The Spanish government has decided to radically rethink its approach to the rental housing market. The focus is on tackling rising prices, speculation, and attempts to bypass regulations through short-term contracts. Authorities insist that honest landlords will receive support, while those looking to profit from others’ misfortunes will face consequences.
Prime Minister Pedro Sánchez has personally unveiled a package of reforms set to change the rules for millions of renters and property owners. In the coming weeks, the Council of Ministers will review a new royal decree, which promises to become the year’s most debated document.
Tax incentives
The main announcement is tax breaks for those who don’t raise rent when renewing contracts. Authorities are offering a 100% discount on personal income tax (IRPF) for landlords who maintain the current price for their tenants. Essentially, the state compensates what a landlord could have earned by increasing the rent. According to the government, this measure should make the market more stable and predictable.
The benefits are clear: landlords get a bonus, while tenants enjoy peace of mind and protection from sudden price hikes. Authorities stress that this isn’t just another initiative—it’s a real tool to support responsible market players.
Crackdown on short-term rentals
In recent years, Spain has experienced a real boom in short-term rental contracts. Many property owners prefer to sign so-called ‘seasonal contracts’ to bypass restrictions and revise terms more frequently. As a result, tenants are forced to live in constant uncertainty, while cities are losing long-term residents.
The government now plans to put an end to this. Clear criteria are being introduced to define what qualifies as a seasonal contract, and serious fines are set for violations. Officials are open about their goal: to stop housing from becoming a tool for quick profit and restore confidence to those renting long-term.
Room rental restrictions
Another issue is the widespread subdivision of apartments into individual rooms, which are then rented out at inflated rates. Authorities note that this practice has become especially popular in major cities where housing demand outpaces supply. Owners turn regular apartments into mini-hotels, forcing tenants to pay more for fewer comforts.
According to the new rules, the total rent for all rooms must not exceed the rental price of the entire apartment. In high-demand areas, additional limits and oversight mechanisms will apply. This aims to curb price growth and make the market more transparent.
Affordable housing development
Alongside the rental reform, authorities are launching large-scale projects for affordable housing construction. In Madrid, ‘Operación Campamento’ (Operación Campamento) has been launched—the largest residential development project in recent decades. The plan includes more than 10,000 apartments that will be rented or sold at below-market prices.
Special attention is being paid to ensure housing is accessible to families of all income levels. Rental apartments will be offered at rates not exceeding 30% of the median salary in the district. Purchase is also restricted: only those without other real estate and with incomes within certain limits will be eligible.
A City for People
The new neighborhood will cover more than 200 hectares, with a quarter dedicated to residential buildings. The rest will include parks, streets, public areas, and infrastructure for residents. Authorities promise that this will not be just another commuter district, but a modern space for living, working, and leisure.
Minister of Housing and Urban Agenda Isabel Rodríguez (Isabel Rodríguez) is confident the project will set an example for the entire country. All apartments are being built with state funding and will be offered at fair prices. Officials expect these measures to restore trust in the market and reduce social tensions.
Overall, the government’s new initiatives are an attempt to strike a balance between the interests of tenants and property owners. On one hand, there is support for those who rent out their properties legally. On the other, there is strict control over those trying to bypass the law. Spain is betting on long-term stability, and this path is undoubtedly challenging. But it seems there is no other choice left.
