Royal Decree-Law 29/2026, published in the BOE on 7 October, has been in force since 8 October 2026. The new rules bring significant changes to rental contracts, existing contracts, property purchases, evictions, finance and the taxation of rentals. Some measures have their own start dates, so each one should be reviewed carefully.

At GIPE we have prepared a practical summary to help property professionals adapt their work with confidence and rigour.

Rental contracts: the essentials

Fees and management

Estate agency work (preparing, signing, managing, amending or renewing the contract) cannot be charged to the tenant, directly or indirectly: the cost to the tenant must be 0 euros. Agency agreements and contract templates should also be reviewed to avoid any charges that could be considered hidden.

Security and insurance

Rent-default insurance or similar cover cannot be required from the tenant. On top of the statutory deposit, additional security may be requested, capped at two months’ rent for contracts of up to five years (seven if the landlord is a legal entity) and one month for seasonal rentals. For example, with rent of 900 euros:

• Main residence rental: deposit of 900 euros and maximum additional security of 1,800 euros.
• Seasonal rental: deposit of 900 euros and maximum additional security of 900 euros.

Property listings

Listings must be truthful and must not leave out key information. As applicable, they must include:

• The rent reference index, in stressed housing areas.
• The applicable rent cap, with the rules and parameters used.
• The identification number, code or title, such as the tourist rental (VUT) licence number.
• The landlord’s status as a large landlord.

This is a good time to update templates on property portals and on your own website.

End of contract

When the lease ends, both parties must sign a document recording the condition of the property when possession is handed over. If there is no such document, or no damage is recorded, the property is deemed to have been returned in good condition, unless proved otherwise. Claiming for damage later is difficult, so the best practice is to always inspect and sign.

Pre-emption and redemption

Pre-emption allows the tenant to buy the property before another buyer, at the same price and on the same terms. Redemption allows the tenant to replace the buyer if notice was defective or if the property was sold at a lower price or on better terms. In both cases, the time limit is 30 calendar days from the day following notice: for pre-emption, from verified notice of the sale; for redemption, from the buyer’s notice accompanied by the deed or sale document. In a joint sale with other properties, the notice must state the price of the home and the allocation criteria.

Seasonal rentals

A seasonal rental is one lasting from 32 days to 12 months. Up to 31 days it is a holiday rental, and going beyond 12 months is a risk, unless the temporary reason remains justified. The reason for the seasonal rental must be recorded in the contract and be provable.

In Andalusia there is an important point to bear in mind: regional rules class rentals of up to 60 days as holiday rentals. A rental of less than 60 days must therefore follow tourist rental rules and hold the corresponding Junta de Andalucía licence.

Existing contracts: extensions and rent

Extraordinary extension

Tenants may request up to two more years, one year at a time and on the same terms, if the following conditions are met:

• The property is their main residence and the contract was in force on 8 October 2026.
• The mandatory extension ends before 31 December 2028, or the tacit extension or tacit renewal ends.
• Their rent is paid up and has been paid up in each of the previous eight months.

The landlord must accept the extension, unless there is another agreement between the parties, a new contract, or a genuine need for the property for the landlord or their family, proved and notified under article 9.3 of the LAU (Urban Leases Act). Nor is it required where there is a renewal or a new contract with rent at least 5 % lower. Where the property is in a stressed housing area, the extension for those areas under article 10.3 of the LAU takes priority.

Rent updates until 31 December 2027

The rules are as follows:

• Rent may only be updated if the contract already allows it.
• If the rent is already above the reference index cap, it cannot rise.
• Without a new agreement between the parties, the maximum rise is 2 %.
• For successive seasonal contracts, the annual IRAV cap applies.

For example, with rent of 1,000 euros, the maximum would be 1,020 euros, provided the contract allows updates and there is no new agreement. This is not an automatic rise.

Purchases, evictions and finance

Curbing speculation

Until 31 December 2030, speculative entities and large landlords (legal entities and related entities) cannot acquire housing for free or for less than 70 % of its market value, as set by an independent valuer registered with the Banco de España. There are exceptions, such as social, affordable or care use, cases of gender-based violence and other situations set out in article 1.

