Spain’s New Housing Law: Five Key Takeaways For Tenants And Landlords

When Spain’s new housing law took effect

After a lengthy period of negotiations, Spain's eagerly anticipated housing law, known as the 'Ley de Viviendas', finally came into force on Thursday, May 18th 2023. Since then, its measures have gradually been rolled out across the country.

The Spanish government granted definitive approval to the law in May 2023 without further amendments, avoiding a return to Congress and ensuring it took effect ahead of that year’s regional elections.

The law was officially published in the Official State Gazette (BOE) and has now been in force for more than two years. Below are five key areas of the law and how they currently impact both tenants and landlords.

Rental price regulation

How “stressed” rental market areas are defined

One of the law's significant provisions empowers communities and town councils to designate "stressed" rental market areas, enabling them to impose limitations on rental prices.

To qualify as a "stressed" area or 'Zona Tensionada', two criteria must be met: either the area's Consumer Price Index (CPI) exceeds that of its respective province by five points, or families allocate more than 30 percent of their income towards rent.

By 2025, several regions and cities have begun declaring specific neighbourhoods as “zonas tensionadas”, which means the new limits and protections already apply in practice in a growing number of parts of Spain.

Different rules for small and large landlords

In these designated areas, price limitations on leases differ based on whether the property owner possesses more than ten homes (reducible to five at the council's discretion) or fewer than five. Owners of more than five properties must adjust prices within limits established by the Ministry of Transport through an index.

In stressed zones, tenants also benefit from reinforced protections around contract renewals and rent updates, making it harder for large landlords to push through aggressive increases when a lease is extended.

Introduction of a rent control index

Replacing CPI-linked rent rises

The law introduces an official rent reference index that is gradually replacing inflation (CPI) as the basis for limiting annual rent increases. Before the reform, landlords could usually raise prices annually by the same percentage as the CPI during the first five years of the rental contract.

Caps on rent increases in 2022–2025 and beyond

Under the new framework, a two percent ceiling was applied to increases in 2022 and 2023. In 2024 and 2025, a fixed three percent ceiling applies nationwide, regardless of inflation levels, and landlords may not exceed these percentage thresholds for existing contracts.

From 2026, the new rent reference index is expected to fully replace CPI as the benchmark for annual updates, keeping increases below general inflation and giving tenants more predictability over future rent rises.

Agency fees to be paid by landlords

Who pays agency commissions under the new rules

One of the most visible changes for renters is that agency fees are now the responsibility of owners rather than tenants. Before the law, agency fees in Spain often amounted to one month's rent or more and were routinely passed on to the tenant.

In addition, the law prohibits owners from increasing costs beyond what is specified in the contract or advertised, such as passing on "la comunidad" (community fees) or certain municipal expenses directly to tenants.

IBI tax penalties for empty apartments

When a property is considered “permanently unoccupied”

The housing law allows municipalities to impose financial penalties on property owners who keep their properties unoccupied, encouraging them to make them available for rent.

These penalties take the form of surcharges on the Real Estate Tax (IBI), which can reach up to 150 percent. A property is deemed "permanently unoccupied" if it remains empty without justifiable cause for more than two years, provided the owner possesses four or more properties.

How high the IBI surcharges can go

For properties vacant for two years, the IBI surcharge may be up to 50 percent, rising to up to 100 percent if the vacancy period exceeds three years. City councils can increase surcharges further for owners with two or more empty properties within the same municipality.

Learn more about tax penalties for empty properties in Spain.

Tax incentives for landlords

Current deductions and changes in stressed areas

From January 1st 2024, landlords began to benefit from the new tax incentives outlined in the housing law.

Under the current system, landlords can deduct 60 percent of their rental income from their personal income tax payment. In designated stressed areas, this basic deduction is reduced to 50 percent, but additional bonuses may apply depending on how the rent is set.

Higher deductions for affordable and youth-focused rentals

Depending on the rental prices set by landlords, these deductions can increase significantly, almost doubling the effective benefit. In specific cases, tax deductions can reach up to 90 percent if the owner reduces the rental price by a minimum of five percent compared to the previous contract.

Additionally, deductions of up to 70 percent are available if a new home is made available for rent to individuals aged 18 to 35, or if it is rented to the public administration. These incentives aim to encourage affordable housing options and support specific segments of the population.

What Spain’s new housing law means for you

Spain’s new housing law now underpins many day‑to‑day rental decisions, from how prices are set in “stressed” areas to who pays agency fees and how empty properties are taxed. Whether you are a tenant or a landlord, it is important to understand how rent caps, IBI surcharges and tax incentives can affect your contracts, yields and long‑term plans, and to seek professional advice before making major decisions on renting, letting or investing in Spain’s property market.

Need no‑copayment private medical insurance for Spain?

If you’re moving to Spain or renewing your residency, most visas now require private medical insurance with no co‑payments, full cover in Spain and no waiting periods for essential treatment. Choosing a no‑copayment policy means you won’t pay extra each time you visit a doctor, specialist or hospital.

No‑copayment private medical insurance plans accepted for Spanish visa and residency paperwork