New Housing Law in Spain 2026: what changes with Royal Decree-Law 29/2026

In summary, Royal Decree-Law 29/2026, generally in force since October 8, 2026, introduces important changes to housing rentals, contract extensions, and certain tax measures. We explain the most important aspects and who is affected.

Which law regulates rentals?

The Urban Leases Act (LAU) remains the primary regulation for rentals. The new decree introduces changes, but not all of them affect older contracts. Therefore, the first step is to check when the contract was signed and whether it is for a primary residence, a temporary rental, or a room rental.

Which contracts are affected?

The main changes:

1. Temporary rental

This is probably the change with the greatest impact on the international community, because the temporary contract has for years been the standard formula during the early stages of residency and arrival in Spain.

• Nature. The temporary lease intended to meet a temporary residential need is now regulated under housing leases, without being confused with the primary residence. The LAU and its mandatory rules prevail over what is agreed upon by the parties.
• Cause. The need for temporary residence must be real, identified in the contract, and documented (for example, studies or temporary work relocation). Merely labeling it as “temporary” does not automatically dictate its legal regime.
• Duration. As a general rule, it must exceed 31 days and not exceed 12 months, with legally provided exceptions when the persistence of the temporary cause is proven. Not all accommodations lasting 31 days or less automatically become tourist accommodations: the requirements of their specific regulation must be met.
• Concatenation. The succession of more than two consecutive temporary contracts between the same parties for the same dwelling may result in it being considered a primary residence lease from the start, under the terms established by the LAU. This classification can also occur if the temporality is not genuinely justified.

2. Room rental

• The LAU expressly includes the partial leasing of a dwelling by rooms. It can respond to a primary or temporary housing need depending on its actual purpose; it should not be assumed that all room rentals are necessarily for primary residence.
• Rent limit. The sum of the rents for the rented rooms cannot exceed the legal rent limit corresponding to the lease of the entire dwelling, in cases subject to this regulation. The applicable limit for each property and territory must be verified.
• Tourist accommodations subject to specific regulations must be distinguished from transfers intended for certain legally established social or welcoming purposes. Duration alone is not enough to classify a rental as a tourist rental.

• Current contracts. As a general rule, the new regulation applies to contracts entered into from October 8, 2026. Previous temporary contracts retain their regime until expiration under the terms of the applicable transitional provision; their subsequent renewals or extensions require specific analysis.

3. Rent update

The rent can only be updated annually if the contract permits it, and always within legal limits. The IRAV is the index that limits the annual increase. Furthermore, an extraordinary rule applies until December 31, 2027: if the rent already exceeds the maximum reference price, it cannot be raised. In all other cases, the parties may reach a new agreement and, failing that, the increase cannot exceed 2%, respecting all other legal limits. These rules may also affect previous contracts.

Rental advertisements must show important information, such as the previous rent and applicable price limits, where appropriate.

4. Extensions (also for existing contracts)

• Mandatory extension. Retained: the tenant can extend the contract for up to five years, or seven if the landlord is a legal entity.
• Tacit extension. After the minimum legal period, if neither party communicates their intention not to renew within the legal deadlines (four months for the landlord and two for the tenant), the annual extensions provided for in Article 10 of the LAU apply. The tenant may communicate their intention not to continue by providing the corresponding legal notice.
• Due to vulnerability. If the tenant provides a social services report before the contract ends, the extension is for one year and mandatory for the landlord if they are a large-scale landlord, unless a new contract has been agreed upon.
• Due to a stressed market area. If the dwelling is in a stressed area, the tenant may request, before the end of the mandatory or tacit extensions, an extraordinary extension that the landlord must accept. It is annual, up to a maximum of three years, unless agreed otherwise or the landlord or their family members need the dwelling pursuant to Article 9.3.
• Fifth final provision (Decree Novelty): temporary extraordinary extension. For certain existing primary residence contracts, whose legal or contractual period ends before 12/31/2028, the tenant may request annual extensions up to a maximum of two additional years, even outside stressed areas. The tenant must be up to date with payments and have paid the rent monthly during the previous eight months. Exceptions exist, including by agreement, new contract, real and proven need for occupation under legal terms, or renewal/new contract with a rent reduction of at least 5%. The extension under Article 10.3 of the LAU takes precedence and is incompatible with this measure. It should not be interpreted that every contract ending before December 31, 2028, automatically grants a right to two more years.

