1. What is CPI-Based Rent Review?

CPI-based rent review is a common method for adjusting commercial lease payments in Australia. It ties rent increases to changes in the Consumer Price Index (CPI), which measures inflation. This method provides a fair and transparent way to adjust rents over time.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• \( CPI \) — Consumer Price Index percentage (inflation rate)
• \( Current\ Rent \) — The existing monthly rent amount in AUD

Explanation: The calculation determines the dollar amount increase based on the inflation rate, which is then added to the current rent to determine the new rent amount.

3. Importance of Rent Review

Details: Regular rent reviews ensure that property owners maintain the real value of their rental income against inflation, while providing tenants with predictable and justifiable rent adjustments.

4. Using the Calculator

Tips: Enter the current CPI percentage (available from the Australian Bureau of Statistics) and the current monthly rent amount in AUD. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Where can I find the current CPI rate in Australia?
A: The Australian Bureau of Statistics (ABS) publishes quarterly CPI figures on their website (www.abs.gov.au).

Q2: How often are rent reviews typically conducted?
A: Commercial leases often specify annual rent reviews, but this can vary depending on the lease agreement.

Q3: Are there alternatives to CPI-based rent reviews?
A: Yes, alternatives include fixed percentage increases, market reviews, or a combination of methods as specified in the lease agreement.

Q4: Can CPI decreases lead to rent reductions?
A: Unless specified otherwise in the lease, CPI-based adjustments typically only increase rents (often with a floor of 0%).

Q5: Is GST included in these calculations?
A: The calculator doesn't account for GST. Consult your lease agreement to determine if GST applies to your rent.