Spain’s government is expected to discuss a new housing decree today that could introduce significant changes to the country’s rental market, including extraordinary extensions to existing tenancies, tighter rules on temporary lets and new tax incentives for landlords.
Spain Expat Press Editorial Team
But there is an important distinction to make from the outset: the document currently circulating is only a draft.
It has not yet been approved by the Council of Ministers, its wording may still change and none of the proposed measures should, at this stage, be treated as new law.
Even if the cabinet approves a Royal Decree-law today, it will subsequently have to be put before Spain’s Congress of Deputies, which must decide within 30 days whether to ratify or repeal it.
For Spain’s landlords and tenants, therefore, today could be an important day – but it will not necessarily be the end of the story.
Up to two additional years – but with important exceptions
One of the most closely watched provisions concerns rental contracts reaching the end of their agreed term.
Under the draft currently being discussed, qualifying tenants who have complied with their contractual obligations could request extraordinary one-year extensions, up to a maximum of two additional years, in certain circumstances.
The measure could apply to qualifying contracts expiring up to the end of 2028.
However, the extension would not apply without exception.
Of particular importance to private landlords, the draft preserves an exception where the owner needs to recover the property as a permanent home for themselves or, under the circumstances established by Spanish tenancy law, for a close family member.
This is a significant detail.
The proposed two-year extension should therefore not be interpreted as meaning that every tenant would automatically be entitled to remain in a property for another two years regardless of the landlord’s circumstances.
Any recovery of a property on grounds of personal or family need would still have to comply with the relevant legal requirements, including the applicable notice and procedural rules.
And, crucially, none of this has yet been finally approved.
Eviction protections could continue until 2028
Another part of the proposal concerns households considered economically vulnerable and without suitable alternative accommodation.
Certain protections allowing the suspension of evictions could be extended until 31 December 2028.
The draft does not, however, treat every landlord in the same way.
According to versions of the proposal made public during the negotiations, smaller private landlords could be exempt from some of the suspension measures.
The protection would not necessarily amount to an indefinite suspension either. Cases would be subject to review and time limits.
The draft also envisages compensation in certain circumstances where small landlords suffer unpaid rent or other costs as a consequence of the measures.
A crackdown on unjustified temporary lets
The proposed rules on temporary rental contracts could prove particularly significant in cities and coastal areas where such agreements have become increasingly common.
Under the draft, landlords wishing to use a temporary contract would need to demonstrate a genuine and verifiable reason for the temporary nature of the tenancy.
Without such justification, the agreement could potentially be treated as an ordinary residential tenancy.
The current proposal envisages temporary contracts generally lasting between 31 days and 12 months.
Repeated temporary contracts could also come under scrutiny where there is no genuine reason for the arrangement to remain temporary.
For owners who legitimately rent properties temporarily, the key issue would therefore be their ability to demonstrate the reason for doing so.
Limits on additional charges
The draft contains a series of other protections affecting the costs that can be passed on to tenants.
These include proposed restrictions on additional guarantees and on certain administration, contract and community charges.
Landlords would also face restrictions on requiring tenants to take out rent-default insurance.
Other provisions deal with repairs where problems affect the habitability of a property.
Tax incentives for landlords
The proposal is not solely about imposing tighter restrictions on property owners.
The government is also considering substantial tax incentives for landlords as part of an attempt to encourage properties to remain in the long-term rental market.
Depending on the circumstances, reductions in income tax on rental earnings could be considerable and, in specific cases envisaged by the proposal, could reach 100%.
The level of relief would depend on factors including the rent charged, the location of the property and the conditions of the tenancy.
Empty homes and holiday lets
The draft also addresses properties left empty for long periods and homes used for tourist accommodation.
Municipalities could be given greater scope to impose higher property tax – Spain’s IBI – on certain empty homes.
The surcharge could vary according to factors including how long the property has remained vacant and the number of homes owned by the same person.
Additional measures affecting tourist accommodation in areas with particularly strained housing markets are also under discussion.
What happens today?
This is the crucial point.
The draft may still change today.
The government intends to take the housing package to the Council of Ministers on Tuesday, 29 September, but negotiations over some of its provisions have continued until the last moment.
Measures could therefore still be amended, removed or added before a final text emerges.
If the cabinet approves the measure as a Real Decreto-ley, it could enter into force following its official publication, depending on the commencement provisions contained in the final text.
But there would then be another crucial stage.
Under Spain’s constitution, Congress must decide within 30 days whether to ratify or repeal a Royal Decree-law.
That distinction matters. Spain has already seen government decrees containing housing measures fail to secure sufficient parliamentary support after being approved by the cabinet.
There are therefore three separate stages to watch:
First: the draft currently being discussed.
Second: the text, if any, approved by the Council of Ministers today.
Third: its subsequent vote in Congress.
Only by keeping those stages separate is it possible to distinguish between what is being proposed and what has actually become law.
For landlords and tenants, nothing should be taken for granted yet
The proposals provide a clear indication of the direction in which Spain’s housing policy may be moving.
If adopted, they could have significant consequences for landlords and tenants alike, particularly in relation to tenancy extensions, temporary lets, vulnerable households and taxation.
But the details matter.
The draft itself contains exceptions – including the important provision concerning landlords who need to recover a property for their own permanent residence or, where the legal requirements are met, for a close family member.
And above all:
The document currently circulating is still a draft. It is not the final law.
The first decisive moment comes today, when we will see which provisions survive the negotiations and what text, if any, is actually approved by the Spanish cabinet.
After that, attention will move to parliament.
Spain Expat Press will follow today’s developments and report on what is actually approved, what has changed from the draft and what the measures mean for landlords and tenants across Spain.
