On April 27, 2023, the Spanish Parliament considered the strategic issue of housing legislation. A number of important amendments were adopted to address the housing crisis in Spain. The new housing law is designed to address problems in many areas, ranging from annual rent increases in Spain to eviction procedures.

What will change for property owners in Spain after the introduction of this law?

Property owners can rent out their homes for short or long term rentals in accordance with the established criteria set out in Spanish housing legislation. The legal requirements for Spanish property owners renting out their homes have changed to equally protect the rights of both the tenant and the landlord.

Parliament discussed possible solutions to prevent explosive rental price increases, especially in so-called "stress zones". The new real estate legislation in Spain is expected to come into force in the coming weeks.

The new Spanish housing legislation, or Ley de Vivienda, is expected to eliminate potential problems between tenants and landlords while protecting the rights of both parties. The main objective of the changes made is to ensure a sustainable, open market for everyone who wants to live comfortably in Spain. The decisions adopted by Parliament cover a wide range of issues, from rent increases to real estate commissions.

Limiting the rate of annual rent increases

Previously, rent prices were set in line with annual inflation. However, this increased the likelihood of a housing crisis in Spain as the gap between household income, consumer spending and rents widened.

New amendments to Spanish real estate legislation also include rent price controls in Spain. In order to reduce the cost of living and ease the burden on tenants, the new law sets a cap on rent increases of 2% in 2023 and 3% in 2024.

Agency fees are no longer required to be paid by tenants

All real estate agency fees must be paid by landlords. Under the new regulation, tenants will no longer have to pay any part of these fees.

Price limits have been set for 'stressed areas'

"Tension zones" (Zona Tensionada) are residential areas with high rental prices that force tenants to leave because of their high costs. These are provinces, districts or neighborhoods where rents exceed 30% of the average monthly family income.

Owners who already rent out their homes will be able to increase rents up to the allowable annual increase, but no more than that. If the home is not already rented, rent prices must be set according to the new INE index.

The eviction procedure has been improved

The process of evicting tenants will now work as a systematic process. From now on, tenants can only be evicted at predetermined times and for predetermined reasons. Under the new rules, tenants will be given enough time to find alternative accommodation before the eviction date. Any attempt to evict without prior notice to the tenant is prohibited.

New control mechanism for empty properties

If a property owner fails to occupy or rent a property for 2 years, they will face a certain fine for such long-term vacancy. If the property remains unoccupied for more than 2 years without a valid reason, the property owner will be penalized for the IBI tax amount with rates ranging from 50% to 100%.

If an owner has multiple vacant properties located in the same municipality, the owner may be penalized up to 150%. This regulation on empty housing is expected to contribute to an increase in the number of new properties on the Spanish real estate market.

The definition of large owners has been changed

Owners who own at least 5 or more properties in a "stressed area" are now considered large owners. They will be subject to special measures.

These changes came into force around June 2023 and will lead to significant reforms in the Spanish housing sector.