Spain’s New Decrees: Restrictions on Property Purchases and Rentals

Spain has introduced new restrictions on property purchases and rentals. Two government decrees regulate real estate transactions involving major investors, the extension of rental contracts, and rent increases. Some measures took effect on October 8, while others will come into force on November 15, 2026, according to Spain’s Official State Gazette (BOE).

Spain’s Housing Decrees: What Has Changed

On October 6, 2026, the Spanish government readopted two royal decree-laws regulating the real estate market. The previous measures, approved on September 29, had failed to secure parliamentary support. The revised legislation retains the main elements of the reform while clarifying certain restrictions and conditions for their implementation.

Royal Decree-Law 29/2026 entered into force on October 8. It regulates real estate transactions involving major investors, rental relationships, tenant protection against eviction, and taxation. Royal Decree-Law 28/2026, which introduces new rules for extending long-term rental agreements, will take effect on November 15. Both documents were published in the BOE on October 7.

The decrees must still receive parliamentary approval within 30 days of publication. The Congress of Deputies has been dissolved ahead of snap elections, so the documents will be reviewed by the Permanent Deputation, the body that retains parliamentary powers between legislative terms. If the decrees are not approved, they will cease to have effect.

New Housing Rental Rules in Spain

Extension of Rental Agreements

From November 15, 2026, Spain will change the rules governing the extension of long-term residential leases. After the initial five-year term, rental agreements will automatically be extended for another five years, or seven years if the landlord is a legal entity. Previously, contracts could be extended annually for a maximum of three additional years. To prevent a further extension, landlords must notify tenants at least six months in advance, while tenants must provide two months’ notice.

If a property owner requires a tenant to vacate without legally permitted grounds, the landlord will have to pay compensation equivalent to at least one year’s rent. The law provides exceptions, including situations where the owner needs the property for personal use or to accommodate close relatives. Transitional provisions apply to contracts approaching their expiration dates when the new rules take effect.

https://www.boe.es/eli/es/rdl/2026/10/06/28

Decree-Law 29/2026 introduces another option for extending existing rental agreements. Tenants whose contracts expire by December 31, 2028, may request an additional two-year extension under the existing terms. To qualify, they must have paid rent on time, including during the preceding eight months. In areas experiencing particularly strong housing demand, special provisions allow extensions of up to three years. These mechanisms are subject to statutory conditions and exceptions.

Restrictions on Rent Increases

Rent increases under existing contracts will be restricted until the end of 2027. If the current rent already exceeds the government’s reference price threshold, further increases are prohibited. In other cases, landlords and tenants may agree on a revised amount, but without an agreement, annual rent indexation cannot exceed 2%. The restriction is intended to contain tenants’ housing costs and applies according to the terms of each contract.

New Requirements for Seasonal Rentals

Property owners must demonstrate that tenants’ stays are temporary, based on specific circumstances such as education, employment, or medical treatment. Seasonal rental agreements generally cover periods ranging from 32 days to 12 months. If the owner cannot justify the temporary nature of the tenancy or signs more than two consecutive seasonal contracts with the same tenant, the arrangement may be reclassified as a long-term residential lease.

Separate restrictions apply to renting out individual rooms. The combined rent charged for all rooms cannot exceed the rental price of the entire apartment. Additional government price limits apply in areas experiencing high housing demand. These provisions are designed to prevent landlords from using seasonal agreements or room rentals to circumvent regulations governing permanent residential accommodation.

Protection of Tenants Against Eviction

Special protections for socially vulnerable tenants have been extended until the end of 2030. In certain cases, courts may suspend eviction proceedings if tenants have no alternative accommodation. When tenants are in arrears, public authorities are given time to arrange alternative housing or resolve outstanding rental debts.

The new provisions also clarify the obligations of public authorities and the conditions under which tenants experiencing financial hardship may remain in their homes. The availability of protection depends on the circumstances of each case and the statutory criteria defining social vulnerability.

https://www.boe.es/eli/es/rdl/2026/10/06/29

Restrictions on Property Purchases in Spain

New restrictions on residential property purchases by major investors have been in effect in Spain since October 8, 2026. Decree-Law 29/2026 prohibits certain categories of companies and investment structures from acquiring property at prices below 70% of market value. The restriction will remain in force until December 31, 2030. The government had previously planned to maintain it only until the end of 2028, but the final version extended the period by two years, according to elDiario.es.

The ban applies to organizations specializing in acquiring real estate and distressed mortgage loans at substantial discounts, as well as legal entities classified as large residential property owners. The restrictions also cover companies belonging to the same corporate groups or acting on their behalf. A property’s market value must be confirmed by an independent valuation company accredited by the Bank of Spain. The actual transaction price includes not only cash payments but also liabilities assumed by the buyer.

