On September 23, police removed an 87-year-old woman from her Madrid flat on a stretcher. Her name is Maricarmen Abascal, and her family had rented that flat since 1956. Six days later, Spain's cabinet answered with 2 decrees, and together they make up the most important Spain housing law of 2026.
The pictures moved a lot of people, and they should have. But when I went through the decrees, one number caught my eye more than any other: €22,848. Under the new rules, that's what it can cost an owner to take back a single 80 m² flat in Barcelona after 5 years.
At Freedom Files we're pro-owner, pro-investor, pro-builder and pro-free market. So we look at a law like this the way an investor would, by asking what it does to the supply of homes. By that test, Spain's new package makes the shortage worse.
What the 2026 Decrees Change
The first decree appeared in the official gazette, the BOE, on September 30. The second appears today, October 1. Both took effect on publication, but Congress has 30 days to approve them, and it can reject either one.
Here's what the 2 decrees do, in plain English and from an owner's point of view.
| Rule | What it does | Ends |
|---|---|---|
| Eviction shield | Courts can't evict vulnerable tenants with no other home. The state pays the owner compensation. | 31 Dec 2030 |
| Lease extension | A tenant who has paid on time for the past 8 months can ask for an extra extension. The owner must agree unless the owner or a relative needs the home. | 31 Dec 2027 |
| Rent cap | With no new agreement, rent goes up 2% at most. Zero increase if the rent is above the reference index. | 31 Dec 2027 |
| Fund purchase limit | Companies and funds can't buy homes or whole buildings below 70% of assessed value, except for social housing. | 31 Dec 2028 |
| Automatic renewal | After year 5, a lease renews for 5 more years. To refuse, the owner gives 6 months' notice and pays 12 months' rent for a similar property, unless the owner or a relative needs it. | No end date given |
| Temporary and room lets | The lease must state why the tenant needs a short let. Past 12 months with no valid reason, the law treats it as a main-home lease. | No end date given |
| Tourist lets | New 10% IVA on lets under 1 month. Town halls can add up to 50% to IBI property tax, or 100% for owners with 4 or more tourist units. | No end date given |
| SOCIMI tax | Tax on residential rent profits goes from 15% to 25%, with cuts of 50-100% for affordable units. | No end date given |
| Owner tax deduction | Base deduction of 50%. It goes up to 100% if you cut rent by more than 5%, and down to 15% if you raise it by more than 20%. | No end date given |
| Tenant tax deduction | 10% off income tax for tenants who spend 50-60% of income on rent and earn under €33,007.20. | No end date given |
To be fair, 2 parts of the package push in the right direction, and we'd vote for both. The decree cuts IVA on public and protected housing to 4%, which lowers the cost to build. On top of that, the new Tu Casa scheme lends first-time buyers up to 20% of the price at 0% interest, capped at €50,000 over 10 years.
Why a Rent Freeze Makes Spain's Shortage Worse
At first glance, a rent cap looks like help for tenants. For the tenant who already has a lease, it is, at least for a while. The trouble shows up later, when the next family goes looking for a flat.
That's because Spain's core problem is supply. The Bank of Spain puts the gap at 700,000 homes. House prices rose 12.2% in the year to the second quarter of 2026, according to the statistics office INE, and Idealista says rents climbed 8.5% in 2025.
So the country needs more homes, and someone has to pay to build them. In practice, that someone is usually a developer or a fund with capital. The government calls some of these buyers "vulture funds," and the new decree limits what they can buy until the end of 2028.
Put yourself in the shoes of one of those funds. Rent rises on existing leases are capped at 2% through 2027, and ending a lease after year 5 costs a full year's market rent. Faced with those numbers, a fund with a choice of countries will look at Lisbon or Athens first.
Then there's the small owner, who gets less attention. Most property owners in Spain are ordinary people with a flat or two, a point the Catalan party Junts has made all week. Picture a retired couple in Valencia who rent out one flat to top up their pension.
Under the new rules, taking that flat back after 5 years costs them a year's market rent. And if their tenant falls on hard times with no other home, the eviction shield protects the tenant until 2030. The state compensates the owner, but on the state's schedule.
A couple in that spot has 2 sensible moves. They can sell to a buyer who plans to live there, or they can leave the flat empty between tenants. In both cases, the number of flats for rent goes down by one.
