Spain's 2026 housing decrees: what changes for resident and non-resident landlords

What is official today

The Council of Ministers approved two royal decree-laws on 29 September 2026, after the eviction of an 87-year-old woman in Madrid on 23 September. The housing minister called access to housing Spain's main problem and asked Congress for a quick validation.

Decree 1: Real Decreto-ley 26/2026 (in the BOE)

• Evictions. The shield for vulnerable households with no housing alternative is extended to 31 December 2030. It does not apply when the plaintiff is an individual with two homes or fewer, and the authorities compensate the owner up to the rent not received (art. 2).
• Seasonal and room lets. A genuine, provable reason for the temporary let; in general no more than 12 months; more than two consecutive contracts between the same parties turn it into a normal tenancy. The rents of all rooms in a flat cannot exceed the rent of the whole flat (art. 3).
• Extension and rent cap. An extraordinary extension of tenancies and a cap of 2 per cent on annual updates while the measure lasts. Moncloa describes it as a two-year extension for contracts that end before 31 December 2028.
• Tax for resident landlords. New reductions of 50 to 100 per cent of net rental income depending on rent level, tight-market zone and tenant continuity, plus a deduction of up to 10 per cent of rent for lower- and middle-income tenants (art. 6).
• Investors. A ban on speculative purchases by funds until 31 December 2028 (with exceptions, for example for buyers that sign a code of good practice), a higher tax rate on undistributed residential income of SOCIMIs, 10 per cent VAT on tourist apartments, and mandatory registry certification of 'large holder' status (more than ten residential properties).

Decree 2: Real Decreto-ley 27/2026 (contract stability, in the BOE since 1 October)

The second decree amends one article of Spain's rental law (LAU, art. 10) and nothing else. Nothing in it touches tax. It enters into force on 2 October 2026.

• Automatic renewal. After the minimum term of five years (seven if the landlord is a company), the contract renews by itself for successive five-year terms (seven for companies), unless the landlord gives six months' notice or the tenant gives two months' notice.
• Compensation if the landlord refuses. A landlord who validly gives notice not to renew owes the tenant at least twelve months' rent for a comparable flat, calculated where possible on the state rent reference index, and never less than one month's rent per year the tenant lived there. It is paid when the keys are handed over.
• Existing contracts. The new wording applies to leases already in force. Contracts with less than six months left have their own transitional rule for the landlord's notice, which we have not detailed here.
• Extra time for vulnerable tenants. With a social-services report, a tenant can ask for one extra year, which a large holder must accept. In declared tense-market zones the tenant can ask for annual extensions of up to three years.
• Fit with Decree 1. Decree 1's extraordinary extension does not apply where the new renewal applies. If it does apply to a contract on which the landlord had validly given notice, the contract ends when the extension ends, and compensation is owed unless an exception applies.

When no compensation is owed

The decree lists six cases, which the landlord must state expressly, in detail and in writing in the notice:

• An individual landlord needs the home as a permanent residence for themselves, a relative to the second degree, or an ex-spouse after separation or divorce. If it is not occupied by them within three months of handover, the compensation becomes due.
• The tenant has not lived in the flat for more than six of the last twelve months, unless the absence is justified (health, work, studies, caring for relatives).
• The tenant owns another suitable home in the same municipality and can occupy it.
• The parties sign a new primary-residence lease.
• The tenant refuses a formal offer of a new lease on the same flat that guarantees five years (seven for a company landlord) and respects the rent rules in art. 17.6.
• Another justified circumstance in which the landlord proves a vulnerability.

How a non-resident landlord is taxed

This section and the example below are about individual landlords; companies are covered in their own section further down. Residents pay personal income tax (IRPF) on net rent, at the progressive scale. Non-residents without a permanent establishment pay the Non-Resident Income Tax (IRNR), which works differently:

Reading the two laws side by side: the decree changes the IRPF, and the IRNR says its taxable base is determined under IRPF rules without the reductions. So, on the literal text, non-residents get none of the new relief. That is our reading of the statutes, not tax advice, and an adviser should confirm it for your case.

What it does to the yield: a worked example

A €250,000 flat let at €1,200 a month: €14,400 a year, a 5.8 per cent gross yield, with €2,400 a year of deductible costs (property tax, community fees, insurance, repairs). Assumptions are ours and deliberately simple: no vacancy, a 30 per cent marginal rate for the resident.

