The Spanish rental market will undergo the biggest legal transformation in decades in 2024 and 2025. For owners, the most significant change is the strict regulation of rents in 'tense areas' (zonas tensionadas) and the new definition of 'large owner'. This article offers a definitive analysis of the legislation (Ley 12/2023), the tax revolution for non-residents and the strategic steps you should take now to secure your returns.
1. Am I a 'Gran Tenedor' (Large owner)?
The owner's classification directly determines the legal restrictions on your rent. In 2025, this will no longer be a fixed status, but will depend on the location of your properties.
The direct answer: You are a Gran Tenedor if you own more than 10 urban dwellings (national standard). However, in a Zona Tensionada (such as Catalonia), the regional government lowers this threshold to 5 or more dwellings within that area.
Crucial rules for calculation:
- Legal entities: For companies, all property counts; there is no distinction between private and business assets.
- Co-ownership: Do you own only 50% of a property? Then this counts pro-rata. Note that if the sum of your percentages equals the threshold, you still fall under the definition.
- Exception: Your own main house, garages and storerooms count not along.
Expert insight: "Many Belgian investors mistake regional differences. An owner with six flats in Barcelona is a 'Gran Tenedor' there with price ceilings, but would be seen as a small investor in Madrid (where no zones are designated). Location now dictates your legal status."
Listen to our podcast episode on rental legislation in Catalonia here.
2. Rental pricing and the End of the Free Market
In areas officially declared Zona de Mercado Residencial Tensionado (ZMRT), free rents were effectively abolished for new contracts.
Indexation: From CPI to IRAV
The link to inflation (CPI) has been permanently broken to protect tenants from price increases.
- 2024: Maximum increase 3%.
- 2025: Indexation according to the IRAV (Índice de Referencia de Arrendamientos de Vivienda). In November 2025, it stood at 2,29%.
Price Caps on New Contracts (In Zonas Tensionadas)
The rules vary by owner type:
- Small Tenant (Pequeño Tenedor): The new rent must not exceed the last rent of the previous contract (+ allowable indexation). You may not suddenly jump to the market price.
- Great Landlord (Gran Tenedor): The price should not exceed the Index of Reference Prices from the government. Is your previous rent above this index? Then you are mandatory reduce the price on a new contract.
- Houses without history: For properties that have not been let for 5 years, the government index always applies as the maximum.
Strategic Tip: You may increase the rent by maximum 10% increase if you can show that the property has been energy renovated (at least 30% savings) or made more accessible in the last two years.
3. Contract duration: The lock-in of 2025
The legislation protects the tenant of a vivienda habitual (primary residence) with mandatory minimum terms. Temporary contracts without a valid reason are legally reclassified as permanent.
The Standard Terms
- Private landlord: Minimum 5 years (+3 years tacit renewal).
- Company: Minimum 7 years (+3 years of tacit renewal).
Extraordinary Extensions (New in 2025)
In stressed areas or with vulnerable tenants, the rules have been further tightened:
- Vulnerability: If a Gran Tenedor rents to an economically vulnerable tenant, a one-year extension is mandatory.
- Regional 'Lock-in': In Zonas Tensionadas, after the expiry of the statutory period, the tenant may make a additional 3-year extension demands at the same price.
- Consistency: A contract in Barcelona may actually 8 to 10 years last without possibility of termination or market rent increase.
4. Fiscal Revolution: Opportunities for Residents and Non-Residents
Spanish tax authorities are steering the housing market through incentives (tax cuts) rather than penalties by 2025.
For Residents (IRPF): Up to 90% Deduction
The old system (standard 60% deduction) has been replaced by a variable system:
- 90% Deduction: When signing a new contract in a Zona Tensionada with at least 5% rent reduction.
- 70% Deduction: When first rented to young people (18-35 years) in a tense area.
- 60% Deduction: After renovation for energy efficiency.
- 50% Deduction: Standard rate for other cases.
Breakthrough for Non-EU Owners (July 2025)
On 28 July 2025, the Audiencia Nacional (SAN 3630/2025) That tax discrimination against non-EU citizens (including Americans and Britons) is illegal.
- The change: Non-EU owners are now allowed, as are EU citizens, deduct costs (interest, IBI, maintenance) from their gross rental income.
- Action requirement: You can file corrections for tax years not yet statute-barred (2021-2024) to recover overpaid tax. This is a significant financial boost.
5. Seasonal hire: Plugging the Leak
Many owners fled to seasonal rentals in 2024 (alquiler de temporada) to circumvent the Housing Act. By 2025, this gap has been closed.
The 'Ventanilla Única' Register: Since 1 July 2025, any form of temporary rental must be registered. Platforms like Airbnb and Idealista remove ads without a valid number within 48 hours.
The Burden of Proof: An 11-month contract is not automatically 'temporary'. You must have a causa (autonomous reason) evidence, such as a temporary employment contract or study registration. Without this evidence, the contract will be seen by the courts as a permanent rental, with all the associated rent protection and penalty risks (up to €600,000).
Read more about common rentals in Spain.
6. Costs and Practical Implications
The law shifts the financial burden at the start of the lease entirely to the owner.
- Brokerage fees: It is strictly forbidden to pass on brokerage or administration fees to the tenant in the case of permanent rentals. For 100%, these costs will be borne by the landlord.
- Security deposit: Maximum 1 month legal deposit + 2 months additional guarantee. Total maximum 3 months security.
- Pass-through IBI/Service charges: This is only allowed if it is explicitly stated in the contract AND the exact amount is specified. In Zonas Tensionadas you may not new Add cost items that were not in the previous contract.
FAQ: Frequently asked questions about the Spanish Rent Act 2025
Does the rent limitation apply to my holiday home? No, the Housing Act and price caps apply specifically to the vivienda habitual (permanent main residence). Holiday rentals fall under tourism regulations, but require registration in the new 'Ventanilla Única' system.
As an owner, can I terminate the lease for my own use? Yes, if you are a natural person (private individual). However, you must have this explicitly included in the contract. You can claim the property for yourself or first-degree relatives after the first year, with 2 months' notice. If you do not move into the property within 3 months, a heavy penalty will follow.
What happens if I sell my flat in Barcelona with a sitting tenant? The tenant is protected. The new owner must respect the current lease, including the remaining term and any mandatory renewals (up to 8 or 10 years in stressed areas). This often has a dampening effect on the sales value of the property.
I am a non-EU citizen. How do I reclaim my tax after the July 2025 ruling? You need to file corrections to your Modelo 210 returns for the past 4 years. It is essential to do this through a tax professional referring to case law SAN 3630/2025, to still claim the deduction of expenses.
About the author: Glenn Janssens is a lawyer specialising in Spanish real estate transactions and tax regulations. Since 2017, he has been helping Belgian and Dutch individuals and entrepreneurs to safely purchase and structure real estate in Spain. He guides files from A to Z: from due diligence, ownership and tax control to estate planning and optimisation for residents and non-residents. Thanks to his years of experience, hundreds of handled files and focus on transparent communication, Glenn makes complex Spanish legislation understandable and practically applicable for every property buyer.