Eviction of vulnerable people

Evictions of vulnerable tenants with no other home are suspended until 31 December 2030, even where judgment has already been given, provided the eviction has not been carried out. Vulnerability must be proved through a social services report or a court assessment. The measure covers funds and companies that buy homes or debts in order to speculate. For other landlords, the suspension lasts a maximum of three years, reviewed annually.

Loan for a first home

The decree provides for a loan to buy a first main residence with a mortgage, with no age limit and as a supplement to private finance. It covers the lower of 20 % of the property’s value and 50,000 euros, over a maximum term of ten years, at 0 % interest and with no fees. The home will be subject to a maximum resale price. Before offering it to clients, bear in mind that applications are not yet open, as it depends on a Council of Ministers agreement and subsequent implementing rules.

Social Impact Housing Fund (Fondo de Vivienda de Impacto Social)

The fund is created with initial funding of 400 million euros to finance projects with a positive social impact and attract private investment. The decree also defines affordable housing as housing whose price and costs do not exceed 30 % of the local median income of the household, and creates the Cuenta de Ahorro e Inversión Financia Europa savings and investment account, which will be offered once a ministerial order regulates it.

Tax: taxes affecting rentals

Each relief or surcharge has its own conditions and dates.

Landlords: IRPF (income tax) reduction. For new contracts with the same landlord, provided the landlord is not a large landlord, the reduction depends on how the rent changes:

• If rent falls by more than 5 %: reduction of 70 % to 100 %.
• If rent does not rise: 50 % reduction.
• If rent rises: reduction of 40 % to 15 %.

Earlier contracts are covered by transitional rules. The reduction is calculated on positive net rental income, not on gross rent.

Tenants: 10 % tax deduction. Available to tenants with taxable income below 33,007.20 euros per year. The maximum deduction base is 11,630 euros per year for taxable income of up to 23,007.20 euros, and it decreases above that amount. In addition, the family unit must not have another home within 50 km for at least half a year, unless it cannot be used.

Sales to public bodies (until 31 December 2027). The gain on selling a home to a public body providing social or affordable housing may be exempt from IRPF:

• Up to 200,000 euros: full exemption.
• Between 200,000 and 800,000 euros: the exemption decreases.
• 800,000 euros or more: no exemption.

Imputed income (from 1 January 2027). A banded scale will apply to the sum of assessable cadastral values, rather than a single rate per property. Main residences are excluded:

• Up to 100,000 euros: 1.1 %.
• Up to 500,000 euros: 1.5 %.
• Up to 1,000,000 euros: 2 %.
• Remainder: 3 %.

IVA (VAT) on short stays and building work (from 1 December 2026). Rentals of furnished homes with hotel services, or of up to 30 nights for the same tenant, will be taxed at the reduced rate. For short stays, an exception applies where the property is the landlord’s main residence. The reduced rate also applies to building work for main residence rentals, provided payment is made through bank channels, the work involves construction or renovation at least two years old, and materials do not exceed 40 % of the taxable base.

IBI and plusvalía, subject to local tax rules. None of these surcharges is automatic: they require local rules, a hearing and a council declaration.

• Homes empty for more than two consecutive years without good reason: the council may impose an IBI (property tax) surcharge.
• Outside stressed areas: if the owner has four or more homes, a surcharge of up to 50 %; if they have been empty for more than three years, up to 100 %, plus up to 50 additional points if two or more homes are empty in the municipality.
• In stressed areas: a surcharge of up to 50 %; with four or more homes, up to 100 %, and if empty for more than three years, up to 50 additional points.
• Tourist use in stressed areas: up to 50 % for one tourist home, up to 100 % for two or more and up to 150 % for four or more.

As for plusvalía (land value increase tax), from 1 December 2026 maximum coefficients of 0.11 to 0.30 apply (these are not tax rates), and their application will depend on each council’s local tax rules.

Entry into force and ratification

The decree has been in force since 8 October 2026, although some measures have their own start dates. To remain in force, it needs ratification by Congress’s Standing Committee, as Parliament is dissolved, and it must decide within 30 days of promulgation. The general election on 29 November does not itself suspend or repeal it.

Supporting our members

Every regulatory change is also an opportunity to strengthen professionalism in the sector. At GIPE we will continue to analyse the application of Royal Decree-Law 29/2026 and to offer our members continuing training and expert advice to face these changes with confidence. If you are not yet a member of the association, find out about the benefits of joining.