From changes to room and seasonal rentals, to deductions for repair costs and new rules for the IBI property tax, here are the major changes Spain’s leftist government wants to add to housing legislation, and their impact on tenants and landlords.
Spain’s housing crisis continues to be at the centre of public and political debate.
Many people in Spain are unable to access affordable rent, or even get on the property ladder due to skyrocketing prices and housing deficits in major cities across the country.
As a result, over the last few years, the Socialist-led government has continued to create new policies and laws to try and improve the situation, from rent caps and aid packets to restrictions on tourist accommodation and incentives for landlords to put empty homes back on the market. For the most part, they’ve proven largely unsuccessful.
Now Pedro Sánchez’s government is preparing a new royal decree, which will seek to pass several more housing measures in September.
It will essentially be a major reform of the Urban Leases Law (LAU) and will also modify some of the main rules governing the rental market.
The law is currently in draft form and could undergo changes, but already there have been heated debates as to what the new legislation could mean for both tenants and landlords.
It’s worth noting that the bill is not guaranteed to get parliamentary support when politicians return after the summer break, and that the Socialists decided to postpone its presentation to September 2026 precisely because they forecast not getting enough votes from Spanish MPs due to the “complexity” of the housing reform.
Here are the main housing reforms proposed:
1) Room rentals will now be seen as traditional rentals
One of the most important changes of the new decree is that renting a room will generally be considered a normal residential lease, which means that it will be subject to the same rules as other apartment or property rentals. It also states that the total rent for all rooms in the same apartment cannot exceed the total rent for the entire apartment and that if the property is located in a high-demand area, it must also comply with the rent limits in that area.
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2) If tenants repair damages, they can deduct costs from the rent
Currently in Spain, it often falls to the tenant to organise and pay for repairs even when it shouldn’t necessarily. Often when there are certain property issues landlords may not respond, may even ignore necessary repairs or take a long time to fix them. The new rules, however, aim to change this. The changes state that if the damage affects the habitability of the property or the safety or health of the tenant, the landlord will have a total of 15 days to respond. If they don’t respond in time or refuse to do the repair, the tenant will be able to get someone to carry out the work and deduct the costs from future rent.
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3) Temporary rentals will be limited
This rule is similar to ones already exist, but it has been strengthened. If a landlord wants to rent out their property on a temporary basis, they will have to justify the reason why. They will also have to prove why the tenant needs a temporary home, such as a short term work contract or course. If a temporary contract can’t be justified, it will automatically convert to a traditional rental.
Temporary contracts may not exceed 12 months and there can’t be two consecutive contracts for the same people in the same property.
4) Tenants have the right of first refusal when the property is being sold
If a landlord wants to sell the property, the new rules state that the tenant has the right of first refusal to buy it. This can no longer be waived in the contract. When a home is sold together with other properties or is part of a larger transaction, the price for the single property must be identified so the tenant can also have the right to refuse if they don’t want to buy it.
5) Mandatory extensions for many contracts
The decree also aims to bring in another legislation on extensions for rental contracts that expire before June 30th, 2028, extending the protection of tenants.
6) If a property report is not signed, it will be considered to be in good condition
The draft law now states that both the landlord and tenant must provide a written documentation on the condition of the property when the keys are handed over. If that document is not signed or does not list any damages, the law will presume, unless proven otherwise, that the property was handed over in good condition. This essentially could stop landlords adding extra repairs at the end of a rental contract.
7) Evictions could be suspended until alternative housing becomes available
One of new measures that is generating the most criticism is the proposed amendment to the Civil Procedure Law. The new legislation states that when a tenant stops paying rent because they’re in vulnerable situation and can’t afford it, they can’t be evicted until they have alternative housing. As a result, judges will suspend legal proceedings until an alternative exists.
It also states when the landlord is an individual, who does not own many properties, the authorities will cover the corresponding compensation during this time.
8) IBI property tax can no longer be charged to the tenant
In the past landlords could pass the IBI property tax bill onto the tenants if it was worked into the contract. The new draft law says this is no longer allowed and landlords must pay this themselves.
9) Short term tourist rentals will be subject to VAT
There will be important changes to tourist rentals too. Up until now, tourist rentals have generally been exempt from VAT. This exemption will now be eliminated for rentals of up to 30 nights in municipalities with more than 10,000 inhabitants.
READ ALSO: Spain may slap 21 percent VAT on tourist lets as part of new housing crisis plan
They will now be taxed at the standard VAT rate of 21 percent. This means it will be charged the same as hotels.
10) Landlords cannot require tenants to have non-payment insurance
The draft also prevents landlords from requiring tenants to take out rent default insurance or similar.
11) Properties in ‘stressed residential areas’ could be subject to sale limitations
If a property is located in what’s known as a ‘stressed residential area’, there will now be certain limits or conditions when it comes to selling the property in order to guarantee that the property will continue to be used for residential purposes.
