Rent Adjustment Calculator

How to adjust rent?

Brazilian lease contracts get an annual adjustment tied to an index the parties agree on, which can be IGP-M, IPCA or IVAR. The math holds no mystery, you just apply new value = current × (1 + index/100).

You can pull the accumulated indexes from the FGV (IGP-M) and IBGE (IPCA) websites. When inflation runs high, IGP-M tends to climb faster.

This is a simplified calculation.

A practical guide to rent adjustment in Brazil

Rent adjustment is the periodic update of the rental price stipulated in a lease contract, designed to preserve the purchasing power of the landlord against inflation. In Brazil, residential and commercial leases are governed by Lei nº 8.245/1991 (the Tenancy Law, or Lei do Inquilinato), which allows parties to freely agree on rent and indexation rules, with one important restriction in article 17: rent cannot be denominated in foreign currency, tied to exchange rate variation, or linked to the minimum wage. Article 28 of the same law sets the minimum periodicity of contractual adjustments at twelve months, meaning the rent can only be updated once a year.

Article 18 expressly authorizes the parties to mutually agree on a new amount or modify the adjustment clause at any time, while article 19 establishes that, after three years without a consensual update, either party may file a ação revisional (judicial review) to bring the rent back to market levels. These three rules — annual periodicity, contractual freedom, and judicial review every three years — form the backbone of every rent negotiation in Brazil.

Which index should you use: IGP-M, IPCA, INCC or IVAR

The Tenancy Law does not specify which index must be applied, leaving the choice to the contract. The most common options in Brazil are:

• IGP-M (Índice Geral de Preços do Mercado), calculated by Fundação Getulio Vargas (FGV). It is a composite index weighted 60% by IPA-M (wholesale producer prices), 30% by IPC-M (retail consumer prices) and 10% by INCC-M (construction costs). Historically the default for residential leases.
• IPCA (Índice Nacional de Preços ao Consumidor Amplo), measured by IBGE. It is the official inflation index used by the Central Bank for monetary policy and tracks household consumption between 1 and 40 minimum wages.
• INCC (Índice Nacional de Custo da Construção), also from FGV, used mainly during the construction phase of real estate financing contracts rather than leases.
• IVAR (Índice de Variação de Aluguéis Residenciais), released by FGV in 2022. It is built from a sample of real residential leases in São Paulo, Rio de Janeiro, Belo Horizonte and Porto Alegre, so it tends to reflect the actual housing market more closely than IGP-M.

IGP-M is highly sensitive to the US dollar and commodity prices because of its 60% IPA-M weight. That is why it spiked to 23.14% in 2020 and 17.78% in 2021, then dropped to 5.45% in 2022 and turned negative in 2023 (-3.18%). The volatility prompted a market migration to IPCA, which usually moves in a narrower band — around 4.46% in 2025 and projected near 3.95% for 2026 by the Central Bank.

How the calculation works, step by step

The formula is straightforward: new rent = current rent × (1 + accumulated index / 100). The accumulated index is the 12-month cumulative variation of the chosen indicator measured up to the month immediately before the contract anniversary.

Worked example: a tenant pays R$ 2,000.00 in a contract anchored to IGP-M, with anniversary in April 2026. The 12-month accumulated IGP-M up to April 2026 was 0.61%. Applying the formula: 2,000 × (1 + 0.61/100) = 2,000 × 1.0061 = R$ 2,012.20. The increase is just R$ 12.20 per month. Had the same contract renewed in April 2025, with IGP-M accumulated at 8.50%, the new rent would have been R$ 2,170.00 (R$ 170 increase). And in 2021, with 17.78% accumulated, a R$ 2,000 rent would jump to R$ 2,355.60.

When the index is negative, as happened across most of 2023 and parts of 2025, the calculation works the same way: a rent of R$ 2,000 with an IGP-M of -3.18% becomes 2,000 × 0.9682 = R$ 1,936.40. There is no legal obligation for the landlord to apply a negative adjustment unless the contract is explicit; in practice, many landlords simply freeze the rent in deflationary years.

Tenant and landlord rights

The Tenancy Law is clear that the adjustment must follow exactly the index agreed in writing. A landlord cannot unilaterally raise the rent above the contractual index or switch from IGP-M to IPCA without the tenant's consent. If the increase requested is higher than the index allows, the tenant can formally refuse, document the calculation with the FGV or IBGE bulletin, and continue paying the contractual amount. Should the landlord move to eviction, courts routinely block adjustments above the contracted index.

Conversely, the tenant cannot demand a downward revision before three years simply because market prices fell. The judicial review (article 19) requires evidence that the rent has drifted significantly from market levels — typically based on a real estate appraisal report.

Negotiating when the index spikes

Episodes like 2020-2021 showed that strict application of IGP-M can push rents far ahead of wage growth. Article 18 lets the parties renegotiate the adjustment clause at any time. Common strategies tenants have used successfully:

• Request a one-off cap (for example, apply only 50% of IGP-M in that cycle).
• Migrate the index from IGP-M to IPCA prospectively, with a written amendment.
• Split the increase over several months instead of a single jump.
• Offer a longer contract extension in exchange for a moderated adjustment.

Landlords usually prefer a moderate raise plus tenant retention over the cost of vacancy and broker fees of a new lease, which often exceed one month of rent.

Frequently asked questions

Can the rent be adjusted more than once a year? No. Article 28 sets a 12-month minimum periodicity for indexed adjustments. A mutual agreement (article 18) can change the amount at any time, but it is technically a renegotiation, not an indexed adjustment.

Which date does the 12-month index refer to? Usually the accumulated index of the month before the contract anniversary. A lease starting in May 2025 and adjusting in May 2026 typically uses the IGP-M or IPCA accumulated through April 2026.

What if the contract is silent on the index? The adjustment can still occur every 12 months, but the parties must agree on the percentage. Without consent, the landlord may have to go to the judicial review route after three years.

Are commercial leases treated differently? The same law applies, but commercial contracts often use IGP-M and may include sales-based clauses. The 12-month minimum periodicity still holds.

Is this calculator legally binding? No. It is a simplified estimator. The final amount must follow the exact wording of the contract and the official bulletin from FGV (IGP-M, IVAR, INCC) or IBGE (IPCA).