The new Housing Law has officially come into force in Spain, including the Canary Islands, introducing sweeping changes aimed at improving rental stability for long-term lets, curbing excessive rent increases, and promoting a fairer property market amid an ongoing housing crisis.
One of the most significant reforms is the automatic extension of tenancy agreements. All rental contracts signed since March 2019 will be extended by default for up to five years if the landlord is a private individual, or up to seven years if the property is owned by a company, even if the landlord does not wish to renew.
This provides greater residential stability for thousands of tenants across the country. During this mandatory renewal period, landlords may only reclaim the property for personal or family use if that condition was explicitly written into the original contract.
The law also extends the automatic renewal period from one to three years if neither party notifies the other of their intent to end the lease. New notice periods have also been introduced: landlords must now give four months’ notice, while tenants must provide at least two months if they do not intend to continue the tenancy after the initial term.
In a move widely welcomed by renters, annual rent increases will now be capped in line with inflation (CPI). This aims to prevent steep rent hikes during the contract period, particularly in light of high inflation and housing shortages.
To improve public oversight and data accuracy, landlords will be required to submit minimum information when lodging security deposits. In addition, a national rental price index will be introduced within eight months, giving both tenants and authorities better insight into local market trends. Regional governments will also be able to create their own indices.
The new legislation includes multiple protections and advantages for renters:
Property owners are also affected by the new rules:
In addition, homeowners’ associations can now, with a three-fifths majority vote, limit or regulate tourist lets within the building, and charge them up to 20% more in shared community expenses.
New protections have been introduced for vulnerable groups. If a tenant dies, elderly, disabled, or minor family members will have the right to remain in the property. Evictions involving vulnerable households must now be reported to social services and may be temporarily suspended.
Local councils will be allowed to offer up to 95% reductions on council tax (IBI) for rent-controlled protected housing. Landlords of social housing will no longer be permitted to pass this tax on to tenants.
To address the housing shortage, the Government will also launch initiatives to boost affordable rental stock. This includes unlocking public land, streamlining administrative processes, offering tax incentives, and enabling municipalities to invest surplus funds in public housing developments.
