Spain Approves Sweeping Housing Decree

SPAIN APPROVES SWEEPING HOUSING DECREE: RENT CAPS, EVICTION FREEZE AND TAX BREAKS FOR TENANTS

Spain’s sweeping new housing decre, was published in the Official State Gazette (BOE) today and comes into force tomorrow, 1 October 2026. A few provisions have their own later start dates.

Tenants can ask to extend their primary-residence lease by up to two more years, as long as they are up to date on rent.

Rent increases are capped until 31 December 2027. If the rent is already above the official reference price index, it cannot rise at all. In all other cases, the maximum increase is 2%, unless landlord and tenant agree otherwise.

Seasonal rentals now need a real, documented reason and must last between 31 days and 12 months. Without a valid reason, or after more than two consecutive contracts, the lease becomes a standard residential one.

For room rentals, the combined rent for all rooms cannot exceed the rent for the whole flat.

Landlords can no longer pass agency fees or property taxes on to tenants.

Evictions of vulnerable people with no alternative housing are suspended until 2030 when the owner is an investment fund or similar entity.

If the regional government does not provide alternative housing, it must pay off the tenant’s debt within two months. Until it does, the case stays suspended. The central government will reimburse the regions for the cost.

Until the end of 2028, entities whose business includes buying property cannot acquire homes for less than 70% of their appraised value. There are exceptions, for example for affordable or social rental housing.

Tenants with taxable incomes under about 33,000 euros will be able to deduct 10% of the rent they pay on their primary residence from their income tax.

Tourist flats will pay 10% VAT from 1 December 2026. In high-pressure housing areas, town councils can add a property tax (IBI) surcharge of up to 50%, 100% or 150%, depending on how many tourist flats the owner has.

Landlords who lower or hold down rents will benefit from new tax breaks.

SOCIMIs, Spain’s real estate investment trusts, will face a 25% tax on undistributed profits from residential rentals.

A new programme called TU CASA will offer interest-free loans through ICO, Spain’s state financial agency, to help first-time buyers with their down payment. The loan covers up to 20% of the home’s value, with a cap of 50,000 euros.

Affordable housing is now legally defined as housing that costs no more than 30% of the municipality’s median household income.

State-owned properties, including Social Security housing, will transfer to CASA 47, the state housing agency, with permanent public protection so they cannot be sold off.

The decree also creates the Financia Europa Savings and Investment Account. Savers can contribute up to 150,000 euros and receive tax advantages if the money stays invested for more than five years.

The decree is in force from 1 October, but as a royal decree-law it must be ratified by Congress within 30 days. If Congress rejects it, it will be repealed from that point on.

Please note: The information provided is based upon our understanding of current legislation. It is not legal advice but is provided freely to enable you to be properly informed. We recommend that if you are considering taking action, you should seek professional advice.