Is a Spanish property reform on the horizon?

Introduction: a new Spanish housing package, already in force

Since 8 October 2026, Royal Decree-Law 29/2026 of 6 October (BOE No. 249 of 7 October 2026) has come into force. Among other things, the Royal Decree-Law amends the Ley de Arrendamientos Urbanos (LAU), Ley 12/2023 on the right to housing, the VAT Act, the Local Taxes Act and the Income Tax Act. For Belgians who own a second home in Spain, are letting it out or are considering a purchase, this primarily affects three areas: holiday lettings, seasonal rentals and taxation.

The background to this is unusual. A virtually identical decree, RDL 26/2026 of 29 September, was not approved by the Congreso de los Diputados on 2 October 2026 and was therefore automatically repealed. Following the dissolution of the Cortes Generales ahead of the elections on 29 November 2026, the government approved RDL 29/2026 on 6 October, in an expanded and revised version.

Please note: this is not yet final. Under the Spanish Constitution, a decree-law must be ratified within thirty days of its promulgation (validation). As the Cortes have been dissolved, the Permanent Deputation of Congress makes the decision. Until that vote takes place, the RDL does have full legal effect. If it is not ratified, it ceases to have effect for the future, but the legal effects that arose whilst it was in force remain, in principle, in force.

Holiday lettings: VAT, IBI surcharge and stricter advertising requirements

Those who rent out their Spanish property to tourists on a short-term basis will be most affected. Three changes stand out in particular.

1. VAT at 10 % from 1 December 2026. The amended Spanish VAT law excludes the letting of furnished flats or houses from the VAT exemption as soon as (i) the landlord provides hotel-related services (cleaning, linen, catering and the like), or (ii) the duration per tenant does not exceed 30 nights. Such lettings are now subject to the reduced rate of 10 %. The only exception is lettings in the property where the landlord has their main residence.

For a Belgian owner who is not established in Spain, this generally means registering for VAT in Spain, submitting periodic VAT returns and being obliged to charge VAT to private tenants. A reverse charge mechanism (reverse charge mechanism) does not apply where the tenant is a private individual. On the positive side: VAT on costs relating to the taxable letting is, in principle, deductible.

2. IBI surcharge up to 150 %. The amended Local Taxes Act allows local authorities to area with a tight residential property market to levy a surcharge on the ‘cuota líquida’ of the property tax (IBI) for properties intended for tourist letting:

The surcharge is optional: it requires a municipal tax ordinance, is payable on 31 December and applies to taxable periods commencing after the date of entry into force. In practical terms, therefore, it cannot be levied until the 2027 IBI year at the earliest.

3. Registration number and transparency in every advert. The RDL requires any advertisement or offer relating to a rental property to state, amongst other things, the property’s identification number or registration code, as well as the capacity of gran tenedor where applicable. At the same time, the LAU introduces a new system of penalties for online platforms that fail to comply with their obligations under the Ventanilla Única Digital de Arrendamientos and Regulation (EU) 2024/1028, with fines ranging from 100,000 euros to 1 million euros or 2 % of global annual turnover. Advertisements without a valid registration number will therefore be removed more quickly.

Finally, the LAU clarifies that the provision of accommodation for tourism purposes, which falls outside the scope of the LAU, may never exceed 31 days.

Seasonal rentals to become “temporary accommodation” subject to strict conditions

The classic arrendamiento de temporada will be phased out as a freely regulated tenancy for non-residential use. It will be replaced by the temporary residential tenancy, which will henceforth be subject to the rules governing residential tenancies belongs to the LAU.

