How to calculate rent indexation in Belgium

In Belgium, there are only a few ways for a landlord to increase the rent under an ongoing lease. The most common method is the annual indexation of the rent. However, you must follow certain rules to index the rent correctly.

Is rent indexation mandatory?

As you can read in the introduction, indexing the rent is not mandatory. The choice lies entirely with the landlord, unless the lease contractually stipulates that the rent may not be indexed. The tenant has no legal say in this, since they signed the lease with the indexation clause.

You can also agree on an adjusted arrangement with the tenant by mutual consent. The parties may, for example, agree to defer the indexation or to increase the rent by a lower amount. Here too, the landlord has the final word if no agreement is reached.

When may you index the rent?

As a landlord, you may index the rent once per year. This must always happen on the anniversary of the lease. If your lease started on 1 February 2022, the rent may be indexed on 1 February 2023. It is important to know that this always refers to the effective date, not the signing date. If you sign in November but the lease only takes effect on 1 March, the landlord may not apply an indexation in November.

It is also possible to apply the indexation only after a few years, but this is discouraged for several reasons. If you index only every five years, for example, the rent can increase sharply from one month to the next. This may deter current tenants, who may then terminate their lease.

How do you calculate rent indexation?

Calculating rent indexation is set out in the lease and follows a general formula that applies throughout Belgium:

Base rent x new index (= health index) / starting index

In this formula, the starting index is the [@portabletext/react] Unknown block type "span", specify a component for it in the `components.types` prop for the month before the lease takes effect. The new index is that of the month preceding the anniversary of the effective date. You can have this calculation done easily using Statbel's [@portabletext/react] Unknown block type "span", specify a component for it in the `components.types` prop.

With [@portabletext/react] Unknown block type "span", specify a component for it in the `components.types` prop, this process can run entirely automatically. You simply indicate when you want to index the rent, and based on the information in the lease for the property in question, you see the new rent.

How do you inform the tenant about the indexation?

The application of the index to the rent must be communicated to the tenant in writing and can go back at most three months. This can be by post or by email. A registered letter is not required. We explain this further using two scenarios.

The rent for a property is €600 and the anniversary of the lease is 1 February. The landlord decides to index it, raising the rent to €625. However, they forget to notify the tenant of the rent indexation. On 1 April, it is eventually communicated to the tenant, who has paid the original amount of €600 for the past two months. In this case, the landlord can ask the tenant to pay the "outstanding" €50 (2 x 25).

For this second scenario, we take the same starting point. Here too, the landlord forgot to communicate the rent indexation and only informs the tenant on 1 August that the rent was indexed in February. In this case, they can recover a maximum of €75 (3 x 25) from the tenant. It is therefore important to inform the tenant in good time of the change.

Calculate rent indexation automatically

Would you like to calculate rent indexation automatically so you do not waste time on it? SNDQ can help. By entering all the lease information once, our software can calculate the indexation for you. You can also set the rent to be indexed automatically every year. Communication to the tenant is fully automated as well, so you never miss out on income because of an oversight.

Does that sound interesting? Be sure to explore SNDQ's other features on the website and [@portabletext/react] Unknown block type "span", specify a component for it in the `components.types` prop.