period. For example, in December 2023 the rent for a two-bedroom apartment in the City of Buenos Aires averaged $334,888, according to Zonaprop. If that tenant had started the contract on December 1, 2023 under the law, on June 1, 2024 he would have to begin paying the updated Casa Propia increase of $524,088.
Contracts signed between October 17 and December 29, 2023 are adjusted every six months with the Casa Propia indexARquiler
To arrive at that number, the following data should be entered into the calculator:
- 334888 in initial rental value
- 12/01/2023 on the start date of the contract.
- 06/01/2024 on contract update date.
- Select “6″ on how often it is updated
- Select Own House in update index
This calculation will show the amount to be paid during the next six months (until November 2025) would be $524,088 based on the 56.5% increase established by the Casa Propia index.
The calculation will show the amount to be paid during the next 6 monthsARquiler
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