Lorraine Williamson
Spain has confirmed a major package of housing measures following a narrow parliamentary vote on Thursday, 12 November. The legislation introduces stronger protections for certain tenants, restrictions on rent increases, financial support for first-time buyers and new tax rules for short-term accommodation, although a separate proposal to extend rental contracts indefinitely has failed.
The decision comes amid growing pressure over Spain’s housing crisis, with rising rents and property prices making it increasingly difficult for many households to find affordable accommodation. The government argues that intervention is necessary to protect residents and increase the supply of homes, while opponents question whether tighter regulations could discourage property owners from entering the rental market.
The official resolution published in the BOE on Friday, 13 November, confirms that Congress has ratified Royal Decree-law 29/2026, originally introduced in October. The measure passed by 35 votes to 34 in the Diputación Permanente, the parliamentary body responsible for certain decisions while Congress is dissolved ahead of the general election on 29 November.
A second decree, which would have introduced much more extensive automatic rental renewals, was rejected. This distinction matters because the approved legislation still contains important protections for existing tenants, but does not make all residential rental agreements indefinite.
What changes for tenants renting in Spain?
One of the most significant measures allows qualifying tenants to request an extraordinary extension of their existing residential rental agreements. Contracts meeting the legal conditions, including those whose compulsory extension period ends before 31 December 2028, may be extended annually for up to two additional years.
Tenants must be up to date with their rent and have maintained payments during the previous eight months. The extension is not automatic in every case, and exceptions apply where the parties agree alternative arrangements or the landlord can demonstrate a legally recognised need to occupy the property.
The decree also places temporary restrictions on annual rent increases until 31 December 2027. Where the existing rent exceeds the applicable maximum under Spain’s official reference-price system, no annual increase is permitted under the measure.
For other qualifying agreements, the parties may negotiate an adjustment, but where no new agreement is reached, the increase cannot exceed 2%. The precise application depends on the rental contract and the relevant legal conditions.
Stronger protections against eviction
The approved legislation also extends safeguards for households facing eviction because of financial or social vulnerability. Certain eviction proceedings can be suspended until 31 December 2030 where the legal requirements are met, particularly when vulnerable occupants have no suitable alternative accommodation.
However, this does not amount to a general ban on evictions or remove tenants’ responsibility to pay rent. The protections depend on factors including the household’s circumstances, the landlord’s status and the type of legal proceedings involved.
The decree also introduces mechanisms intended to involve public authorities in resolving certain cases of rental arrears and preventing homelessness. These provisions are designed to give vulnerable households additional protection while maintaining procedures for landlords to pursue their legal rights.
New rules for temporary rentals and individual rooms
The legislation also addresses the growing use of temporary rental agreements and room-by-room lettings. These arrangements have become increasingly prominent in cities and tourist destinations where demand for permanent accommodation is high.
Under the revised rules, landlords must be able to demonstrate a genuine reason for classifying accommodation as temporary. The changes are intended to prevent ordinary residential tenancies from being presented as short-term arrangements to avoid protections that would otherwise apply.
Additional requirements also affect the letting of individual rooms, including restrictions on the combined rent charged in circumstances covered by the legislation. Existing temporary agreements retain transitional protections, so owners and tenants should check when their contracts were signed before assuming the new provisions apply immediately.
First-time buyers could receive up to €50,000
The housing package introduces a new financing mechanism called Tu Casa, intended to help people buying their first permanent home. Managed through Spain’s Instituto de Crédito Oficial (ICO), the programme provides for interest-free loans covering up to 20% of a property’s value, subject to a maximum of €50,000.
The scheme is designed to assist buyers who can obtain a mortgage but struggle to save the deposit required by lenders. Unlike a grant, the money must be repaid, and the legislation sets out specific financing conditions.
The full text of Royal Decree-law 29/2026 also makes clear that properties purchased using this financing must remain permanent residences and will be subject to lasting restrictions on resale prices. The government must establish further eligibility criteria and application arrangements, meaning prospective buyers should not assume the loans are immediately available.
The measure could be particularly relevant to younger households and other first-time purchasers facing high property prices. However, its long-term impact will depend on how the programme operates and whether enough suitable homes are available to buy.
Holiday rentals face a new 10% VAT rule
Owners of short-term holiday accommodation are another group facing significant changes. From 1 December 2026, the legislation introduces a 10% VAT treatment for qualifying furnished accommodation rented for stays of no more than 30 nights, where the property is not the landlord’s habitual residence.
The measure broadens the circumstances in which short-term accommodation is subject to VAT, while retaining the existing treatment of accommodation providing hotel-style services. It is particularly relevant in tourism-dependent areas, including the Costa del Sol, the Balearic Islands and the Canary Islands.
Property owners should examine whether their accommodation falls within the new definition rather than assume every rental arrangement will be treated identically. Regional tourism regulations, municipal requirements and national registration obligations continue to apply alongside the tax changes.
What does the decree mean for landlords?
For landlords offering long-term accommodation, the changes introduce additional obligations but also potential financial incentives. Certain tax provisions are intended to encourage smaller property owners to maintain affordable rents and keep accommodation available to permanent residents.
The legislation also introduces restrictions targeting specified corporate and investment-related property acquisitions at substantially discounted prices. Until the end of 2030, covered entities face limits on acquiring qualifying properties for less than 70% of their independently assessed market value, subject to exemptions.
These restrictions are aimed primarily at defined categories of investment entities and large corporate landlords, rather than ordinary individuals purchasing homes. The government hopes the measures will discourage speculative acquisitions that could reduce the availability of affordable residential property.
Critics argue that greater intervention could discourage investment and reduce the number of properties available to rent. Supporters maintain that stronger regulation is necessary in a market where housing costs have increasingly outpaced what many residents can afford.
Why the rejected rental decree matters
Although the main housing package survived, the rejection of Royal Decree-law 28/2026 is an important political setback for the government. That separate proposal sought to introduce much stronger automatic renewal rights for residential tenants, substantially limiting the circumstances in which landlords could bring qualifying agreements to an end.
The proposal also included compensation requirements where landlords terminated certain contracts. Opponents argued that these provisions would create excessive uncertainty for property owners and could further restrict the supply of rental accommodation.
The rejected decree was due to take effect on 15 November, but its parliamentary defeat means those additional provisions will not proceed. Tenants should therefore distinguish between the limited extraordinary extensions retained in the approved housing decree and the much broader renewal rights that failed to secure parliamentary support.
Spain’s housing crisis remains unresolved
The approved decree provides a framework for stronger rental protections, first-time buyer assistance and tighter regulation of parts of the property market. Some provisions have been in force since October, while others, including the new short-term accommodation VAT rules, have later implementation dates.
Whether these measures will ease Spain’s housing crisis remains uncertain. Protecting existing tenants may provide greater stability, but improving affordability over the longer term will also require more homes in places where people need to live and work.
The general election on 29 November adds another layer of uncertainty, with housing policy likely to remain a central political issue. For residents, landlords and prospective buyers, the immediate priority is understanding which of the approved changes apply to their circumstances and when those changes take effect.