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Raymundo Larraín Nesbit

This guide to Spain’s Housing Law of 2023 is written by lawyer Raymundo Larraín Nesbitt, a leading authority on Spanish housing legislation, and director of Larrain Nesbitt Abogados, a legal firm that assists clients in buying, selling, and renting properties in Spain.

Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. Ní neart go cur le chéile. VOV.

2024 © Raymundo Larraín Nesbitt. All Rights Reserved


This guide has been greatly abridged, collating only what I deem are the major changes and improvements upon existing housing regulations. I have purposely left out minor changes whose impact is negligible.

Several legal and financial concepts are assumed to be known by the reader, in the wake of previous rental and housing regulations dating back several decades.

It should be noted that several of the below changes heavily impact – and even reshape – our understanding of private property and a free market economy.

As multiple of my articles and blog posts explain, the Spanish Government relentlessly pursues a lofty goal (reduce rental prices and increase the number of properties on offer to keep inflation in check). This self-declared goal pervades all housing and rental policies. However, it does this at the expense of other people’s private property.

Major changes introduced by the Housing Law of 2023

  • Rental updates are no longer tied to the Consumer Price Index (CPI). Traditionally, Spanish rental contracts were updated annually in line with the evolution of the CPI. Following this new law, this is no longer the case. The Spanish Government capped all rental increases during 2022 and 2023 to 2% and increased the cap to 3% during 2024 (until the 31st of December 2024). As of 2025, the National Bureau of Statistics (INE) will devise and implement a new curated index which will become the new benchmark for all rental contracts, which will be well below the standard CPI. Again, to keep inflation at bay.
  • Stressed areas (zonas tensionadas). The law defines certain areas as being under duress due to tight rental demand. Such areas (purportedly) warrant the protection (read price intervention) of tenants by way of capping rental prices so they do not get out of hand. Town halls will issue curated’ rental price lists for these areas. In plain English, landlords are forced to rent at the price dictated by their town halls under threat of heavy fines for non-compliance.
  • Large property owners (grandes tenedores). Under previous rental laws, great landlords were defined as those renting out 10 properties, or more. Now, under this new law, the number is reduced to 5 properties or with a built surface of 1,500 m2. Being labelled as great landlord’ has associated severe legal, regulatory, and financial consequences, besides additional red tape i.e. a specific rental update index is applied to great landlords, as opposed to the standard rental benchmark in force as of 2025.
  • Unrented property over a 5-year period. In the case of properties which have remained unleased over the last 5 years, the new price index (of 2025) will be applied to them.
  • Rental renewals extended duration. This point takes for granted the reader fully understands the mechanics of silent renewals in long-term rental contracts.
  1. Physical landlords: for vulnerable tenants, up to 9 years. For vulnerable tenants (in a stressed area) up to 11 years.
  2. Legal landlords: for vulnerable tenants, up to 11 years. For vulnerable tenants (in a stressed area) up to 13 years.
  • Landlord to pay for agency fees and associated rental contractual expenses. Under the previous regulation from March 2019, only legal persons acting as landlords had to pay for the real estate agency fees and all associated contract costs. However, under this new law, now ALL landlords (whether physical or legal persons) have to pay for the agent’s commission (which cannot be passed on to the tenant) plus the associated expenses to rent a property.
  • Contractual exclusion of Housing Law is banned. In some particular aspects, parties were free to override the existing Tenancy Act of 29/1994 (LAU). This is no longer the case. Going forward, expenses (such as community fees, rubbish charges or local tax) cannot be used to increase the rental (to deviously circumvent the government-imposed 3% cap on rental updates, Heaven forbid).
  • Land earmarked for social development. Under previous planning laws, 30% of developed land was allocated to subsidized housing. This has been increased to 40% on new developments (new builds) and from 10 to 20% on renovated land (resales).
  • Improvements in tenant evictions. A host of new measures are enacted to protect tenants furthermore. I.e. 2-year extensions to vulnerable tenants or mortgage-related evictions are now banned until the 15th of May 2028. Meaning lenders may no longer foreclose on a property when vulnerable borrowers fall into arrears. Regional Authorities can put in motion alternative accommodation for evicted tenants.

Improvements introduced by the 2023 Housing Law

  1. Landlord tax incentives

Amendments to the IRPF (IRNR) and Corporate Tax (IS).

  • Rentals in ‘stressed areas’: up to 90% tax allowances.
  • Rentals to young tenants (aged 18 to 35): 70% tax allowance.
  • Renovation works (i.e. EU Energy Performance Certificate compliant, refurbishments or extensions): 60% tax allowance providing the following points are met:
    • Renovation works are for 10%, or more, of property valuation
    • Renovation work undertaken over the previous 2 years
    • Rental increase capped at 10% (as opposed to the standard 3% rental increase for 2024)
  1. ‘Mobilisation’ of empty housing.

Town halls are now empowered to apply tax incentives (read coercion) on owners to foster the rental of empty housing. This is done to alleviate the sharp increase in rental prices. It is hoped that on increasing the housing stock, it will bring down rental prices.

In plain English, it’s a stick-and-carrot housing policy; if you rent, you have nice tax allowances, if you do not, you get slapped with additional tax.

  • Town halls may levy on a sliding scale up to 150% IBI surcharge on empty property over the previous 2 years for landlords with 4 properties.
  • Town halls may levy on a sliding scale up to 100% IBI surcharge on empty property over the previous 3 years.
  • Town halls may levy on a sliding scale up to 50% IBI surcharge for landlords with 2, or more, properties in the same municipality.
  1. Public housing

Before, certain properties were earmarked as social housing (viviendas de protección official, or VPO). The procedure to remove this protected status – so they could be sold as freehold property after a number of years had elapsed – was winded and protracted (basically because a legal change to freehold translated into a great appreciation in value fuelling property speculation).

Going forward, this law bans the legal re-classification of subsidised property (meaning they will remain as social housing indefinitely) and in other specific cases, raises the protection up to 30 years. Spain’s stock of social housing is significantly under par (1.6%) by rapport to other neighbouring EU Member States (10%). The government wants to maintain, and even gradually increase, the stock of available public housing.