03.07.2025 10:20
According to the calculations based on the inflation data for June, the maximum rent increase rate that can be applied to residential and commercial leases for the month of July has been determined. Accordingly, tenants whose contracts are due in July can be subjected to a maximum increase of 43.23%.
The Turkish Statistical Institute (TÜİK) announced the inflation figures for June. Accordingly, inflation in June was 1.37% monthly and 35.05% annually. Based on the inflation data, the maximum rent increase rate that can be applied to residential and commercial leases for July has also been determined.
RENT INCREASE CAP RATE HAS BEEN ANNOUNCED
According to the rate calculated based on the 12-month average inflation; property owners can increase the rent for their tenants whose contract period is due in July by a maximum of 43.23%.
Under normal circumstances, the rent increase rates calculated based on the CPI data were limited to 25% following the implementation introduced by the government. As of July 2024, this limit has been lifted, and tenants renewing their contracts from July onwards will increase their rent based on the CPI. Accordingly, rent increases for residential and commercial properties are made based on the 12-month average.
HOW MUCH INCREASE WAS MADE LAST MONTH?
The change in the CPI (2003=100) was an increase of 1.53% compared to the previous month, an increase of 15.09% compared to the previous December, an increase of 35.41% compared to the same month of the previous year, and an increase of 45.80% based on twelve-month averages. Accordingly, the rent increase in June was 45.80%.
HOW IS THE RENT INCREASE RATE CALCULATED?
According to Article 344 of the Turkish Code of Obligations, rent increase rates are determined based on the 12-month average of the CPI from the previous rental year. This rate constitutes the legal upper limit for both residential and commercial rents. After the removal of the 25% increase limit starting from July 1, 2024, rent increases have become entirely indexed to the CPI. For example, for a residential property with a current rent of 10,000 TL, if the 12-month average of the CPI is 45.80%, the increase amount is calculated as follows:
Calculation: 10,000 TL x 45.80 / 100 = 4,580 TL (increase amount)
New Rent Amount: 10,000 TL + 4,580 TL = 14,580 TL
The same method is applied to commercial rents, but if a different rate is specified in the lease agreement and this rate does not exceed the CPI, the rate in the contract may be valid. Landlords may decide to make an increase below the CPI rate, but an increase above it is legally considered invalid.
WHAT IS THE ROLE OF CPI AND PPI?
The CPI (Consumer Price Index) reflects the price changes of goods and services purchased by citizens, while the PPI (Producer Price Index) shows fluctuations in production costs. With the legal change made in 2019, the CPI began to be used instead of the PPI for rent increase rates. However, some old lease agreements may contain the phrase "TEFE-PPI average." In this case, if the rate in the contract exceeds the CPI, the CPI rate is applied as the legal upper limit. For example, if a lease agreement states "TEFE-PPI average" and this rate is higher than the CPI, the increase is made according to the CPI.