What you need to know about rent indexation
The following rules apply to all leases, including the lease of a principal residence.
Indexation is an adaptation of the rent to the cost of living. It is subject to a number of specific rules (Article 1728 bis of the Belgian Civil Code), which can be summarised as follows
- indexation may not take place more than once a year and only after the first year;
- indexation cannot be carried out before the anniversary of the entry into force of the lease (date on which the property is available) (this date does not always coincide with the date of signature of the contract);
- indexation is calculated on the basis of fluctuations in the consumer price index ("health" index for contracts concluded after 1 February 1994);
- the indexation is calculated according to the following formula: the base rent multiplied by the new index / the base index, where :
The basic rent is the amount provided for under the terms of the contract. The amount recorded includes only the rent without any charges or expenses.
The new index (from 31 May 1997) is the index for the month prior to the anniversary of the effective date of the lease.
The reference index is generally the index of the month before the date of signing the contract.
For contracts signed after 1 February 1994, the main index is the CPI. You can easily obtain it by calling the Belgian Ministry of Economy (SPF Economy) at 02.206.56.41.
The website of the Ministry of the Economy also offers a tool to calculate the indexation of rents for main residence leases.
For example, an agreement signed on 23.05.2016 and entered into force on 01.06.2016 for a rent of €1,000.00 is not subject to indexation until 06.01.2017. The calculation of the indexation is as follows:
New rent (from June 2017) = (base rent of May 2016 x CPI of May 2017) / CPI of April 2016.
In figures, the calculation is as follows: New rent (from June 2017) = €1000.00 * 105.42 / 103.53 = €1018.26.
The law prohibits fluctuations in rent beyond the above amount. In the event of litigation, the amount will automatically be reduced to the statutory amount according to the above formula.
The following rules apply to principal residence leases (Article 6 of the Belgian Principal Residence Lease Act):
- Presumption of application of the indexation rule. This means that even if it is not stated in the tenancy agreement, it applies. Thus, if you and your tenant agree not to index the rent, this must be expressly provided for in the lease for such an exception to have legal force.
- Even if there is a presumption in favour of an indexation rule, this does not mean that it will automatically be applied.
In order to exercise the right to require indexation, the owner must be proactive and request it in writing. As a precautionary measure, it is advisable to send the request by registered mail in order to be able to establish a definite sending date if necessary.
- Indexation has the opposite effect for a maximum of three months. If the landlord forgets to send the request for indexation on the first anniversary of the contract, he will only be able to receive the indexation arrears for the three months prior to his written request.
The indexation arrears expire after one year.
Compliance with Section 6 of the Principal Residence Tenancies Act in relation to rent indexation is imperative. If the lease contains provisions that deviate from this system, the tenant is not obliged to comply with these provisions.
In addition to the above information, we advise you to get your own information about the topic.
Anna Susarova
Lawyer