Spain enacts rent decree capping price hikes as property listings drop up to 12.5%

New tenant rights and price limits

Real Decreto-ley 29/2026 entered into force on 8 October following its publication in the Boletín Oficial del Estado on 7 October. The measure covers roughly five million tenants under 1.8 million rental agreements that expire before 31 December 2028. Qualifying renters who stayed current on payments over the preceding eight months can request a mandatory contract extension of one to two years. Landlords cannot freely raise rents or evict tenants to re-lease properties during this window, unless they require the home for personal or family use. Annual rent revisions are frozen through 31 December 2027 for properties priced above the state reference index, and capped at a maximum of 2% for those below it. Eviction protections for vulnerable households without housing alternatives also extend through 31 December 2030.

Temporary rentals and maintenance disputes

The decree introduces specific standards to prevent temporary leases from bypassing primary residence rules. Temporary contracts must now state and prove a genuine reason for displacement, with the legal burden of proof placed directly on the property owner. These agreements must exceed 31 days and generally cannot exceed 12 months, converting automatically into primary residence contracts if they extend beyond a year without justification or if parties sign more than two consecutive temporary leases. In addition, room rentals now fall under the Urban Leasing Act rather than the Civil Code. Tenants also gain the right to conduct necessary habitability repairs and deduct the expenses from future rent if landlords fail to respond within 15 days of receiving an estimate, a window shortened to five days for temporary leases.

Parliamentary path and tax incentives

The legislation took effect following public protests linked to the death of Maricarmen, after the dissolution of parliament and the scheduling of a snap election for 29 November. While the Congress of Deputies rejected two initial housing decrees on 2 October with votes from the People's Party, Vox, and Junts, the current decree awaits validation by parliament's Permanent Deputation. The Basque Nationalist Party announced support, providing the government with the necessary backing without relying on Junts. The regulation also establishes an annual income tax deduction starting 1 January 2027, allowing renters with a tax base below 33,007.20 euros to deduct up to 1,163 euros.

Market withdrawal and expert reaction

Data compiled by EsadeEcPol revealed immediate reductions in available rental properties across large municipalities between 29 September and 5 October. Landlords removed listings from the Idealista portal even after the initial parliamentary vote on 2 October. In an appearance on La Sexta, University of Barcelona economics professor Gonzalo Bernardos expressed doubts about requiring rental listings to publish reference indices and previous contract prices.

Today, to get and rent a home you have to pass a casting that actors working with Steven Spielberg do not pass. It is wild.

He stated that adding requirements generates bureaucracy rather than fixing housing shortages, pointing out that similar rules in Catalonia in 2025 failed to solve supply problems.

Madrid municipality housing initiatives

In response to regional supply constraints, the Madrid City Council approved two special planning measures during an extraordinary plenary session on 8 October. Passed with support from the People's Party, Vox, and independent councillors Javier Ortega Smith and Ignacio Ansaldo, the plans permit the construction of up to 18,400 protected homes on non-residential land by 2028. The initiative permits housing developments on plots reserved for offices, private facilities, and lodging, alongside higher density limits. Borja Carabante, delegate for Urban Planning, Environment and Mobility, stated that earlier regional provisions had already processed 5,806 homes on industrial land.