Spanish rental law changes in 2023
In May 2023 there were further changes to the Spanish rental law for long term rentals. The main changes which are beneficial to tenants are as follows:
The annual renewal increase on rental contracts has been capped.
These increases are in line with inflation, but for 2023 the rental price annual renewal increase is capped at 2%. For 2024 the cap is set at 3%. For 2025 the National Statistics Institute will set a new reference index in order to make rental contract increases more stable for tenants.
The owner has to pay the estate agency commission or fee.
In a previous rental law update the owner had to pay the agency fee if the owner was a business or legal entity. This latest amendment declares that all owners of rental properties must pay the agency fee on long-term rentals.
Owners cannot increase the rent due to other expenses.
Unless agreed at the time of the contract signing, owners cannot increase the rent because of new expenses for the property.
The Spanish rental law was altered again on 6th March 2019. This brings back many of the first changes from December 2018 that were over-ruled in January 2019.
The main changes are as follows. Long term rental contracts are now for a period of 5 years if the owner is a person. If the owner is an entity or company, then the contract must be for 7 years. The tenant has the right to terminate the contract after 6 months, but there is usually a penalty involved to do so. However, after 12 months the tenant has the right to cancel the contract without penalty.
At the end of the 5 or 7 year period of a contract, if neither party give notice, the contract will automatically renew for another 3 years. (This is a change from the previous one year automatic renewal.)
The additional guarantees that tenants can be asked to give, on top of the one month deposit, are limited to the equivalent of 2 months’ rent.
The estate agent’s fee is payable by the new tenant. If the owner of the flat is a company then the estate agent’s fee should be paid by the owner.
The ITP (transfer tax) that tenants had to pay on signing a new rental contract has been removed.
Updated: 18 March 2019.
Changes to the rental law (Ley de Arrendamientos Urbanos) in Spain in December 2018 help towards making rentals more stable for the tenant. The main changes are as follows.
The term for a standard long term rental contract has increased from three years to five years. This is the obligatory period for the landlord, and rent cannot be increased during that term (during a rental contract the rent can only increase in line with inflation, those figures are taken from the IPC (Indice Nacional General de Precios al Consumo)). After 12 months, the tenant can give notice to leave the property without penalty. A tenant can leave after six months, but there is usually a clause stating there is a penalty to do so.
On the renewal date of a rental contract, if neither party gives notice, the contract will automatically renew for three years. Previously this renewal term was one year.
The deposit amount when renting has always been the equivalent of one month’s rent. However, additional guarantees are usually asked for and historically these have been anything from one month up to six months. Additional guarantees are now limited to the equivalent of two months’ rent. They also have to be money deposits and not bank guarantees.
There are different new rules concerning properties that are owned by a legal entity, such as a company. In those cases, the rental term has to be seven years. The renewal if neither party gives notice is also three years.
A huge help to tenants is that where owners are a legal entity, those owners have to pay the agency fee rather than the tenant having to do so. This makes much more sense and I wish this rule applied to all rentals.
ITP (Impuesto sobre Transmisiones Patrimoniales) – a tax tenants were meant to pay on signing every new rental contract has been made exempt. In reality, most tenants didn’t know they had to pay it, and in many cases it went unpaid.
There are other changes to the Spanish rental law, mainly to help support people in assisted housing and those people under threat of eviction.