Here’s what you need to know about the Spanish government’s new decree regarding rental contracts, whether you’re a landlord or a tenant.
The Spanish government recently announced a new decree to cap rent increases at a maximum of 2 percent for properties due for a contract renewal this year.
The new decree also extends the duration of tenancy agreements due to expire before 2027.
It was approved on Friday March 20th as part of a raft of anti-crisis measures designed to alleviate the effects of the war in the Middle East. It came into effect this Sunday March 22nd, after it was published in the Official State Gazette (BOE).
Although the decree is currently in effect, it’s important to be aware that it must still be ratified in Congress, meaning that it could expire later on down the line.
Second Deputy PM Yolanda Díaz insisted that the extension of rental contracts “is already in effect” and will remain so for 30 days.
This means that it won’t be debated in Congress for another month.
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Whether you’re a landlord or a tenant, there are several points you have to be aware of going forward and how it will affect you.
Firstly, if you’re a tenant, it’s important to know that your rental contract won’t automatically be extended. You must ask for it to be extended. The decree states that it will be applied upon request from the tenant, for annual periods up to a maximum of two years.
“You must also request it through a means that you can later prove. Whether it’s an email, a registered letter… However you communicate with the owner, but in a way that you can later have proof of it,” explained Patricia Suárez, president of the Association of Financial Users (Asufin).
Remember to keep hold of this record and any response you receive from you landlord so that you have these documents ready if you’re ever asked for them.
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If you’re a landlord, in most cases you will have to agree to the extension if your tenant requests it, although there a few exceptional circumstances.
For example, if you’re a landlord and you want to move back into the property yourself or rent it out to family members, this would be one of the exceptions. Remember though, you must have included this clause in the initial contract at the time it was signed.
During the extension, all the conditions of the previous contract remain in effect. This means the rental amount will be maintained at the same price for at least one year, which could be extended to a maximum of 2 years.
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There is one main exception, however, if your contract has an annual renewal clause and the rent is to be increased annually.
If you are a private landlord and the rent is due to be updated during the period specified by law – March 2026 to December 2027 – the increase must be agreed upon by you and your tenant. When no agreement can be met, the increase cannot exceed two percent.
If you own 10 or more urban properties, automatically the rent increase can’t exceed two percent.
Anyone can apply for this extension, as long as their contract is due to be run out before December 31st, 2027.
Even if your contract doesn’t end for a while you can still apply for the extension now while the decree is in force and in fact, Asufin suggests that you do. It could expire any time between now and December 31st 2027.
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“I urge everyone to request an extension of their rental agreement because it’s already in effect. I ask those who have rental contracts to request an extension to maintain their current conditions, because otherwise, their contracts could be revalued by up to 50 percent,” Yolanda Díaz said during an interview on National Spanish Radio (RNE).
Contracts extended from today onwards will benefit from the measure. “Even if the decree lapses, they will have succeeded,” an Asufin representative also explained.
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The Confederation of Tenants’ Unions has welcomed this measure, although they believe it is not enough. “This is not a real price freeze, and this measure would not apply to room rentals or temporary contracts,” said Valeria Racu, spokesperson for the Madrid Tenants’ Union.
This is another important point to be aware of if you rent a room in a shared house or you own a property and rent out the rooms individually. As stated above, this measure only covers contracts for whole properties, not rooms.
It also doesn’t cover short term leases, where you’re only renting a property for a few months for example. These contracts may increase in price if you decide to extend your contract. You may also not be able to extend them and the landlord has doesn’t have to oblige. In these cases, it’s important that you read through your contract carefully in order to avoid any unexpected surprises.
