Royal Decree-Law 29/2026: all the new housing measures

The Standing Committee of the Spanish Congress has validated Royal Decree-Law 29/2026, on urgent measures to protect the social function of housing and increase the supply of affordable housing. It introduces changes to rentals, personal income tax (IRPF), VAT and local taxes, among other areas. Here is a summary of all the changes:

• New temporary housing lease. It replaces the former seasonal lease and can only be used when the tenant is temporarily away from their main home for a genuine, provable reason, which must be stated in the contract. The burden of proof lies with the landlord.
• Duration: more than 31 days and, as a general rule, no more than 12 months.
• If the requirements are not met (no reason stated, more than 12 months without justification, or more than two consecutive contracts with the same tenant for the same property), the lease is treated as a main-home lease from the start, with the minimum term of 5 years (7 if the landlord is a legal entity).
• Rights of temporary tenants: they can leave after one month with 10 days’ notice, the additional guarantee cannot exceed one month’s rent, and the landlord must keep the property in good repair, including minor repairs (if the landlord does not reply within 5 working days, the tenant can carry them out and deduct the cost from the rent).
• Successive temporary contracts for the same property: the rent cannot rise by more than the IRAV (the official index that caps annual rent updates).
• Room rentals: the total rent for the rooms cannot exceed the rent for the whole flat and, in stressed housing market areas, the price caps must be respected.
• Tourist accommodation: stays cannot exceed 31 days.
• Seasonal contracts signed before 8 October: the previous rules continue to apply until they end, with no extension. If they are renewed, the new rules apply.
• In Catalonia, the Catalan rules on seasonal and room rentals also apply.

• Early termination by the tenant: the tenant can leave after 6 months with 30 days’ notice, and compensation for the landlord can no longer be agreed.
• Expenses: property taxes (such as IBI, the local property tax) cannot be passed on to the tenant unless the tenant is the taxpayer, nor can any property management fees or costs of preparing, signing or renewing the contract. In buildings not under a horizontal property regime, community charges cannot be passed on either.
• Guarantees: tenants cannot be required to take out rent default insurance. The additional guarantee on top of the deposit is still capped at 2 months’ rent for contracts of up to 5 years (7 if the landlord is a legal entity).
• Repairs affecting habitability: the tenant can request them in writing with a quote. If the landlord does not reply within 15 calendar days or refuses without good reason, the tenant can carry them out and deduct the cost from the rent.
• End of the contract: both parties must sign a document recording the condition of the property. If it is not signed or no damage is noted, the property is presumed to have been returned in good condition.
• Right of first refusal (tanteo y retracto): it still applies when the property is sold together with other properties, provided it can be individually identified, and it can no longer be waived in the contract.
• Written contract: mandatory if the tenant requests it.
• Large landlord (gran tenedor: generally, more than 10 residential properties or more than 1,500 m² of residential floor space): this status is proven with a Land Registry certificate, and in a building without horizontal division each dwelling counts separately.
• Rental adverts: where applicable, they must state the reference price index (in stressed areas), the applicable rent cap, the property’s identification number and whether the landlord is a large landlord.

• Annual update: if the contract does not provide for it, the rent is not updated. If agreed, the increase cannot exceed the IRAV. This cap also applies to contracts signed before 26 May 2023, which can also benefit from the extensions in article 10 of the LAU (Urban Leases Act).
• Extraordinary cap until 31 December 2027: for updates due between 8 October 2026 and that date, if the rent exceeds the cap under the reference price index, it cannot be increased. In all other cases, the increase is whatever the parties agree and, without a new agreement, a maximum of 2%.
• Extraordinary extension of up to 2 years: in contracts in force on 8 October 2026 where the mandatory extension period ends (if before 31 December 2028), or where the tacit extension or the tacit renewal ends, the tenant can request annual extensions, up to 2 years, on the same terms. The tenant must be up to date with payments and have been so for the previous 8 months.
• The landlord must accept, unless otherwise agreed, a new contract is signed, or the landlord has given notice that they need the property for themselves or their relatives (article 9.3 LAU), even if the contract does not provide for this. It does not apply if the contract is renewed or a new one is signed with rent at least 5% lower. In stressed areas, the extension of up to 3 years already provided for in the LAU takes precedence.
• Extension requests made under Royal Decree-Law 8/2026 remain valid.

• Extraordinary debt settlement (ending the eviction by paying the debt): in evictions for non-payment involving vulnerable tenants, the authorities have 2 months to offer alternative housing or pay the debt. If they do not, they take over the tenant’s debt and the eviction does not go ahead.
• Suspension of evictions until 31 December 2030 for vulnerable people with no alternative housing. If the claimant is a fund that buys properties or unpaid loans below their value, the court must suspend the proceedings. In other cases, the suspension is reviewed every 12 months, lasts a maximum of 3 years and includes compensation paid by the authorities to landlords who are individuals. The tenant’s vulnerability does not prevail if the landlord is an individual who owns two homes or fewer.
• These measures also apply to ongoing proceedings if the eviction has not yet taken place.
• Purchases below 70% of value: until 31 December 2030, these funds and large landlords that are legal entities cannot acquire homes for less than 70% of their market value, with exceptions.
• Mortgage loans assigned to third parties: borrowers keep the same defences and codes of good practice against the new creditor, and mortgage enforcement claims must state whether the property is the debtor’s main home and whether the claimant is a large landlord.

