Spain: What the New Housing Tax Measures Change for Tenants and Landlords

In October 2026, Spain adopted a package of housing measures with a significant tax component. You will learn who can deduct 10% of their rent, under which income ceiling, how landlords are now treated, which dates to keep in mind, and what to check before you act.

What Was Adopted and Where the Text Stands

On October 6, 2026, the Council of Ministers approved two royal decree-laws on housing: one on protecting the social function of housing and expanding the supply of affordable homes, the other on the stability of rental contracts for habitual residence^[1]. Both texts were published in the BOE on October 7, 2026^[1].

The first decree-law is already in force^[1]. It is the richest in tax terms: one specialist distinguishes Royal Decree-Law 29/2026 of October 6, which introduces much of the rental and tax measures, from Royal Decree-Law 28/2026, which amends the duration and extension regime for certain habitual-residence housing contracts^[2].

The tax component appears in Title II of the initial version of the decree-law (26/2026), described as a set of measures aimed at redirecting housing use toward its social and residential function^[3].

Another point to know: these texts must still be validated (convalidados) by the Permanent Deputation of the Congress of Deputies, since the Cortes have been dissolved following the call for elections^[1]. The measures described below may therefore change.

References vary depending on the publication: the Spanish Tax Agency announced on September 30 a decree-law 26/2026 of September 29, not validated by Congress (resolution of October 2), while the BOE publishes a decree-law 29/2026 of October 6 covering the same subject^[4][5]. To verify an amount or a condition, start from the text published in the BOE.

Tenants: The 10% Rent Deduction

The text creates a new state deduction in the IRPF, Spain's personal income tax: taxpayers whose taxable income is below €33,007.20 per year may deduct 10% of the amounts paid during the year for the rent of their habitual residence^[1]. The Spanish Tax Agency confirms this threshold, referring to a taxable base below €33,007.20 per year^[4].

The deduction is capped. When the taxable base is equal to or below €23,007.20, the maximum base for the deduction is €11,630 per year; between €23,007.20 and €33,007.20, this maximum base gradually decreases^[2]. In practical terms, a tenant with the lowest taxable base may therefore apply 10% to a maximum of €11,630 in annual rent, and this ceiling shrinks as their income approaches €33,007.20.

The measure concerns habitual housing. It does not apply to a vacation rental or a tourist accommodation: the condition relates to the tenant's habitual residence^[2].

Expats and Digital Nomads: Who Is Really Affected?

The deduction goes through the IRPF: it is aimed at taxpayers of this tax who rent their habitual residence^[2]. If you live in Spain as an expat or digital nomad, the first question is therefore your tax status: are you an IRPF taxpayer, or do you fall under a different regime?

Don't assume you qualify just because you rent a place locally: the condition relies on habitual residence, which should be confirmed with the tax authority, to be confirmed with the tax authority.

To clarify your situation, the Spanish Tax Agency (Agencia Tributaria) offers information and management services for travelers, Spaniards living abroad, and foreigners who temporarily live in Spain^[6]. Have your status confirmed before including the deduction in a tax return.

Landlords: Modulated IRPF Reductions

For owners who are not large holders (gran tenedor), the regulation sets a sliding scale of income tax (IRPF) reductions on rental income, which can reach 100% for new contracts where the rent falls by more than 5% compared with the previous one^[1]. The text retains four situations for these reductions: the same landlord signs a new contract for the dwelling; the dwelling is rented for the first time; it is rented to a public administration or a non-profit entity for affordable or social use; or it was renovated in the previous two years^[5].

The percentages also depend on whether the area is a stressed housing zone, the tenant's age (18 to 35), or the social purpose of the dwelling, and they vary from case to case: you cannot apply a reduction automatically simply because you lowered the rent^[2]. The tax gap between cutting the rent by more than 5%, keeping it unchanged, or raising it can be very large: the new system encourages moderate rents and penalizes increases through taxation^[7].

