In a continued bid to clamp down on spiralling rental costs, the Spanish government has now designated San Sebastián (Donostia), La Coruña, and 21 towns in Navarre as “residentially stressed” or “tensioned” rental zones where rents can be suppressed by law. This brings the total number of formally stressed areas to 301 across four autonomous communities, encompassing over 8.28 million residents.
What does “zona tensionada” status mean?
The “strained zone” (zona de mercado residencial tensionado) label is a technical classification introduced in Spain’s new Housing Law. It allows for measures to regulate rents in areas where prices have increased faster than salaries, or where more than 30% of an average household’s income is being spent on rent.
Landlords in these areas—especially institutional and large-scale landlords (“grandes tenedores”)—must adhere to rent caps based on an official government index, rather than market rates. Additionally, the government expects local authorities to draw up housing plans to boost rental supply within three years.
The newly designated municipalities in Navarra include Pamplona, Tudela, Valle de Egüés, Burlada, and 17 others. In the Basque Country, the district of Galdakao (District 2) joins the list. In Galicia, A Coruña officially becomes the first tensioned zone.
Tax breaks for “good” landlords
While the headlines often focus on rent caps, the law also offers carrots alongside the stick. Owners who voluntarily reduce rents by at least 5% are eligible for tax deductions of up to 90% on rental income. An illustrative example provided by the Ministry of Housing shows that a landlord reducing rent from €700 to €665 can save the tenant €420 annually while preserving profitability through tax relief.
The government insists this structure supports tenants and smaller-scale landlords alike, as opposed to penalising property owners across the board.
More regions to come
The Ministry has hinted that this is just the beginning. Santiago de Compostela, Asturias, and additional Basque municipalities are reportedly up next for review. The rollout so far has largely depended on political willingness at the regional level, with Catalonia leading the way—over 11,800 new rental contracts have been signed since it adopted the measures.
But not everyone’s on board
As expected, there is strong opposition from regional governments controlled by the Partido Popular (PP), who accuse the national government of interfering with market dynamics. In return, the Ministry of Housing has accused these communities of attempting to sabotage or delay the application of the law, despite growing affordability concerns.
From the Ministry’s perspective, the policy is a response to public pressure. “The public is asking us to act, to protect the housing market, and to ensure equal access to decent housing,” said a ministry spokesperson.
Implications for the housing market
While the long-term impact of tensioned zone designation remains to be seen, there are multiple moving pieces. On the one hand, rent controls could stabilise costs in the short term for tenants. On the other, critics warn that regulation may reduce the overall supply of rental housing if landlords decide to exit the market or convert properties to tourist accommodation or short-term lets.
For investors and property owners, the key will be adapting to a patchwork of rules that now vary regionally and, increasingly, locally. Whether navigating rent caps or benefiting from fiscal incentives, the days of unregulated residential rental markets appear to be numbered—at least in parts of Spain where the housing crunch is most acute.
Stay tuned. With more municipalities under review, this isn’t the last we’ll hear about zones under stress.
