Annual rent indexation in Belgium

Rent indexation is an essential procedure by which the rent is adjusted for fluctuations in the cost of living. This mechanism ensures that rent remains in line with inflation. It is crucial that tenants be informed of this adjustment in a timely manner so that they can account for the changed rent. Historically, different restrictions applied to rent indexation by region and type of lease. The calculation of the new rent is done using a specific indexation formula.

How annual indexation works

When may a rent be indexed?

Rent indexation cannot be arbitrarily implemented by the landlord. To prevent abuse, this process is regulated by law. The rent is indexed annually on the anniversary of the signing of the lease. This specific date is stated in the indexation clause of the contract signed by both tenant and landlord. The tenant must agree to and be notified of this indexation date when signing the contract.

It is strongly recommended that the notice of rent indexation be sent to the tenant via certified mail with return receipt requested. This not only ensures that the tenant is aware of the adjustment, but also serves as proof that you have taken the necessary steps in the event of any disputes. As of 2014, owners have only one year from the date specified in the lease to file a rent review request with the tenant.

What property types are eligible for indexing?

• Housing: Landlords of both furnished and unfurnished properties are allowed to review rents annually. However, it is important to note that rent indexation now depends on the energy performance of the property, as defined by the Energy Performance Certificate (EPC).
• Garages and commercial properties: For garages and commercial properties, landlords also have the right to increase the rent annually, provided this is explicitly stipulated in the rental agreement. For the indexation of rent for garages in Belgium, as with housing, the health index is used.

Rent indexation and EPC: The impact of energy performance

Recently, the Flemish, Walloon and Brussels Regions have announced changes to the rules around rent indexation, linked to the EPC score of a property. For detailed information on these specific rules per region, please refer to specialized articles on the subject.

Calculating rent indexation in 2025

To calculate the rent indexation in Flanders, the rent excluding charges and the health index are taken into account.

• Start index: In Flanders, this is the health index of the month prior to the start of the lease. In Wallonia and Brussels, it is the index of the month prior to the signing date of the lease.
• New Index: This is the index for the month prior to the anniversary of the lease.

You can access the most recent index table online.

Rent indexation formula:

(Current rent x new index) / starting index = new rent

Sample rental agreement in Flanders:

• The current rent is €500.
• The lease started in January 2022. The starting index (December 2021) was 115.60.
• The new index (December 2022) is 127.89.

Calculation:

(€ 500 x 127,89) / 115,60 = € 553

Thus, the new monthly rent for the existing tenant is €553, excluding charges. Remember to apply the specific restrictions linked to the EPC of your property. When the base index is negative, the indexation results in a reduction of the rent in favor of the tenant. You can include in the lease that only rent increases are allowed.

The health index: a crucial indicator

The health index is an economic indicator used in Belgium to index rents, as well as wages and social benefits. This index is calculated by removing certain product groups from the consumer price index, including alcoholic beverages, tobacco and fuels. Its purpose is to prevent a decline in living standards due to inflation.

Automating rent indexation: efficiency for property managers

For owners with a large property portfolio, manually tracking rent indexations can be a time-consuming task. Nevertheless, it is critical that rents are adjusted to the cost of living to ensure the profitability of rental properties. Given the annual application of rent indexation, it is easy to forget the anniversaries of various leases.

Digital tools for rent indexation

Property management software such as Offimac offers features to automate rent indexation. The benefits are:

• The owner receives reminders, ensuring that the rent indexation date is not forgotten.
• The new rent is automatically calculated based on the reference index.
• A pre-completed notice may be sent to the tenant informing them of the rent recalculation by email, mail or registered mail.
• Landlords can fully automate these processes and index the rents of their property portfolio as soon as needed.

Streamlined property management

Offimac is an ideal platform for owners who want to accurately track their rent indexation and simplify their property management. It automates many repetitive tasks, resulting in significant time savings and financial benefits. This leads to accurately revised rents, prevents errors and improves communication with tenants. Offimac is designed for owners of both single and multiple rental properties who want to streamline their management without losing control of their investment. The platform provides various functions for collecting rent, managing properties and centralizing information.