The legislation provides exceptions for acquisitions serving social purposes. The restrictions do not apply to certain transactions involving the development of affordable housing, accommodation for people requiring social or medical care, and housing for vulnerable groups. Special conditions also apply to certain mortgage foreclosure transactions and organizations complying with an approved code of good practice.

The new rules do not impose a general ban on property purchases by foreign nationals, individual investors, or all investment funds. They target specific transactions involving substantial discounts, particularly bulk acquisitions of residential properties and distressed assets. Purchases at market prices by the affected categories of investors are not prohibited in themselves.

Tax Changes for Property Owners in Spain

Decree-Law 29/2026 changes the taxation of rental property income. In particular, tax incentives are available to landlords who are not classified as large property owners and who reduce rents. If a new rental agreement provides for a rent reduction of more than 5%, the reduction in taxable net rental income may range from 70% to 100%. The exact percentage depends on the property’s location, the tenant’s age, compliance with government rent limits, and other conditions. Where rent is increased, the tax reduction is lower, ranging from 15% to 40%, depending on the size of the increase.

From December 1, 2026, the taxation of short-term rentals will also change. Renting furnished accommodation to the same tenant for up to 30 nights will be subject to VAT at a rate of 10%, except where the property is the owner’s primary residence. Previously, short-term rentals without hotel-style services could be exempt from VAT. A reduced VAT rate will also be available for renovation work on properties intended for permanent residence or long-term rental, subject to specified requirements.

Municipalities will receive additional powers to increase property tax (IBI). In areas under housing market pressure, local authorities will be able to impose a surcharge of up to 50% on properties used for tourist rentals. Separate higher tax rates are предусмотрed for homes that remain vacant for extended periods. In addition, capital gains tax exemptions will be introduced for the sale of certain vacant residential properties to public bodies for inclusion in the affordable housing stock. The incentive will remain available until the end of 2027, depending on the property’s value and other qualifying conditions.

Impact of the Decrees on Spain’s Real Estate Market

The new rules could significantly affect the plans of major investors holding rental properties in Spain. Many investment funds had intended to sell apartments individually once existing tenancy agreements expired. This strategy can generate higher proceeds than selling an entire property portfolio. However, mandatory lease extensions will delay the possibility of obtaining vacant possession and selling these apartments.

According to El País, investment funds could have placed between 35,000 and 40,000 apartments on the market over the coming years, representing approximately one-quarter of their rental housing holdings. The new decrees may disrupt these plans, extending sale timelines and forcing investors to hold properties for longer while accounting for rent increase restrictions.

Representatives of real estate consultancy firms Colliers and Catella have warned of the risk of declining investment in rental housing. Longer holding periods and restrictions on rental income could make such investments less attractive. Investors may also need to revise their financial models as capital recovery periods lengthen and the future regulatory framework remains uncertain.

International Investment analysts note that the new decrees intensify the tension between protecting existing tenants and expanding housing supply. Lease extensions and limits on rent increases provide greater residential stability but also reduce property owners’ flexibility in managing their assets and changing their use. For investors, legal restrictions, capital recovery periods, and opportunities for eventual resale are becoming increasingly important alongside purchase prices and potential rental yields. The new restrictions could discourage investment and reduce the supply of rental housing, worsening the shortage that Spanish authorities are seeking to address.

FAQ: New Property Purchase and Rental Rules in Spain

When did Spain’s new housing decrees come into force?

Decree-Law 29/2026 entered into force on October 8, 2026, except for provisions with later implementation dates. Decree-Law 28/2026, which introduces new rules for extending long-term residential leases, will take effect on November 15.

Do the new rules apply to existing rental agreements?

Yes. Certain provisions apply to agreements already in force. Eligibility for lease extensions depends on the contract’s expiration date, its terms, and compliance with statutory requirements. Transitional exceptions apply in some circumstances.

Can a landlord refuse to extend a rental agreement?

Yes, provided the conditions established by law are met. Under the new rules, landlords must notify tenants in advance if they intend to terminate an agreement. Compensation may be required in certain cases, although exceptions apply, including when the owner needs the property for personal use.

Can foreign nationals purchase property in Spain?

Yes. The new decrees do not establish a general ban on property purchases by foreign nationals. Restrictions apply to specific categories of major investors and certain transactions involving properties acquired at prices substantially below market value.

Can a purchased apartment be rented out to tourists?

Yes, provided the owner complies with tourist accommodation registration requirements and applicable regional and municipal restrictions. The new legislation also introduces additional tax obligations for owners renting properties for short stays.

What happens if Parliament does not approve the decrees?

Royal decree-laws have the force of law from the moment they enter into effect, but they require parliamentary approval within 30 days of publication. If the Permanent Deputation does not approve them, they will cease to have effect. This creates uncertainty for property owners, tenants, and investors planning real estate transactions.