Spanish property law: What changed in 2025 and what applies in 2026

As we navigate the evolving landscape of housing law in Spain, significant updates introduced during 2025 continue to shape the market in 2026, particularly in rental regulations, squatter evictions, taxes, and property purchasing. This article provides an overview of what changed in 2025, what remains in force in 2026, and which proposals are still under discussion, helping landlords, buyers, and tenants understand how current rules apply and what to watch going forward.

Rising house prices in Spain

Even with the government trying to make housing more affordable, the Spanish property market continued to rise throughout 2025 and remains under upward pressure as Spain moves into 2026. This is because there's high demand for property but not enough supply, especially in popular coastal areas where new construction is slow. So, buyers may wish to factor in current price trends when planning their purchase. But whether you're buying to live in or rent out, the recent updates in Spanish property law will be of great interest.

Spanish rental market transformations

The rental market in Spain has undergone notable changes for 2025 to foster a more balanced and sustainable sector. One of the most prominent updates in the property rental law is the extension of contract duration. Previously, contracts were typically limited to three years, but as of 2025, landlords can offer agreements up to five years, with tenants having the option to renew for an additional five-year period. This change aims to provide increased stability for both parties, reducing the frequency of contract renewals and associated uncertainties.

A significant shift in rent adjustment mechanisms has also been introduced with the Índice de Referencia de Arrendamientos de Vivienda (IRAV), effective from January 1, 2025. This new index replaces the traditional Consumer Price Index (CPI) for rent updates, capping increases at the lowest value among three measures:

1. The annual CPI change for the previous year.
2. The average annual CPI change over the last three years.
3. The average over the last five years.

For instance, if the CPI for the previous year was 3%, the three-year average was 2.5%, and the five-year average was 2%, the IRAV would be 2%. This approach, capped at 2.2% for leases signed after May 2023, ensures more stable and predictable rent adjustments, particularly for contracts signed after May 25, 2023. Notably, this index does not apply to temporary rentals, rooms, commercial premises, offices, garages, or storage units, focusing solely on primary residences for long-term rental.

These rental measures remain in force in 2026 and continue to shape long-term rental conditions across Spain.

Shifting financial responsibilities to Spanish property owners

The new property law introduces an important shift in financial responsibilities from tenants to landlords. Property owners are now mandated to cover all costs associated with rental agreements. This includes fees charged by estate agents and the cost of insurance against rent default, among other expenses. This adjustment seeks to diminish the financial burden borne by tenants, creating a more equitable rental environment.

New definition of large property owners in Spain

AAnother pivotal update in the law concerns the definition of what constitutes a large property owner. Traditionally, a large property holder has been defined as someone owning more than ten properties or having a property portfolio of over 1,500 square metres, excluding garages and storerooms. The 2023 legislation, applied throughout 2025 and continuing into 2026, grants regional governments the discretion to lower this threshold to owners of more than five properties in tension zones, should they determine it necessary.

This change is part of a broader strategy to regulate the influence of large property owners within the market, ensuring that housing availability and affordability aren't disproportionately affected by concentrated ownership.

Regulations for large landlords have also been tightened, especially in "stressed rental markets." These areas, where rents or mortgage costs exceed 30% of household income or house price growth has outpaced inflation by more than 3% over five years, are subject to additional controls. This measure aims to curb excessive rent hikes in high-demand areas.

Tax benefits for landlords in Spain

Tax benefits have also been introduced to incentivise certain rental practices, and the new housing law offers some tax breaks for landlords. These include:

• 50% reduction in personal income tax on rental income.
• 60% reduction if the property has been renovated within two years of the rental contract.
• 70% reduction if the property is in a stressed area and rented to young people (aged 18-35), a public administration, or a non-profit organisation for social renting.
• 90% reduction for new rental contracts in stressed areas where the rent is reduced by more than 5% compared to the previous contract.

These tax reductions remain available in 2026, provided the specific eligibility conditions are met.

Rubbish tax introduced in 2025 and applied in 2026

From April 2025, a new rubbish tax was introduced across Spain and continues to apply in 2026. This is an extra charge to cover the cost of collecting and getting rid of rubbish. Who pays this tax depends on where you live. In some places, it's the landlord's responsibility, while in others, it's the tenant. So, if you're a landlord or tenant, check with your local town hall to find out who's responsible for paying in your area.

Changes to property tax rates in Spain

Property owners in Spain have to pay an annual property tax called IBI (Impuesto sobre Bienes Inmuebles). The amount you pay depends on the value of your property and the tax rates set by your region. These tax rates are changing in many parts of Spain. Most of the biggest cities will see an increase in IBI, but in Madrid, it's actually going down. Introduced in 2025 and applicable in 2026 is an empty property surcharge on the IBI. This measure targets properties that have remained vacant for over two years, with at least four such properties owned. This can result in a surcharge of up to 150% of the associated IBI tax. Again, it's best to check with your local town hall to see how these changes will affect your tax bill.