Communicating about rent indexation with your tenant

Open communication between tenant and owner is essential for a good relationship and prevents problems such as rent arrears or property deterioration. It is therefore important to inform your tenant of the rent indexation, either through a communication by e-mail, or in a more formal way by letter or registered mail.

Conditions for indexing

Remind your tenant of the rent indexation terms as set forth in the lease. This helps the tenant better understand and accept the requested monthly increase. You are required to notify the tenant of the rent review, and a transparent approach is usually appreciated.

Content of the indexing letter

To have legal validity and be clear to the tenant, the indexation letter must contain the following crucial elements:

• Date of shipment
• Contact details of tenant and owner
• Subject of the letter, for example: ‘rent indexation 2023’
• Reminder of the rent indexation clause in the lease
• Method used to calculate new rent
• Amount of new rent
• Effective date of rent review

The indexation letter should clarify the situation, serve as a summary and make the rent review official.

Retroactive rent indexing?

Owners who forget the anniversary of a lease often consider a retroactive rent review. It is crucial that the rent review take effect on the date of the owner’s request. Therefore, it is advisable to take this step via registered letter with receipt, with the postmark serving as proof. The Offimac platform allows you to automate this process and sends the requests by registered mail.

Indexation of an unregistered lease

In Belgium, registration of a lease is mandatory for tax reasons. If a lease is not registered, the tenant can leave the property at any time without having to pay early termination fees.

In Wallonia, and recently in Brussels, owners who have not registered their lease with the civil registry can no longer revise their rents. Before this regulation, indexations could be applied by all owners regardless of registration. Indexations applied before this date remain valid.

Exceptions to registration requirement for indexing:

There are two specific exceptions where owners can index their rent without registering the lease:

• The lease involves a mobile home, such as a caravan, camper or barge.
• Indexation leads to a reduction in rent. In this case, the owner may reduce the amount.

Apart from these specific cases, the owner must always fulfill his obligations in order to exercise his rights. Thus, rent indexation requires the registration of the lease.

• Important note for Brussels: If the property is located in Brussels with an EPC E label, our indexer will only calculate the indexation as of 14/10/2023 and will not take into account the possibility of retroactive indexation.

Characteristics of effective software for this purpose

• User-friendly
• Future-proof and business-secure
• Affordable software
• Ready-to-use solution
• Very modern
• Tailored rental
• Ready-made
• Each department
• Customizable
• Can be expanded
• Many extra apps available

Source reference:

[1] Federal Public Service Economy (FPS Economy). Official Basic and Health Indexes: The Calculation of Rent Indexation. [2] Flemish, Walloon or Brussels Government regulations. Specific Rent Creates and Temporary Indexation Restrictions (if applicable). [3] Royal Federation of Belgian Notaries (notaris.be). The Validity and Application of the Indexation Clause in Leases. [4] Academic Legal Journal (Belgium). Analysis of Case Law on the Retroactive Claim of Rent Indexation. [5] Financieel Dagblad (Belgium). Economic Analysis: The Influence of Inflation and the Health Index on Rents. [6] Flemish Agency for Innovation & Entrepreneurship (VLAIO). Information on Leases and the Legal Provisions for Business Owners. [7] Tenant and Landlord Associations (e.g., VJHP or SVK). Practical Guide: Frequently Asked Questions about the Annual Indexation Procedure. [8] Real Estate Sector Report. The Impact of the Energy Performance Certificate (EPC) on Indexation Opportunities (Regional Variations). [9] Deloitte or PwC (Belgium). Tax and Accounting Consequences of Rent Indexation for Landlords. [10] Common Rental Law (Federal Legislation). General Rules Concerning Rent Adjustment and Indexation. [11] Software Industry Insight. Automation of Indexation: The Role of Software in Correctly Calculating and Communicating.

Discover more about our rental software:

• Rental software solutions
• Business Central
• Dynamics
• Planning software
• Business Intelligence
• Document management
• Digital portals
• All Microsoft modules and apps for rental