• Mandatory case. The contract must explicitly state the genuine and demonstrable reason why the tenant is temporarily away from their usual place of residence (work, study, medical treatment, etc.). The burden of proof lies with the landlord. If no such reason is provided, the tenancy agreement shall be deemed, with retroactive effect from the date of conclusion, to be a standard residential tenancy.
• Duration. More than 31 days and, as a rule, up to 12 months. It may only be extended for as long as the temporary cause persists.
• Retraining. If the tenancy lasts for more than 12 months without justification, or if more than two fixed-term tenancy agreements are concluded or renewed consecutively between the same parties in respect of the same property, the first agreement shall be deemed to be a standard residential tenancy, with the statutory minimum term of five (or seven) years and the statutory renewal provisions.
• Rent. In the case of successive fixed-term tenancies for the same property, the rent may not increase by more than the IRAV index each year.
• Warranty and maintenance. The additional security deposit, in addition to the fianza, is limited to one month’s rent. The landlord must keep the property in a fit state for habitation and also bear the cost of minor repairs; if he fails to respond within five working days, the tenant may carry out the repairs himself and deduct the cost from the next month’s rent.
• Termination by the tenant. After one month, with ten days’ notice and without compensation.\

Room lettings. The letting of a room or space within a property is now also explicitly covered by residential tenancy law, whether on a permanent or temporary basis, depending on the need it fulfils. The total rent for concurrent room tenancy agreements must not exceed the rent for the entire property. Furthermore, in a high-demand area, statutory rent controls apply.

Transitional arrangements. Seasonal contracts concluded before 8 October 2026 will remain subject to the old rules until the end of their agreed term, after which they will expire without the possibility of renewal. Any renewal will be subject to the new rules. Autonomous communities will retain their own rules on temporary accommodation and room lettings.

Standard residential tenancies: increased costs for landlords

Anyone who rents out their Spanish property as their main residence on a long-term basis should review their standard tenancy agreements.

Costs and taxes. Estate agent’s fees, management fees and costs associated with formalising the contract may no longer be passed on to the tenant, either directly or indirectly. Property taxes, such as the IBI, may not be charged to the tenant either, unless the tenant is the taxpayer. In buildings not governed by the law on flat ownership (condominium) are no longer eligible for the passing on of shared costs.

End of the special arrangements for luxury rentals. Until now, when letting an entire property of more than 300 m², or with an initial annual rent of more than 5.5 times the statutory minimum wage, the parties were free to negotiate. The mandatory rules for residential tenancies applied only as a supplement in such cases. The RDL removes this exception. Luxury properties let as a principal residence will also now be fully subject to the mandatory tenancy regime: a minimum term of five (or seven) years, statutory renewals, indexation caps, restrictions on security deposits and a ban on passing on estate agent’s fees and taxes. The RDL does not contain any specific transitional provision for existing luxury tenancy agreements; for new agreements, the new regime applies in full in all cases.

Repairs. In the event of defects that affect the habitability, safety or health of the property, the tenant may request repairs in writing, accompanied by a reasonable quotation. The landlord has fifteen calendar days to accept the request, propose an alternative or carry out the repairs themselves. Thereafter, the tenant may have the work carried out and set off the cost against future rent payments.

Guarantees. The supplementary guarantee is limited to two months’ rent for tenancies of up to five years (seven years where the landlord is a legal entity). A tenant may no longer be required to take out rent guarantee insurance (credit insurance) to conclude the contract. At the end of the contract, the condition of the property is recorded in a document signed by both parties; if no such document exists, it is presumed that the property was returned in good condition.

Right of first refusal. The right of pre-emption and repurchase (right of first refusal and right of redemption) of the tenant remains in force in the event of a block sale, provided that the dwelling can be legally identified as a separate unit. The notification must state the price allocated to the property and the objective allocation criteria, preferably based on the cadastral reference value. A contractual waiver of this right is no longer valid.

Indexing. Unless expressly stipulated otherwise, the rent is not subject to indexation. Where there is a clause excluding indexation, the IRAV applies, which also serves as the absolute ceiling. In addition, an exceptional restriction applies to indexation between 8 October 2026 and 31 December 2027: no increase whatsoever if the rent exceeds the reference index ceiling, and otherwise a maximum of 2 % in the absence of a new agreement.