New regulations on tourist (short-term) rentals in Spain

With the growing popularity of platforms like Airbnb, the Spanish government introduced new rules for tourist rentals in 2025. These rules were aimed to prevent too many homes being used for short-term lets and to make sure there are enough properties available for long-term rentals.

Here are the main changes:

• Community approval: Before renting out a property to tourists, owners now need permission from their Community of Owners. This means neighbours have a say in whether or not a property can be used for short-term lets.
• Stricter rules and higher taxes: Landlords of tourist rentals now face stricter regulations and have to pay more tax. This includes registering the property on a national database and getting a permit.
• Uncertain transferability: It's not yet clear whether the permission to rent to tourists (VUT) can be automatically transferred to a new owner if the property is sold. This is something potential buyers need to be aware of.

These rules are designed to control the short-term rental market and ensure it does not negatively impact the availability of long-term housing. They continue to apply in 2026, with enforcement and local interpretation varying by region and municipality.

Squatter and eviction laws in Spain

A notable development introduced at the end of 2024 and applied throughout 2025 and 2026 is the new squatter law, aimed at addressing the rising issue of illegal occupants, known as "okupas." Approved on December 19, 2024, this law introduces a fast-track trial process for squatter evictions, significantly reducing timelines. Cases of trespassing (allanamiento de morada) and property usurpation (usurpación de vivienda) can now be resolved in as little as 15 days, a stark contrast to the previous two-year average. This involves arrested squatters appearing in court within 72 hours, with trials scheduled within 15 days and rulings issued within three days post-trial, enhancing efficiency for property owners.

This is thanks to the law making it clearer when the police can intervene and remove squatters, especially within the first 48 hours of the illegal occupation. This new Spanish law is a positive step towards protecting property rights in Spain. It should give landlords more confidence and encourage them to rent out their properties, which could lead to more properties being available and potentially lower rental prices.

For general tenant evictions, particularly for non-payment of rent, the process remains governed by the 2023 Housing Law, with no significant new changes noted in 2025. Landlords are advised to seek legal counsel to ensure compliance and avoid the inadmissibility of claims.

Buying property in Spain

For those considering purchasing property in Spain, the process retains familiar steps but includes a notable change with the discontinuation of the Golden Visa programme. This visa, which allowed non-EU citizens to obtain residency by investing €500,000 in Spanish real estate, ended on April 3rd, 2025, and is no longer available in 2026, potentially impacting investment decisions. This change may prompt buyers to explore alternative visa options, such as the Digital Nomad Visa, though it's not directly tied to property transactions.

Proposed restrictions on non-EU property buyers in Spain

In early 2025, Spanish Prime Minister Pedro Sánchez proposed a 100% tax on property purchases by non-EU residents. This was aimed at reducing foreign investment and making housing more affordable for Spanish residents. However, this proposal has evolved, and the government is now considering an outright ban on non-EU foreigners buying property in Spain unless they or their families live in the country.

This proposal has generated significant debate, with supporters arguing it could help control prices, while critics warn it may discourage investment without materially improving housing availability.

It's important to remember that this is still a proposal, and it might not become law. The Prime Minister leads a coalition government and needs support from other parties to pass this legislation. Plus, regional governments in Spain have a lot of power, and many of them, especially in areas popular with foreign buyers, might not agree to the ban.

Interestingly, other countries have tried similar restrictions on foreign buyers, like Switzerland, Singapore, New Zealand, and Canada. But when you look at what happened to house prices in those countries, it seems these restrictions didn't really work. For example, New Zealand banned foreign buyers in 2018, but house prices continued to rise. This suggests that things like interest rates, the number of houses available, economic growth, and population changes have a bigger impact on house prices than just who's allowed to buy them. Read our guide to understand what taxes are currently applicable when purchasing a property in Spain.

As of 2026, this proposal has not become law and remains subject to political negotiation and regional opposition.

Key considerations for Spanish property law changes

The changes introduced in 2025, many of which remain in force in 2026, reflect a broader effort to address housing affordability, tenant protections, and property owner rights. For landlords, the extended contract duration and new rental index provide predictability, but stricter regulations in stressed areas may limit flexibility. Tenants benefit from capped rent increases and enhanced protections, such as landlords being mandated to cover real estate fees and maintain properties in good condition. The fast-track squatter eviction process offers reassurance for second-home owners, especially in coastal areas where squatting has been prevalent.

In conclusion, navigating Spanish property law in 2026 requires understanding how the changes introduced in 2025 continue to apply in practice. Whether you are renting, buying, or managing property, staying compliant with the latest regulations is crucial for a smooth experience in Spain's dynamic real estate market. To find experts who can advise on property law, visit our directory.