Spain introduces sweeping new rental rules after Maricarmen eviction

Two new Royal Decree-Laws bring changes to rent increases, contract renewals, temporary rentals, room rentals and evictions, although Congress must still approve them
 

Spain has introduced a major package of changes to its housing and rental laws following the high-profile eviction of 87-year-old Maricarmen from the Madrid home where she had lived for more than 70 years.

The two Royal Decree-Laws were approved by the government on Tuesday September 29 and have now been published in the Boletín Oficial del Estado (BOE). The first, Real Decreto-ley 26/2026, came into force on October 1, while the second, Real Decreto-ley 27/2026, was published on October 1 and also takes effect immediately.

However, the measures are currently being applied on a provisional basis and must be approved by Congress. A special sitting has been called for Friday October 2, when the two decrees will be voted on separately.

The new rules cover several parts of the property market, from ordinary long-term rentals to temporary lets, room rentals, tourist accommodation, rent increases and protection against eviction.

The case that brought Spain's rental rules back into the spotlight

The changes came just days after the eviction of Maricarmen, an 87-year-old woman who had lived in the same Madrid property for around seven decades.

Her father originally signed the rental contract in 1956. The tenancy was subsequently transferred first to her mother and then to Maricarmen, who continued living in the property under the old 'renta antigua' system.

A long-running legal dispute began after the property was acquired by Urbagestión in 2018. The company argued that the second transfer of the old rental contract to Maricarmen was not legally valid. Although a lower court initially ruled in her favour, the decision was later overturned and the Supreme Court did not admit her appeal.

After several postponed eviction attempts, Maricarmen was finally removed from the property on September 23. The images of the elderly woman being taken from her home on a stretcher prompted public and political reaction.

The case became a catalyst for changes to the rental system, although the new laws go considerably beyond the circumstances of her particular tenancy.

There was also a last-minute development in Maricarmen's own case. Her representatives and Urbagestión reached an agreement allowing her to return to the property under a new rental contract, which she accepted on September 29.

Rent increases will be limited until the end of 2027

One of the changes most likely to affect existing tenants is a temporary limit on annual rent increases. For rent reviews taking place between October 1, 2026 and December 31, 2027, the rules depend on the property's rent and the agreement between the landlord and tenant.

Where the rent is already above the maximum price established under the applicable state reference system, no increase can be applied. In other cases, the landlord and tenant can agree on an increase, but if they do not reach a new agreement, the increase cannot exceed 2%. This is a limit on the annual updating of an existing rent. It does not mean that every property in Spain has suddenly acquired a government-set maximum monthly rent.

Some existing contracts can be extended for up to two more years

A separate temporary measure gives certain tenants the right to request an extension of their existing rental contract for up to two additional years. It applies to residential rental contracts that were already in force when the new decree came into effect and whose mandatory or tacit extension period ends before December 31, 2028.

The tenant must request the extension and must be up to date with the rent, including having paid each month during the previous eight months. The extension is granted in annual periods, for a maximum of two years, and the existing terms and conditions of the contract continue to apply.

There are exceptions, including cases where the parties agree different terms, sign a new contract or the landlord genuinely needs the property as a permanent home for themselves or certain close family members.

This two-year measure is important for contracts approaching the end of their existing legal protection. However, it should not be confused with the separate system introduced by the second decree, which changes what happens after the normal five- or seven-year period.

Rental contracts will automatically continue after five or seven years

The second decree makes a much bigger change to the way ordinary residential rental contracts continue once their initial legal period has ended.

Under the new system, once a residential rental contract has completed at least five years, or seven years where the landlord is a company, it will continue through successive periods of the same length unless one of the parties gives notice that they do not want to continue. The landlord must give at least six months' notice. The tenant must give at least two months' notice. This means that reaching the end of the five- or seven-year period will no longer, by itself, bring the tenancy to an end.

Instead, continuation becomes the default position.

The new system also applies to certain existing contracts, although transitional rules mean that contracts already in a period of extension under the old system will generally continue under those rules until that period ends.

Landlords who end a contract without a recognised reason could face compensation

The new rules also introduce financial penalties in some cases where a landlord decides not to continue a tenancy. If a landlord ends the contract without one of the specific reasons allowed under the new law, they could have to pay the tenant compensation of at least 12 months' rent based on the cost of a comparable property.

The amount is calculated using Spain's state rental reference system where applicable. It cannot be lower than one month's rent for each year the tenant has lived in the property. However, this does not apply in every situation.

For example, a landlord can still recover a property if they genuinely need it as their own home or for certain close family members. Other exceptions apply if the tenant has not actually been living in the property for more than six months of the previous year without a valid reason, or already has another suitable home in the same municipality.

In other words, the new rules do not prevent landlords from recovering their properties. They set out specific circumstances in which this can happen and, in some cases, put a financial cost on ending the tenancy. 

Temporary rentals face much stricter rules

The new rules also change how temporary rental contracts can be used. A temporary rental must now have a genuine reason for being temporary, such as someone moving to another city for a fixed period of work or study. The reason must be stated and supported by evidence where necessary.

