Rent Predictability Examples
Formula and Examples
Where a landlord is setting the rent in a Rent Pressure Zone the amount can not be greater than the amount determined by the below formula:
R x (1 + 0.04 x t/m)
- R = The amount of rent last set under a tenancy for the dwelling (the current rent amount)
- t = The number of months between the date the current rent came in to effect and the date the new rent amount will come in to effect.
- m = the number of months since your last rent review – you must enter 24 OR 12
- For tenancies that are already in existence a review is only permitted 24 months after the tenancy came in to existence or 24 months from the date the rent was last set.
- Once this first rent review has taken place, all reviews thereafter are permitted every 12 months. For subsequent rent reviews in relation to the property the permissible rent increase will be 4% per annum applied pro rata for the period since the rent was last increased.
Example 1: A landlord has not reviewed the rent since 1 November 2014, over 24 months ago. The landlords rented dwelling is located in Dublin 2, an area which has been listed as a Rent Pressure Zone. The landlord plans on serving the rent review notice on 1 January 2017 by serving a minimum of 90 days notice of rent review indicating that the change will take effect from the 1 May 2017. In order to ascertain the new rent amount as permitted under the regulations the landlord inserts all the relevant information in to the formula.
- R = €1200, the current rent amount
- t = 30 months (1/11/14 to 1/05/2017)
- m = 24 months – the landlord has not reviewed the rent for a minimum of 24 months.
- 30/24 = 1.208 then
- x 0.04 = 0.48 then
- + 1 = 1.48 then
- x 1200 = 1260
1200 x (1 + 0.04 x 30/24) = €1260 is the new rent amount permitted
*please note that you should do your calculations working from right to left
Example 2: A landlord set the rent on 1 January 2015; new rent came in to effect on 1 May 2017 following the 24 month minimum rule. The landlord will now be entitled to serve a new rent review notice on 1 January 2018 by serving a minimum 90 days notice of rent review indicating that the change will take effect from the 1 May 2018. In order to ascertain the new rent amount as permitted under the regulations the landlord inserts all the relevant information in to the formula.
- R = €1050, the current rent amount
- t = 12 months (1/05/17 to 1/05/2018)
- m = 12 months
- 12/12 = 1 then
- x 0.04 = 0.04 then
- + 1 = 1.04 then
- x 1050 = 1092
1050 x (1 + 0.04 x 12/12) = €1092 is the new rent amount permitted
*please note that you should do your calculations working from right to left
Example 3: A landlord set the rent on 1 January 2015; he then set the rent on 1 May 2017 following the 24 month minimum rule. The landlord will now be entitled to serve a new rent review notice on 1 January 2018 by serving a minimum 90 day notice of rent review. The landlord does not serve the rent review notice until 1 August 2018 indicating that the change will take effect from the 1 November 2018. In order to ascertain the new rent amount as permitted under the regulations the landlord inserts all the relevant information in to the formula.
- R = €1100, the current rent amount
- t = 18 months (1/05/17 to 1/11/2018)
- m = 12 months
- 18/12 = 1.5 then
- x 0.04 = 0.04 then
- + 1 = 1.04 then
- x 1100 = 1166
1100 x (1 + 0.04 x 18/12) = €1166 is the new rent amount permitted
*please note that you should do your calculations working from right to left
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