5. More guarantees for tenants (new contracts)

• Real estate management and contract formalization expenses cannot be passed on to the tenant, nor can taxes associated with the dwelling such as the IBI (Property Tax), unless the tenant is the legally liable taxpayer.
• After six months, the tenant may withdraw without penalty with one month’s notice. In temporary contracts, they can do so after one month, with ten days’ notice.
• Condition of the dwelling. A written record of the property’s condition must be made upon moving out. If not done, it is presumed everything is in order.
• Additional guarantee. Limited to two months’ rent for a primary residence and one month for a temporary residence. Non-payment insurance cannot be required either.
• The landlord has 15 calendar days from when the tenant presents the estimate to accept it or present an alternative. If they fail to do so, the tenant can make the repair and deduct it from the rent. In a temporary contract, the landlord also covers minor repairs due to ordinary wear and tear within five business days.
• Stressed market areas. Setting rent in new contracts is subject to specific legal limitations, which may depend on the previous rent, the reference index system, and the landlord’s status. New expenses cannot simply be passed on to the tenant when regulations prohibit it. It is advisable to review each case and the regional regulations.
• Right of first refusal. The owner must notify the tenant of their decision to sell, including the price and conditions. The tenant has 30 days from the notification to exercise the right of first refusal. If the notification is not made correctly, a right of retraction exists for 30 days from the moment the buyer informs the tenant of the purchase.

6. Owners and investors

Speculative purchases. From October 8, 2026, until December 31, 2030, entities dedicated to real estate speculation and market portfolios may not acquire dwellings for less than 70% of their market value, as determined by an appraisal company approved and registered with the Bank of Spain. This affects dwellings meeting the requirements for an occupancy certificate.

• Dwellings intended for primary residence at an affordable price, for vulnerable persons, victims of gender violence, permanent social and affordable housing, or originating from judicial foreclosures for social housing.
• Prior sales. This does not apply to deeds already executed before a notary, even if not registered.
• If it involves the primary residence of a vulnerable person, eviction orders are suspended until December 31, 2030.

This measure targets specific speculative purchases, not the standard purchase of a home by a private individual.

Suspension of evictions until 2030. A suspension regime is established until December 31, 2030, for vulnerable individuals lacking a housing alternative. If the Administration has not offered an alternative, the suspension can be granted even when a sentence already exists, temporarily preventing the physical eviction as long as legal requirements are met.

• If the plaintiff is neither a large-scale landlord nor a fund, the suspension has a three-year limit and vulnerability is reviewed every 12 months.
• It does not apply if the plaintiff is more vulnerable than the tenant or a natural person with two or fewer properties.
• The Administration compensates the owner for the debt, but the debt does not disappear: a financing regime is offered to those affected.

Extraordinary enervation. In evictions for non-payment involving vulnerable individuals, the Administration has two months to offer alternative accommodation or pay/consign the claimed amounts, accrued amounts, and legal costs. After that period, it becomes subrogated to the debtor’s position, and the eviction order will not proceed as long as the vulnerability persists.

Landlord taxation (Title II).

• IRPF (Personal Income Tax) (Article 6). New reduction of net rental income, with percentages between 15% and 100%, largely applicable to landlords who are not large-scale holders. A 10% deduction is also introduced for leasing a primary residence for taxpayers with a tax base under 33,007.20 euros.
• Imputation of real estate income. From January 1, 2027, a scale of 1.1%, 1.5%, 2%, and 3% on the sum of cadastral values.
• Sale to public entities. Exemption from capital gains for the sale of homes to public entities for social and affordable housing until December 31, 2027, if the value is under 800,000 euros and the home has been unoccupied for the two previous years.
• VAT (Article 7). Reduced rate of 10% for leases of furnished dwellings of up to 30 nights, starting December 1, 2026, unless it is the landlord’s primary residence.
• IBI (Property Tax) (Article 8). Municipalities in stressed areas may apply a surcharge of up to 50% on tourist dwellings, 100% for owners of two or more properties, and 150% for owners of four or more.
• SOCIMI (REITs) (Article 9). Special 25% tax on undistributed profits from residential leasing, with reductions for those allocating their portfolio to affordable rent.
• Municipal capital gains (Article 10). New maximum coefficients. You can check how it works in our guide on municipal capital gains.

7. Savings and financing

Financia Europa Savings and Investment Account. Designed for natural persons; it is individual and non-transferable.

• Limits. A single account of the general modality and a maximum of 150,000 euros of contributions pending recovery.
• Taxation. Gains are not integrated into the tax base until they are withdrawn. For gains on contributions held for more than five years, 100% is excluded up to 10,000 euros, and 20% of the remaining portion.
• Shares linked to the EU and the EEA and eligible funds. SOCIMIs and derivatives are excluded.
• Tax residence. If the holder loses their status as an IRPF taxpayer, the account may continue, but it is no longer subject to the specific regime. This is an important point for those planning to change their tax residence.
• It cannot be marketed until the ministerial order regulating tax reporting obligations comes into force.

Financia Europa Individual Long-Term Savings Insurance. Allows contributions of up to 10,000 euros annually and requires a minimum investment of 30% in variable income (equities).

YOUR HOME (TU CASA). ICO loans at zero interest and with no commissions for the first mortgaged primary residence, for the lesser amount between 20% of the home’s value and 50,000 euros. The dwelling is subject to a maximum transfer price. The provisions do not set an age limit, and a Council of Ministers agreement will specify beneficiaries and conditions.

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Frequently Asked Questions About New Housing Law in Spain