Brussels Landlords Can Now Resume Rent Indexation: What This Means for Tenants and Landlords

As of October 14, 2024, landlords in Brussels can once again index rents on their properties. This change marks the end of a temporary measure that was introduced during the energy crisis to protect tenants living in energy-inefficient homes from rent increases. Now that this measure has expired, landlords in the Brussels-Capital Region are allowed to index rents again, but what does this mean for both landlords and tenants?

What Was the Previous Rent Indexation Freeze?

In response to the energy crisis that began in 2022, a temporary rent freeze was put in place for energy-inefficient homes in Brussels. From October 13, 2022, properties with an EPC (Energy Performance Certificate) score of F or G could not have their rents indexed. Homes with an EPC score of E were allowed a 50% indexation, while properties with higher energy efficiency (EPC scores A to D) could be fully indexed. This freeze was designed to prevent tenants in low-energy homes from facing steep rent hikes during a period of rising energy costs.

Why Was the Rent Indexation Freeze Lifted?

The decision to lift the rent freeze came as part of a broader trend, with both Flanders and Wallonia already deciding to end their rent freeze measures. Although some parties, including Open VLD and Défi, argued against prolonging the measure, believing it was a temporary response to the energy crisis, the Brussels government chose not to extend it. The rationale for this decision is based on the stabilization of energy prices and the economic recovery, which means that the exceptional circumstances that justified the rent freeze are no longer applicable.

What Does This Mean for Landlords and Tenants?

For landlords, the end of the rent freeze means they can once again increase rents according to the legal indexation formula, which is based on inflation and changes in the cost of living. This applies to all properties, regardless of their energy efficiency rating. However, landlords are not allowed to make up for missed indexations during the period of the freeze. In other words, they cannot apply a "double indexation" to make up for the rent increases that were postponed.

For tenants, especially those living in energy-inefficient properties (EPC scores F or G), this could mean higher rents as landlords resume indexation. However, tenants can rest assured that the Brussels government has ruled out backdating the indexation, so they will not be hit with an unexpected surge in rent due to missed adjustments during the freeze.

The Role of the Brussels Housing Secretary

Brussels Housing Secretary Nawal Ben Hamou had hoped to extend the rent freeze beyond October 13, 2024. However, she was unable to convince her coalition partners, particularly Open VLD and Défi, to support this extension. These parties argued that the rent freeze was a temporary measure aimed at addressing the exceptional energy crisis, and since the other regions had already lifted their freeze, Brussels should follow suit.

What Happens Next?

The Brussels government has announced that a "corrective ordinance" will be introduced to ensure that landlords do not unlawfully apply double indexation. This new regulation aims to create a fair formula for calculating rent indexation and prevent landlords from making up for lost time. This ordinance will likely provide further clarification on the rules surrounding rent increases in Brussels, ensuring that both landlords and tenants are treated equitably.

Impact on the Brussels Real Estate Market

The return of rent indexation in Brussels may have significant implications for both landlords and tenants. Landlords will be able to adjust rents in line with inflation, helping them keep up with the rising costs of property maintenance, taxes, and other expenses. On the other hand, tenants, particularly those living in older, energy-inefficient homes, may face higher rent bills. This is especially true for those in lower EPC-rated properties, who could see their rent increase as landlords are now free to index their rents fully.

Conclusion: A Return to Rent Indexation with Protection for Tenants

With the end of the temporary rent freeze, landlords in Brussels now have the flexibility to adjust rents in line with the cost of living. However, tenants will be protected from unexpected rent hikes, as backdating of rent increases is prohibited. This move ensures that the rent increases are gradual and based on the standard indexation process. As the Brussels government prepares to introduce a corrective ordinance, further clarity will be provided on how rent increases will be calculated and applied in the future.