Extraordinary extension. Provided the tenant has paid their rent punctually for the previous eight months, they may request an exceptional extension in annual instalments for up to two years if the mandatory extension expires before 31 December 2028 or a tacit extension comes to an end. The landlord may only refuse this if there is a different agreement, a new contract or a proven personal need for the property, even if this was not provided for in the contract. In a high-demand area, the special extension of up to three years takes precedence.

Contracts concluded prior to Ley 12/2023 (26 May 2023) will now also be subject to the statutory extensions and the new indexation caps; in all other respects, the previous regime remains in force.

Evictions of vulnerable tenants: suspension until the end of 2030

The RDL is putting in place two layers of protection for tenants in a situation of (economic) vulnerability who have no alternative accommodation.

Extraordinary innervation by the government. In eviction proceedings for non-payment of rent, the tenant’s vulnerable circumstances are reported to the competent authority. The authority is given a non-extendable period of two months to either provide alternative accommodation or to pay or deposit all amounts claimed and due, plus legal costs. During this period, the proceedings and the eviction are suspended. If the authority pays, the proceedings end and the tenancy agreement continues. If it takes no action, it automatically takes the tenant’s place as the debtor, and eviction cannot take place for as long as the vulnerable situation persists. This is a structural measure with no expiry date.

Temporary suspension until 31 December 2030. When the extraordinary innervation If this is not the case, the court will stay the proceedings (even after a judgement has been handed down, provided the eviction has not yet taken place) if the authorities do not offer suitable accommodation. The stay is reviewed every twelve months and lasts for a maximum of three years. Private landlords and landlords of affordable or social housing are entitled to compensation from the government: up to the amount of lost contractual rent, unpaid utility bills and legal costs, but not lost profits or non-pecuniary damage.

For small private landlords, two exceptions are important. The suspension will not apply if the court rules that the landlord’s own economic or housing vulnerability must take precedence. Furthermore, the tenant’s vulnerability does not take precedence where the landlord is a natural person who owns no more than two properties.

The new rules also apply to ongoing enforcement proceedings in which the deportation has not yet been carried out.

Taxation: what’s changing for non-residents?

Most tax measures amend Law 35/2006 (IRPF) and are therefore intended for tax residents of Spain. For a Belgian who remains a tax resident of Belgium and is subject to non-resident tax (IRNR) in Spain, the impact is more limited.

Rental income. The new, highly differentiated reductions in the net rental yield (ranging from 15 % to 100 %, depending on the trend in the rent, the property’s location in a high-demand area and the tenant’s age) apply only for the purposes of personal income tax (IRPF). Non-residents cannot, in principle, apply them, just as was the case previously.

Flat-rate income from a property that is not let (allocation of property income). From 1 January 2027, the IRPF Act will replace the fixed percentage (1.1 % or 2 % of the cadastral value) with a progressive scale based on the sum of the cadastral values: 1.1 % up to 100,000 euros, 1.5 % from 100,000 to 500,000 euros, 2 % from 500,000 to 1,000,000 euros and 3 % above that. The law on taxation of non-residents refers to the IRPF rules for this calculation. How the scale is applied in practice to a non-resident with one or more properties still requires clarification from the Agencia Tributaria. For 2026, the rate of 1.1 % will remain in place for municipalities with recently revised cadastral values.

Vacancy surcharge on the IBI. The revised Local Taxes Act allows local authorities to levy a surcharge of up to 50 % (in certain cases up to 100 % or more) on properties that have stood vacant continuously for more than two years without valid reason. Outside high-demand areas, this applies only to owners of four or more properties; within a high-demand area, it applies to every owner. A second home is explicitly considered a valid reason, with a maximum of four years’ continuous vacancy. A holiday home that is used regularly is generally not subject to the surcharge, but proof of use (consumption of utilities) is becoming increasingly important.

Municipal capital gains tax. From 1 December 2026, new maximum coefficients will apply to the objective calculation of the municipal capital gains tax (IIVTNU), ranging from 0.11 to 0.30 depending on the length of ownership (for example, 0.22 after ten years and 0.30 after twenty years or more). The option to have the tax calculated on the basis of the actual capital gain will remain in place.

