Spain’s government has unveiled a major new housing package that would offer landlords a 100% income tax deduction if they freeze rents when contracts are renewed, alongside tougher rules on seasonal lets and room-by-room rentals.
The measures were announced on Monday (January 12) by Prime Minister Pedro Sanchez, who said the aim was to protect tenants while clamping down on what he described as speculative practices in the rental market.
Below is what has been announced and what it could mean in practice.
100% tax deduction for landlords who don’t raise rents
The headline proposal is a full (100%) IRPF income tax deduction for landlords who do not increase the rent when renewing an existing rental contract.
According to Sanchez, the idea is to compensate owners for the income they would otherwise gain by raising rents, meaning:
- Tenants stay in their homes without a rent hike
- Landlords keep their tenants and avoid void periods
- The state avoids further pressure on an already overheated market
It comes as the Ministry of Consumer Affairs estimates that more than 630,000 rent-controlled contracts signed during the Covid period will expire this year.
Without intervention, renewals could trigger rent rises of 30%–50%, affecting around 1.6 million people and adding an average €1,735 per household.
The government has not yet confirmed whether the tax break will apply only to renewals with the same tenant or also to new contracts with new tenants.
Crackdown on ‘fraudulent’ seasonal rentals
The second pillar of the decree targets the booming use of seasonal rental contracts, which the government says are increasingly used to sidestep tenant protections.
Planned changes include:
- Stricter conditions for a contract to qualify as seasonal
- A requirement for landlords to justify the temporary nature of the rental
- A maximum duration of nine months
- Sanctions for landlords who misuse seasonal lets
The move follows the stalling in parliament of a broader law backed by left-wing parties to regulate short-term and room rentals, blocked late last year by Junts.
Sanchez said cities are increasingly full of short-term contracts that force tenants to renegotiate constantly, creating ‘permanent insecurity’ with no real justification beyond profit.
Limits on room-by-room rentals
The third measure aims to curb what the government calls the abuse of room rentals, where entire flats are split into bedrooms to maximise income.
Under the proposal:
- The total rent from individual rooms cannot exceed what the full property would legally rent for
- In declared high-pressure areas, room rentals will also be subject to rent controls
- Tenants renting rooms will gain similar protections to those in standard contracts
This approach is already in force in Catalonia, where the rules came into effect earlier this month.
Political backlash already under way
The decree will need approval from the Congress of Deputies, and that is far from guaranteed.
Sumar has said it will vote against the tax break, calling it a ‘gift to landlords’.
Podemos has also rejected the measure, arguing it favours owners over tenants.
VOX has criticised the policy as ineffective and blamed the government for the housing crisis.
Meanwhile, the Federación Nacional de Asociaciones Inmobiliarias (FAI) said that while the 100% deduction ‘goes in the right direction’, it will not increase rental supply without stronger legal protections for landlords.
The proposed measures will be bundled into a royal decree law, which must be ratified by parliament in the coming weeks.
