It is usual to include a clause in a lease whereby the rent is increased each year.
When the rented property is the tenant's principal residence, the law requires the use of the Index of Reference of Rents (IRL), published by INSEE. This index is applied for the most frequent rental contracts:
The rent increase takes place every year, on the agreed date, or on the anniversary date of the lease.
The annual rent increase cannot exceed the variation of the Index of Reference of Rents over one year.
The index to be taken into account is :
When the rented property is not the tenant's main residence, it is possible to freely choose the index used to index the rent. It can be the IRL but also the Construction Cost Index (ICC), also published by the INSEE.
It is necessary to mention in the lease which index is used to calculate the indexation.