Gov’t Lowers Rent Increase Cap for 2025: What Tenants and Landlords Need to Know

Starting January 1, 2025, the government has set a lower cap on rent increases for residential units, offering greater protection for tenants while balancing landlord rights. This adjustment comes under National Human Settlements Board (NHSB) Resolution No. 2024-001, issued in response to rising living costs. Here’s what you need to know:

New Rent Increase Limits for 2025

For tenants renting residential units at ₱10,000 or less per month, the maximum allowable rent increase is now 2.3%. This is a significant drop from the 4% cap implemented in previous years. The adjustment aims to ensure that lower-income tenants can afford stable housing without being burdened by excessive rent hikes.

Who is Covered by the Rent Cap?

The 2.3% rent increase limit applies to:

• Current tenants renting before 2025 who continue their lease in the same unit.
• Residential units including apartments, houses, boarding houses, dormitories, rooms, and bed spaces.

However, there are exceptions:

• If a tenant vacates a unit in 2025, the landlord can set a new rent without restrictions for a new tenant.
• Newly built rental units in 2025 are not subject to this cap.
• Residential units with a rent above ₱10,000 per month are not covered by the limit.

What About 2026?

The rent increase limit will be lowered further to just 1% in 2026 for tenants who continue their lease in a unit where they were already staying in 2025.

No Limit for Higher Rent Properties

For rental units priced above ₱10,000 per month, no government cap exists. Landlords have the discretion to adjust rent based on market conditions, but they must provide tenants with proper notice as per lease agreements.

How Can Tenants Handle Disputes?

If a landlord imposes an illegal rent increase, tenants are encouraged to first resolve the matter through the Barangay Justice System for mediation. If no agreement is reached, the case may be escalated to the courts.

What Are the Penalties for Violations?

Landlords found guilty of violating the rent control policy may face:

• A fine of ₱25,000 to ₱50,000, or
• Imprisonment of one month and one day up to six months, or both, depending on the court’s decision.

Why This Matters

The government’s decision to lower the rent increase cap aims to protect tenants from the rising cost of living while still allowing landlords to earn fairly. For tenants, this means better housing stability, while landlords are encouraged to work within legal limits to maintain a fair rental market.

With these new rules set to take effect in 2025, both tenants and landlords must stay informed and aware of their rights and responsibilities.

For more updates on housing policies, stay tuned to Baguio City Guide!