Lorraine Williamson
Spain has introduced sweeping changes to its housing legislation, with new protections for tenants and tighter restrictions on large property owners taking effect on Thursday 8 October. The measures also address holiday rentals, tax relief, and the growing difficulty of finding affordable accommodation.
The legislation follows weeks of political confrontation over housing policy and comes after an earlier decree was rejected by Congress. For millions of people renting, letting or buying property in Spain, the changes could have important financial and legal consequences.
The new legislation, approved by the Council of Ministers on 6 October and published in the Official State Gazette (BOE) the following day, is intended to tackle rising housing costs and protect people at risk of losing their homes.
However, the package is not a single piece of legislation. Two separate decrees were approved, with different implementation dates, and both must still be ratified by the Permanent Deputation of Congress following the dissolution of parliament ahead of the general election.
What changes for people renting in Spain?
One of the most significant changes concerns the protection of tenants facing eviction because of financial difficulties. Under the new rules, courts can suspend proceedings involving vulnerable households without alternative accommodation, although the conditions depend on the type of landlord and the circumstances of the case.
Where the property is owned by certain companies involved in speculative property acquisitions, qualifying eviction proceedings can be suspended until 31 December 2030. Other landlords are subject to different arrangements, including periodic reviews and provisions intended to protect owners who are themselves financially vulnerable.
The legislation also introduces greater responsibility for regional governments when tenants face eviction over unpaid rent. Where a household qualifies for protection and suitable alternative accommodation is unavailable, the relevant administration may be required to cover the outstanding debt and associated costs to prevent the eviction.
The government says these measures are intended to prevent vulnerable families from becoming homeless while ensuring that landlords are not left without financial protection.
Landlords cannot make tenants pay for rent guarantee insurance
The new legislation also changes the rules surrounding insurance against unpaid rent, a common requirement imposed by some landlords in Spain. Property owners will no longer be permitted to require tenants to take out rent guarantee insurance or equivalent cover as a condition of their tenancy.
Landlords can still arrange their own insurance against rental arrears, but the decree prevents them from transferring the obligation to obtain that cover to tenants. Additional financial guarantees remain permitted within statutory limits, generally up to two months’ rent for qualifying residential contracts and one month for temporary rentals.
The decree also introduces a separate protection for landlords where vulnerable tenants face eviction. In qualifying cases, public authorities must assume responsibility for outstanding rent and legal costs, with provisions making the administration legally responsible for the debt if payment is not made within two months.
New restrictions on large property owners
The decree also extends restrictions on property acquisitions by large landlords and investment companies until the end of 2030.
Under the legislation, certain property investors and owners classified as grandes tenedores, or large property holders, face restrictions on buying homes at less than 70% of their independently assessed market value. The rules are designed to discourage speculative purchases at heavily discounted prices.
A large property holder is generally defined as someone owning more than ten residential properties or more than 1,500 square metres of residential property. In officially designated high-pressure housing markets, regional authorities can apply a lower threshold of five or more homes.
There are exceptions, including qualifying purchases intended to provide affordable housing, social accommodation or residential care. The legislation does not impose a blanket prohibition on property purchases by every landlord or investor.
Holiday lets and room rentals face tighter regulation
Spain’s government is also targeting the use of residential property for short-term accommodation, particularly where temporary rental arrangements are used to avoid protections associated with permanent tenancies.
Under the new framework, temporary rental agreements must have a genuine, justifiable reason and generally run for between 31 days and 12 months. Where the temporary nature of the tenancy cannot be demonstrated, the agreement may be treated as a normal residential tenancy.
The legislation also limits the combined rent charged for individual rooms so that it cannot exceed the permitted rental price for the entire property. Regional laws remain relevant, particularly in communities such as Catalonia, which already have their own regulations.
Holiday accommodation is also affected by tax changes. A 10% VAT charge on qualifying tourist accommodation is scheduled to apply from 1 December 2026, while municipalities in designated high-pressure housing areas will be able to impose additional property tax charges on certain tourist accommodation.
These municipal surcharges can rise according to the number of properties owned, potentially reaching 150% in the circumstances specified by the legislation.
Tax relief for tenants and landlords
The new decree introduces tax measures designed to make long-term renting more affordable and encourage landlords to reduce prices.
Qualifying tenants earning less than €33,007.20 annually may benefit from a 10% income tax deduction on payments for their main residence. For those earning up to €23,007.20, the maximum deduction can reach €1,163 annually, with the available allowance reducing as income rises.
Landlords who are not classified as large property holders may also qualify for tax reductions when they lower the rent by more than 5% compared with the previous contract. The level of relief depends on the circumstances and the applicable qualifying conditions.
These measures are intended to reward lower rents rather than relying exclusively on restrictions and enforcement.
Will rental contracts be extended automatically?
A separate decree introduces provisions for extending qualifying residential rental contracts due to expire before the end of 2028. Under the proposed arrangements, tenants would be able to request extensions in annual periods, up to a maximum of two years, subject to conditions including their rent payment history.
These extensions are not automatic. Tenants would need to apply and meet the eligibility requirements, including having kept up with payments during the preceding eight months.
Crucially, this separate decree is not scheduled to take effect until 15 November 2026 and remains subject to parliamentary approval. Tenants should therefore avoid assuming that a contract expiring now is automatically covered by the proposed extension.
Housing reforms face crucial parliamentary test
The housing reforms arrive at a particularly sensitive time for Spain, with housing affordability becoming one of the country’s most pressing political and social issues. Rising rents, limited supply and growing competition between residential and tourist accommodation have placed considerable pressure on households in major cities and popular coastal areas.
Although the principal decree has entered into force, it still requires parliamentary ratification within the statutory period. The separate rental-extension legislation faces its own approval process, leaving an element of uncertainty over how the full package will develop.
For tenants and property owners, the immediate priority is understanding which measures already apply, which depend on individual circumstances and which are still awaiting implementation. The coming weeks will determine whether the government’s latest attempt to reshape Spain’s housing market survives parliamentary scrutiny.