Nothing in the decree raises a non-resident's tax. What changes is everything around it: rent can rise by 2 per cent a year at most while the cap lasts, the tenant is harder to replace, and the resident owner next door can keep much more of the same rent. Every point of tax difference matters more when the top line is frozen. The yield does not collapse; the relative disadvantage of owning from abroad grows.

If you own through a company (SL, SA, SE or a foreign company)

Many non-residents hold Spanish property through a company, and the decrees treat a company landlord differently from an individual. Five things change, all from the official texts:

• A different tax again. A Spanish company (SL, SA, SE) pays corporate tax (Impuesto sobre Sociedades) on its net profit: 25% as the general rate, or a lower scale (17% on the first €50,000 and 20% above) for companies whose turnover in the previous year was under €1 million. Whether a property-holding company qualifies depends on its activity, so ask. The new 50–100% reductions in Decree 1 belong to the personal income tax, so a company does not get them. A company whose main activity is letting at least eight homes can opt into a special regime that cuts the tax due on that rental income by 40% (corporate tax law, arts. 48–49); Decree 1 links a VAT measure to that regime.
• A foreign company letting Spanish property without a permanent establishment is taxed as a non-resident: 24%, or 19% for an EU/EEA entity with information exchange, and only EU/EEA entities can deduct expenses tied to the Spanish income. The special 3% annual levy on cadastral value applies only to entities resident in a tax haven, not to an ordinary foreign company.
• Stricter tenancy rules. A company landlord has a seven-year minimum term and seven-year renewal blocks, and the "I need the home for myself" exception to the twelve months' compensation exists only for individuals. Anyone, individual or company, with more than ten urban homes (or more than 1,500 m² of housing) is a gran tenedor, which carries extra duties: a large holder must accept a vulnerable tenant's extra year, and the status must be certified in the property registry. Regions can lower the threshold to five homes in tense-market zones.
• Evictions. A company cannot rely on its own vulnerability to avoid the suspension of an eviction, and the state compensation for suspended evictions goes to individuals and to companies in affordable or social letting, not to an ordinary company landlord (Decree 1, art. 2).
• A second layer of tax. Profits paid out to you are taxed again, in Spain or where you live. We have not modelled that layer.

So a company does not get you round the decrees; it swaps one rule set for another. It is worth having the structure modelled by a Spanish adviser before you buy, with the real number of homes, the tenancy type and where the owners live.

What it means, by profile

• Non-resident landlord. Model the net yield with your real costs, the 2 per cent cap and a long tenant horizon. Put the notice date in your diary: six months before the term ends. Only an individual who will really live in the flat (or house a relative) avoids the compensation; a company landlord has seven-year blocks and no such exception.
• Foreign tenant or digital nomad. More security, but possibly fewer flats if small owners sell or leave the market. Short lets with no real reason are being closed off, which matters if you rely on 'temporary' contracts.
• Buyer. The fund-purchase ban targets legal entities, not individuals. Buying a let flat means inheriting its tenancy, and the compensation passes to the buyer, so ask for the contract and its dates before you sign.
• Thinking of living in Spain? Tax residency now carries an added rental-income advantage. Our tax residency guide explains how residency is decided and what it costs.

Ask before you decide

• Does my contract fall under one of the six exceptions, and is the six-month notice date in my diary?
• Are the reductions really closed to EU/EEA non-residents under the case law on equal treatment? (Art. 24.6 gives them expense deductions, not reductions.)
• Does the higher imputed-income scale from 2027 (1.1 to 3 per cent of cadastral value) reach non-resident owners of vacant property? The IRNR points to IRPF rules; we have not verified it.
• Which regional rules apply if my flat is in a 'tense market' zone?

What to watch this week

1. Congress's vote on both decrees (expected 2 October) and whether they go on as bills, where amendments are possible.
2. How the compensation is calculated in practice (the state reference index) and how courts read the six exceptions.
3. Regional measures in tense-market zones.

Spain remains one of the most liveable places in Europe to own a home, and the rules are still being written. The clear-eyed move is not panic or pounce: it is to work out your own net yield under the tax status you actually have, and to choose your structure deliberately. If the status is the variable, it is one you can change.

This article reports what official texts say on 1 October 2026. It is not legal or tax advice. Consult a Spanish lawyer or tax adviser before acting.