• New state deduction for renting your main home: 10% of the rent you pay if your taxable base is below €33,007.20. The maximum base is €11,630 (up to €1,163 in tax relief) and it decreases gradually from €23,007.20. You must not own or have the use of another home within 50 km. In force since 8 October 2026.
• New reductions for letting out homes on contracts signed from 1 December 2026. If you are not a large landlord, between 15% and 100% of the net rental income, depending on whether the rent goes down or up compared with the previous contract, whether the property is in a stressed area and the tenant’s age (18 to 35), and 80% during the tacit extension if the rent does not exceed the reference index. In addition, 70% if you let the property to the authorities or to non-profit organisations for social housing, and 60% if you renovated it in the 2 years before the contract. Earlier contracts keep the reductions they already had, but they can apply the 80% during the tacit extension if the minimum 5-year term ends after 1 December 2026.
• Deemed income from property (homes that are not your main home and are not let): in 2026 the general 2% rate and the 1.1% rate for municipalities with cadastral values revised with effect from 2012 still apply. From 2027, a progressive scale applies to the total cadastral value: 1.1% up to €100,000, 1.5% from €100,000 to €500,000, 2% from €500,000 to €1,000,000 and 3% above that.
• Renting to relatives up to the third degree: from 2027, the minimum income will be calculated using the average rate under the new scale.
• Selling empty homes to public bodies: until 31 December 2027, the gain on selling a home that has been empty for at least 2 years to a public housing body is 100% exempt if the price does not exceed €200,000, with a decreasing percentage up to €800,000. The non-exempt part can also be exempt, subject to conditions, if reinvested within 6 months in a specific account.
• People over 65 and dependent persons who have moved to a care home or to a relative’s home: when they sell their home, it is still treated as their main home for the purpose of the exemptions.
• Renovation grants under the renovation line of the State Housing Plan 2026-2030: tax-free.
• Financia Europa Savings and Investment Account: a new investment product with contributions of up to €150,000. Gains are not taxed until money is withdrawn and, for the part relating to contributions held for more than 5 years, the first €10,000 of gains and 20% of the rest are exempt. The SIALP Financia Europa insurance product is also created, with contributions of up to €10,000 a year. Both can be taken out once the ministerial orders are approved.

• Rentals of 30 nights or less: from 1 December 2026 they are subject to 10% VAT, even if no hotel services are provided. We explain it in this article.
• Renovation and repair work on homes: from 1 December, the 10% VAT rate only applies if the work is paid by card, bank transfer, nominative cheque or bank deposit, and it is extended to homes let as a main home. More information.
• Protected housing with permanent or indefinite status: from 1 December, delivery by the developer is taxed at 4%.

• IBI from 2027 (if the local council approves it in its tax bylaw): surcharge of up to 50% on tourist accommodation in municipalities in stressed areas, rising to 100% if the owner has 2 or more such properties and 150% if they have 4 or more. The surcharge on homes empty for more than 2 years also changes: in stressed areas it can be applied to any owner (up to 50%, and up to 100% if they own 4 or more residential properties).
• Municipal capital gains tax (plusvalía): new maximum coefficients for calculating the tax from 1 December 2026.

• The special levy on undistributed profits from letting homes rises from 15% to 25%, with a 50% reduction if more than 80% of the homes are let at affordable rents and a 100% reduction if, in addition, the profits are reinvested in affordable housing within 3 years (the required percentage is 60% in 2026 and 70% in 2027). It applies from financial years starting in 2026 that had not ended on 8 October.

• TU CASA scheme: interest-free, fee-free public loans to buy a first main home, of up to 20% of the property’s value with a maximum of €50,000. The home is permanently subject to a maximum sale price. The Council of Ministers has yet to set the conditions.
• Affordable housing: defined as housing whose sale price or rent, including expenses, does not exceed 30% of the median household income in the municipality.
• Short-term rental platforms: new penalty regime, with fines of between €100,000 and €1 million, which can be increased up to 2% of turnover, if they do not send data to the Single Digital Rental Window (Ventanilla Única Digital de Arrendamientos).
• Public housing stock and construction: permanent cap on the sale price of homes owned by CASA 47 (the state housing body), a €400 million Social Impact Housing Fund, ICO guarantees for social housing and industrialised construction, and the possibility of mortgaging industrialised construction components.

If you have any questions about how these changes affect you, contact us and we will advise you.