Spain prepares sweeping rental reforms and tourist let taxes for September
The Spanish government is drafting a comprehensive royal decree to overhaul rental laws and tax short-term lets, a move that will significantly alter real estate yields and tenant protections across Europe's fourth-largest economy.
Spain’s Socialist-led government is preparing a royal decree to overhaul the Urban Leases Law and introduce eleven new housing measures this September. The draft legislation, which faced delays due to parliamentary arithmetic, aims to tackle a severe affordability crisis in major cities through sweeping tenant protections and new taxes on short-term accommodations.
For real estate investors and landlords, the proposed reforms signal a substantial shift in market economics. By eliminating the ability to pass on property taxes, capping room rents, and suspending evictions for vulnerable tenants, the decree will compress rental yields and increase operational risks for property owners.
The government is also targeting the lucrative short-term rental sector to free up long-term housing stock. Tourist lets of up to 30 nights in municipalities with more than 10,000 residents will lose their value-added tax exemption, facing a new 21 percent levy equivalent to the hotel industry rate.
Tenants gain significant new leverage regarding property maintenance and condition. Landlords will have 15 days to address issues affecting habitability or safety, allowing renters to execute repairs and deduct the costs from future payments if the owner fails to act. Additionally, unsigned property condition reports will legally presume the home was handed over in good condition, preventing disputed end-of-tenancy repair claims.
The decree strictly regulates contract types to prevent landlords from bypassing long-term tenant rights. Temporary leases will be capped at 12 months and require documented justification, while renting individual rooms will now fall under standard residential lease rules and regional rent caps. Contracts expiring before June 30, 2028, will also receive mandatory extensions.
Property sales and evictions face strict new limitations to protect occupiers. Tenants will hold an unwaivable right of first refusal when a landlord sells, and evictions for non-paying vulnerable renters will be suspended until alternative housing is secured. In cases where the landlord is a small-scale individual owner, the state will cover the corresponding financial compensation during these delays.
Pedro Sánchez’s administration previously attempted rent caps and landlord incentives with limited success, making this royal decree a critical test of their housing strategy. The legislation remains in draft form and requires parliamentary approval when lawmakers return from the summer break.