Sale to a public housing organisation. The new exemption from capital gains tax on the sale of a property that has stood vacant for at least two years to a public body for social or affordable housing (until 31 December 2027, fully applicable up to 200,000 euros and on a degressive basis up to 800,000 euros) is an income tax measure and therefore, strictly speaking, does not apply to non-residents.

Acquisition, major owners and other measures

Restrictions on speculative purchases. Until 31 December 2030, funds that purchase property or portfolios of unpaid mortgage loans at prices well below the valuation, and legal entities that gran tenedor (and entities within their group) must not acquire a property for free or for a consideration lower than 70 % of the market value. This market value is determined by an independent valuation firm registered with the Banco de España. For a private Belgian buyer, this changes little, but anyone who owns multiple properties through a company must check whether they exceed the threshold of gran tenedor exceeds.

Concept gran tenedor tightened up. The threshold remains at more than ten urban dwellings or more than 1,500 m² of living space (excluding garages and storage rooms), to be reduced to five dwellings in high-demand areas. A new requirement is that this status must be evidenced by a certificate from the Registro de la Propiedad, and that each residential unit within a single registered property counts separately, even without a registered subdivision (horizontal division). A Belgian who, for example, owns an entire block of flats without it having been divided into separate units, can thus, without anyone noticing, gran tenedor will be introduced, with implications for rent caps, lease renewals and disclosure requirements.

Transfer of mortgage loans. The Mortgage Credit Act now stipulates that the borrower retains the same defences and grounds for objection against the assignee of their loan, including set-off, and that they must be notified of the assignment.

Other measures. The RDL also introduces the TU CASA ICO scheme (an interest-free loan of up to 20 % of the property’s value or 50,000 euros for the purchase of a first main residence, with a permanent maximum resale price), a Social Impact Housing Fund, a statutory definition of affordable housing (price, including costs, not exceeding 30 % of the median household income in the municipality), stricter rules for SOCIMIs and the new ‘Cuenta de Ahorro e Inversión Financia Europa’ savings and investment account. These measures are primarily aimed at tax residents and institutional investors.

Checklist for Belgian owners of Spanish property

• Do you let out property to holidaymakers for up to 30 nights per tenant? Make arrangements for Spanish VAT registration and invoicing at 10 % VAT by 1 December 2026.
• Check that your property has a valid registration number and that this is included in every advert and on every platform.
• Is your property located in a high-demand area? Follow the local authority’s tax ordinance Eligible for a potential IBI supplement from 2027.
• Revise your temporary tenancy agreements: explicit and demonstrable grounds, a maximum of 12 months, and no more than two consecutive tenancies.
• Remove from your tenancy agreements any clauses relating to the passing on of estate agent’s fees and IBI, compulsory rent guarantee insurance and the waiver of the right of first refusal.
• Plan rent indexations until the end of 2027, with a ceiling of 2 % (or 0 % above the reference index ceiling).
• Keep records of your use of your second home (utility bills, proof of occupancy) to avoid any vacancy charge.
• Do you own several properties or an undivided building? Check whether you gran tenedor are.

Conclusion

RDL 29/2026 clearly shifts the balance between landlords and tenants in Spain in favour of tenants and makes short-term lettings more burdensome from a tax and administrative perspective. For Belgian owners of holiday homes, the VAT obligation from 1 December 2026 and the new rules on short-term lettings are the most pressing issues. As the framework may still change following ratification by the Permanent Deputation and the elections on 29 November 2026, it is advisable to monitor developments closely.

Would you like to know what this reform means in practical terms for your property, your tenancy agreements or your tax return? Confianz supports Belgian property owners with questions regarding Spanish property, tenancy and tax matters, offering a consultation or bespoke written advice. Feel free to get in touch.

This article reflects the state of the law as at 3 November 2026 and does not constitute legal advice in relation to any specific situation.