Increase in Rent for June 2025 as Perigned Contractual Rates
June Rental Increases in Argentina Variable, Dependent on Contract Terms
Effective June 1, rental contracts that have agreed to adjustments will see a new increase in their values. However, it is essential to clarify that there are currently three types of contracts coexisting:
- Those signed under the rental law, with annual adjustments based on the Lease Contract Index (ICL)
- Those signed after the update of the regulations, with semi-annual adjustments based on Casa Propia
- Those agreed upon after the repeal of the law, with contractual freedom between the parties
Consequently, the increase will depend on the index of each agreement.
The update causing the most controversy is that of the annual agreements adjusted by ICL. These were signed in June 2023 and will face their last increase in the sixth month of the year, as they were made for three years with annual increases under the then-applicable rental law. In June 2026, they must be renewed, at which point tenants and landlords can set new conditions or terminate the agreement.
The ICL is published by the Central Bank and has been characterized by having constant increases above inflation since it came into effect. In July 2024, it reached 265% above inflation. However, since September of that year, a change in trend has been evident, leading to a slowdown in the increase of the adjustment.
In June 2025, contracts signed in the same month in 2023 will suffer a second and final interannual increase (since they will end in 2026) of 80.65%. If a tenant pays $400,000 for rent, starting next month and for the following 12, they will have to pay $722,581 per month. Tenants paying $600,000 will have to pay $1,083,871 per month. It is worth noting that the ICL varies daily, so the increase will depend on the day of the month the contract was signed to apply the corresponding adjustment.
It is essential to note that rental agreements signed under the update of the law—those agreed upon from October 17 to December 29, 2023—will also be adjusted in June. These are adjusted semi-annually and based on the Casa Propia coefficient, which is around 48.44% in June (this value is approximate as the corresponding one has not yet been published).
The exact rental increase for June will be determined by the applicable index's published value for the prior period, and it is likely to remain close to the inflation rate, given current trends and past practices. With the CPI annualized inflation reported at 47.3% in April 2025, contracts referencing CPI may see increases around that percentage, unless otherwise specified by contract or regulatory change.
Contracts signed after the repeal of the rental law have contractual freedom between the parties, and adjustments may vary greatly depending on negotiation. Nevertheless, most agreements include quarterly and quarterly updates based on inflation measured by the Consumer Price Index (IPC).
In summary, rental increases in June 2025 will depend on the specific index referenced in each contract. Contracts indexed to CPI may see increases around the current annual inflation rate, while contracts using ICL or Casa Propia will depend on the specific value published for that index but are also likely to align closely with general inflationary trends. Flexible, dollar-denominated contracts may operate under different dynamics, typically tied to the US dollar rather than local indices.
- In the business sector, companies at the forefront of real-estate investing might need to scrutinize rental increase percentages, given that June 2025 adjustments will vary depending on the specific index mentioned in each rental contract.
- Taking into account the financial implications for both landlords and tenants, it is crucial to understand that the increase in June 2025 rental values for contracts indexed to ICL, Casa Propia, or CPI will generally follow inflationary trends, while those based on contractual freedom may show different dynamics.
