In early February, Spain’s Congress of Deputies is expected to vote on a bill that could radically reshape the country’s rental housing market. The legislation targets the regulation of short-term rentals and room leasing—a longstanding source of friction between tenants and property owners. The debate goes beyond tenant protections and also focuses on what new opportunities may become available to apartment owners.
According to information from the Tenants’ Union of Madrid (Madrid), the government has given a clear signal: the bill will be put to a vote in the coming weeks. The new version of the Urban Leases Act (Ley de Arrendamientos Urbanos) contains a set of measures designed to protect tenants from sudden price spikes and fraudulent schemes, which in recent years have become a serious problem for thousands of families.
Tension zones
One of the bill’s key provisions is the possibility to extend rental contracts by three years for residents living in so-called ‘tension zones’—areas where housing prices are rising especially fast. However, union representatives point out that this measure will only impact select regions: Cataluña, País Vasco, Galicia, and Navarra. The remaining autonomous communities will be left out, sparking frustration among tenants who find themselves outside the scope of the new rules.
At the same time, these regions are experiencing a true boom in coliving spaces and short-term rentals, which is pushing out long-term residents. The new rules were meant to shield tenants, but their limited scope raises questions about the fairness and effectiveness of the reform.
Political landscape
The bill was proposed by tenants’ unions and has gained support from several political groups. Its backers include the Spanish Socialist Workers’ Party (PSOE), the Basque Nationalist Party (PNV), and parties traditionally defending tenants’ rights: ERC, Bildu, Sumar, Podemos, and BNG. The law lacks only the votes of Junts for final approval, making the situation particularly tense ahead of the vote.
The tenants’ union insists that the law should not become a bargaining chip in political games. They are calling on all parties and organizations to act responsibly and refrain from populist moves that could jeopardize the interests of millions of tenants.
Tax incentives
Amid discussions on the law, Prime Minister Pedro Sánchez announced the development of a new set of measures, including tax breaks for property owners who keep rents stable when renewing contracts. There are also plans to tighten control over short-term rentals and curb abuses related to room rentals.
However, the tenants’ union is sharply critical of such initiatives. In their view, tax breaks are nothing more than a gift for owners that fails to address the root of the problem. Tenants fear that property owners will choose between taking advantage of benefits and the opportunity to raise rents, or even evicting tenants to maximize profits. According to the union, this policy only consolidates the power of so-called ‘rentiers’, turning the rental market into a virtual tax haven for landlords.
Double Standards
The union points out: while working citizens pay taxes, apartment owners enjoy bonuses for renting out their properties, and tenants are forced to spend up to 70% of their income on rent—and pay additional taxes on top. This situation, they say, creates unequal conditions and fuels social tensions. Last year, the government proposed measures to lower rent prices in line with the official index, but now, according to the union, authorities have backed down under pressure from lobbyists.
As an alternative, the union is calling for indefinite rental contracts, a model long practiced in Germany, France, Sweden, Denmark, Norway, and Austria. Activists believe this is the only way to guarantee real stability for millions of tenants and put an end to speculation in the housing market.
The Future of Renting
The question of who will benefit from the new regulations remains open. On one hand, authorities are trying to strike a balance between the interests of tenants and property owners by proposing compromise solutions. On the other, unions and civic organizations are demanding more radical measures to halt rising prices and put an end to mass evictions.
For now, Spain’s rental market remains a minefield, where every move can lead to unexpected consequences. A decisive vote is ahead, one that will determine the future for millions of families. Whether the rental market will stay accessible to ordinary citizens or become an enclave for the privileged will be revealed soon.
If you didn’t know, the Madrid Tenants’ Union (Sindicato de Inquilinas e Inquilinos de Madrid) is one of the most active organizations advocating for tenant rights in Spain. In recent years, they have repeatedly launched public campaigns, pushed for legislative changes, and taken a stand against housing market speculation. Tenants across the country support their efforts, and their influence on housing policy continues to grow.