These contracts generally have to last more than 31 days but no longer than 12 months.

The rules are designed to stop landlords using temporary contracts for people who are effectively living in a property as their permanent home. If a contract runs for more than 12 months without a genuine reason, or the same landlord and tenant sign more than two consecutive temporary contracts for the same property, it can be treated as a normal residential rental instead.

So, just calling a contract a 'temporary rental' will no longer be enough. There must be a genuine temporary reason behind the tenancy.

Room rentals will also be brought under greater control

The new rules also deal with the rapidly growing room-rental market. A room-rental arrangement that does not have a genuine, stated and demonstrable temporary reason can be treated as a residential tenancy.

There is also a new limit on the total amount charged for individual rooms. The combined rent for all the rooms in a property cannot exceed what could be charged for the property as a whole under the applicable rules. The measure is intended to prevent a property being divided into several rooms and rented out individually at a combined price considerably higher than the rent for the entire home.

Regional housing rules can still apply, meaning the precise position can vary between autonomous communities.

Tenants cannot be charged estate agency fees

The decree also strengthens an existing protection concerning rental agency costs. Estate agency and contract-formalisation costs cannot be passed on to the tenant, either directly or indirectly, regardless of what they are called. The definition covers costs connected with preparing, formalising, managing, changing or renewing the rental contract.

The new legislation also strengthens tenants' rights concerning the condition of a property, repairs affecting habitability and the condition in which a property is returned at the end of a tenancy.

Evictions of vulnerable tenants face new restrictions

The first decree also introduces new measures concerning evictions where the tenant is considered economically and socially vulnerable and has no alternative accommodation. Some eviction proceedings involving large property-owning entities can be suspended until December 31, 2030, provided the legal conditions are met. This is not a blanket ban on evictions.

The protection depends on factors including the tenant's vulnerability, whether they have another suitable home and whether the public authorities have provided an alternative.

The rules also distinguish between different types of landlords and contain separate provisions concerning compensation and the involvement of public authorities.

Investors face restrictions on buying properties cheaply

The first decree also introduces a temporary restriction on certain property purchases by companies whose business includes acquiring property. Until December 31, 2028, such entities are generally prevented from buying residential property for less than 70% of its market valuation, subject to some exceptions. These include certain affordable housing projects, social housing, care facilities and properties connected with protecting vulnerable groups.

The measure hopes to prevent properties being bought at heavily discounted prices and subsequently used to generate higher returns through resale, rent increases or conversion to non-residential uses.

Tourist rentals will face new tax rules

The new measures also affect tourist accommodation, although the changes will not apply to every holiday rental in Spain.

From December 1, 2026, certain furnished tourist accommodation will have to charge 10% VAT where it meets the conditions set out in the new rules. This includes accommodation offered for stays of up to 30 nights where services similar to those provided by hotels are also provided.

The change means some tourist rentals that were previously exempt from VAT will now have to charge it. It does not mean that every holiday rental will automatically be subject to 10% VAT.

The reforms also give local authorities more powers to increase IBI (property tax) on properties used for tourist accommodation and on certain long-term vacant properties. In areas officially classed as residentially stressed, councils can introduce an additional IBI charge on tourist accommodation. The surcharge can be higher for owners with several tourist properties.

The exact impact will therefore depend on the type of accommodation, how it is operated and, in some cases, decisions made by the local council.

A new rental tax deduction will help some tenants

People who rent a home to live in could also benefit from a new income-tax deduction under the package. Anyone renting their main home who has a taxable income of less than €33,007.20 a year will be able to deduct 10% of qualifying rent payments from their income tax bill, although the maximum deduction will vary depending on income.

The measure is aimed at helping people on lower and middle incomes with the cost of renting a home. The deduction will apply according to the relevant tax year and the date on which the new rules take effect.

What the changes mean for landlords and tenants

For tenants, the main changes are greater protection against large annual increases, longer potential contract periods, stricter rules around temporary and room rentals, protection from rental agency fees and additional safeguards in cases of vulnerability.

For landlords, the changes mean more restrictions around rent increases and contract termination, greater scrutiny of temporary rentals and room lets, and new financial and administrative considerations when deciding whether to recover or re-let a property.

At the same time, the legislation includes tax incentives intended to encourage landlords to offer properties at affordable rents, as well as measures designed to increase the supply of public and affordable housing.

The crucial next step is the vote in Congress

Despite the amount of attention the new rules have received, they are not yet guaranteed to remain in force. Both measures were introduced as Royal Decree-Laws, allowing the government to bring them into force because it considered the situation sufficiently urgent. Under the Constitution, however, a Royal Decree-Law must be submitted to Congress for validation within 30 days.

Congress has scheduled an extraordinary sitting for Friday October 2, with the two housing decrees being voted on separately. They could therefore be approved or rejected independently of one another.
If they are passed, the new rules will remain in force. Congress can also decide to process a decree as a bill, allowing amendments to be considered later.

If either decree fails to receive the required support, that particular measure will cease to apply, making the October 2 vote particularly important for anyone with a rental property or tenancy affected by the changes.

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