IGP-M (Inflation Index) vs IPCA (Inflation Index): Understanding Rent Adjustment Indices

What is the IGP-M (Inflation Index)?

The IGP-M (Inflation Index) (General Price Index - Market), calculated monthly by the FGV (Getulio Vargas Foundation), is composed of three sub-indices:

IPA-M (60%): Measures the variation in wholesale prices, reflecting the costs of raw materials, fuels, and industrial inputs.
IPC-M (30%): Measures the variation in consumer prices for families with incomes between 1 and 33 minimum wages.
INCC-M (10%): Measures the variation in construction costs.

Since it has a significant weight in wholesale prices, the IGP-M (Inflation Index) can be much more volatile than the inflation felt by the final consumer. In times of high dollar or commodity prices, the IGP-M (Inflation Index) can skyrocket far above the actual inflation of families.

What is the IPCA (Inflation Index)?

The IPCA (Inflation Index) (National Consumer Price Index - Broad), calculated by the IBGE (Brazilian Institute of Geography and Statistics), is the official inflation index of Brazil. It measures the variation in prices of a basket of products and services consumed by families with incomes of 1 to 40 minimum wages in the main metropolitan regions.

Since it directly reflects the cost of living for families, the IPCA (Inflation Index) is considered a fairer index for rent adjustments from the tenant's point of view.

What is the INPC?

The INPC (National Consumer Price Index), also calculated by the IBGE, measures the variation in prices for lower-income families (1 to 5 minimum wages). It is the index used as the basis for adjusting the minimum wage.

Tenant Rights - Tenant Law (Law 8.245/91)

The adjustment can only occur after 12 months of the contract or the last adjustment.
The adjustment index must be explicitly stated in the contract.
There is no law requiring the use of a specific index: IGP-M (Inflation Index), IPCA (Inflation Index), INPC, or any other can be freely agreed upon.
The STJ (Superior Court of Justice) has already recognized that in situations of exceptionally high IGP-M (Inflation Index), the tenant can request a judicial review of the adjustment.
In indefinite-term contracts, the landlord can request a market adjustment after 3 years.

Frequently Asked Questions

Yes, as long as the index is specified in the contract. The Tenant Law does not determine which index to use, only that the adjustment must respect the minimum period of 12 months and the contractually established index. If the contract mentions IGP-M (Inflation Index), the adjustment will be based on the IGP-M (Inflation Index). If it mentions IPCA (Inflation Index), it will be based on the IPCA (Inflation Index). In contracts that do not specify an index, the INPC is used as a market reference.

First, verify the index agreed upon in the contract and calculate the correct adjustment. If the landlord is charging a different amount or using the wrong index, notify them in writing (email or registered letter). If there is no agreement, you can seek mediation at the Special Civil Court (JEC) for contracts up to 40 minimum wages, without needing a lawyer. The Consumer Protection Agency (Procon) can also assist in cases of abusive charges.

Yes. The law allows for free negotiation between the parties. Especially when the IGP-M (Inflation Index) is much higher than the actual inflation (IPCA (Inflation Index)), many landlords are willing to negotiate a smaller adjustment to avoid losing a good tenant. Present the IPCA (Inflation Index) numbers and your payment capacity as an argument. Remember that an empty property also has costs for the landlord (property tax, condominium fees, maintenance).

The adjustment according to the contractually established index is a right of the landlord, not an obligation. They can choose not to apply the adjustment. However, the landlord CANNOT increase the rent beyond the index specified in the contract during the contract's validity. Increases above the contractual index are only allowed in contractual renewals or through judicial review after 3 years of contract.

The IGP-M (Inflation Index) is disclosed by the FGV at portalibre.fgv.br (IGP Portal). The IPCA (Inflation Index) and INPC are disclosed by the IBGE at ibge.gov.br. Both publish the accumulated indices over 12 months, which is the amount to be used in the "Accumulated Index Percentage" field of this calculator.

Rent Adjustment Calculator

Rent Evolution by Year

Comparative: IGP-M (inflation index) vs IPCA (inflation index) vs Fixed Rate 6% p.a.

Detailed Annual Projection