• Several tenants: if only some of them are between 18 and 35, the age-related reductions apply proportionally to the share of the income that corresponds to them^[7].
• Exclusions: the regulation excludes from these benefits certain undeclared income and contracts that do not respect the legal rent limits^[7].
• Reduced 10% VAT: it is extended to renovation and repair work on dwellings rented as a primary residence, regardless of the landlord's status. The other conditions still apply: at least two years of age, materials supplied by the contractor not exceeding 40% of the taxable base, and payment by traceable means^[7].

For reference, the previous regime under Law 12/2023 already provided reductions of 90%, 70% and 60% for leases signed from January 1, 2024, subject to conditions^[8]. The new text modifies these reductions^[5].

Tourist Rentals, Vacant Homes and IBI

The royal decree-law sets a 10% VAT rate for tourist accommodation^[9]. Specialists stress that this requires clearly distinguishing an ordinary residential rental from short-term accommodation, which may be taxed differently^[2].

For owners, the OCU (the Spanish consumer organization) specifies that from December 1, 2026, certain rentals of apartments or furnished dwellings will no longer be exempt when they include services typical of hotels, or when the rental to a single tenant does not exceed 30 nights^[7]; an exception exists for renting the dwelling where the owner has their primary residence. These rentals move to the reduced 10% rate^[7].

The property tax (IBI) is also changing: municipalities will be able to impose a surcharge of up to 50% of the IBI bill on residential dwellings used for tourism, up to 100% for owners of two or more properties used for this purpose, and 150% for holders of four or more properties^[1].

For a vacant home, check your municipality's ordinance. If the vacancy is legally justified, keep the documents that prove it^[7].

Key Dates and Procedures

• October 7, 2026: publication of the two royal decree-laws in the BOE; the first one is already in force^[1].
• Until December 31, 2027: extraordinary limit on certain annual rent increases taking effect from the entry into force of the text^[2]. When the rent exceeds the ceiling set by the reference price index system, no increase is possible; in other cases, the increase is what the parties newly agree to and, failing agreement, cannot exceed 2%^[5].
• December 1, 2026: key date for owners, particularly for short-term furnished rentals mentioned above^[7].
• Temporary contracts signed before Royal Decree-Law 29/2026 entered into force: in principle they keep their regime until the agreed end date; if they are later renewed, they fall under the new regulation^[2].

For rental and real estate taxation in general, the Spanish Tax Agency offers information on how property ownership, rental and sale of real estate are taxed^[10]. Check the amounts and dates in the BOE and on the Agencia Tributaria website before making any decision.

Pitfalls and Points to Watch

• Text not yet validated: both royal decree-laws still need to be ratified by the Permanent Deputation of the Congress^[1].
• Primary residence: the 10% deduction targets the usual home, not a tourist or vacation rental^[2].
• Temporary contract without a real cause: according to a draft text reported by the press in July, a temporary rental contract without a stated temporary cause in the contract would lose its temporary nature and would be subject to the rules for habitual residence rentals, with retroactive effect to the signing date; check whether this rule appears in the published text^[11]. One example given by a specialist: simply signing a nine-month contract without a genuine temporary cause is not enough to make it temporary^[2].
• Chaining contracts: a temporary lease longer than twelve months without justification, or more than two successive temporary contracts between the same parties for the same home, may bring the first one under the habitual residence rental regime^[2].
• Tax gap for landlords: lowering, keeping, or raising the rent does not have the same tax effect at all, and each percentage requires checking its specific conditions^[7].

Checklist Before You Act

• Read the text published in the BOE and check amounts, dates, and decree-law numbers.
• Have the Spanish tax authority confirm whether you are subject to IRPF before applying the deduction.
• Tenant: calculate your taxable base against the thresholds of €23,007.20 and €33,007.20.
• Landlord: compare the new rent with the old one and check whether your situation matches one of the four reduction cases.
• Temporary contract: make sure the temporary cause appears in the contract.
• Empty or tourist-use home: consult your municipality's ordinance and keep your supporting documents.