The strongest objection is the obvious one: An 87-year-old on a stretcher looks like a market failure. That's a fair reaction, and nobody wants to see that picture again.
But her story points the other way once you look at the dates. Her family paid a capped rent for decades, which hid the gap between her rent and the market price. That gap came due all at once when Urbagestión bought the property in 2018 and raised the rent to €1,650, more than her pension.
In the end, a private deal fixed it. Within a week of the eviction, the company agreed to let her return at €533 a month, about 30% of her income.
What the Spain Housing Law 2026 Means for Buyers
I own property in Medellín, and its value doubled in 3 years. Part of that came from a country that welcomed foreign money. So when a government starts to tell investors what they can buy and what they can charge, I pay attention.
If you're buying a home to live in, the decrees barely affect you. Individuals face no new purchase limits, and Spain remains one of the most pleasant places in Europe to retire.
The picture changes if you plan to rent the flat out long-term. Take an 80 m² flat in Barcelona. At Idealista's average of €23.80 per m², it rents for about €1,904 a month.
Now say you sign a lease in 2026. Under the second decree, that lease renews by default after 5 years, which takes it to 2036. To get the flat back in 2031, you give 6 months' notice and pay 12 months' rent for a similar property, so about €22,848. That's roughly the price of a decent used pickup truck back home.
The formula also uses market rent for a similar flat. After a few years of 2% caps, your tenant may pay well under market, so the exit check can come out larger than a full year of the rent you collect.
Holiday lets on the coast face higher costs too. Every booking under a month now pays 10% IVA, and town halls can add up to 50% to the IBI property tax, or 100% for owners with 4 or more tourist flats. Meanwhile, the housing minister has asked regional governments to shut down illegal tourist flats.
Some buyers also assume a flat in Spain comes with residency. That route closed in April 2025, when Spain ended its golden visa for new applicants. Today, most Americans who move to Spain use the Non-Lucrative Visa for passive income or the Digital Nomad Visa for remote work.
What Happens Next with the Decrees
Everything above depends on a vote. Pedro Sánchez's coalition lacks a majority in Congress, and in April right-leaning parties blocked an earlier decree that would have rolled over leases. The government has asked for a special session on Friday, October 2, although the legal deadline is 30 days from publication.
Even so, the 2 decrees face different odds. The government put the automatic renewal in a separate decree, reportedly so a fight over that one clause could play out apart from the rest of the package. Junts and the Basque party PNV asked for state compensation for owners, and the first decree now includes it.
As a result, the second decree looks like the weaker of the 2. It saw less negotiation, so the €22,848 exit payment is the measure most likely to fail.
If you own a flat in Spain or plan to buy one this year, get in touch with us before you sign or renew a lease. This article is general commentary, with no legal or tax advice in it.
How Spain Compares with Greece, Portugal and Italy
Spain's neighbors face the same rent pressure, and they chose different tools. Portugal cut the tax on owners who rent long-term. Greece and Italy, meanwhile, aimed their new rules at short lets.
| Country | Latest move | Effect on a long-term owner |
|---|---|---|
| Spain | Eviction shield to 2030 and automatic 5-year lease renewal with a 12-month exit payment | Lower return and a tenant for up to 10 years |
| Portugal | From January 2026, tax on rent drops from 25% to 10% for leases up to €2,300 a month, and to 0% for rents 20% below the local median (details). Updates on existing leases capped at 2.24% for 2026 | Higher net yield |
| Greece | No new short-let registrations in 3 central Athens districts through 31 Dec 2026. Existing licences continue (details) | No change |
| Italy | 2026 budget: Short-let flat tax of 21% on the first property, 26% on the second, and business status from the third (details) | No change |
FAQ
Does Spain's 2026 Housing Law Ban All Evictions?
No. It protects vulnerable tenants with no other home until 31 December 2030, and the state pays the owner compensation while a court pauses the eviction.
Can Americans Buy Property in Spain in 2026?
Yes. The new purchase limit applies to companies and funds that pay under 70% of assessed value. An individual buying a home faces no new purchase rule.
How Much Does It Cost an Owner to End a Lease in Spain Under the New Rules?
After the first 5 years, the owner gives 6 months' notice and pays 12 months' rent for a similar property, unless the owner or a relative needs the home. Congress has to approve this rule within 30 days.
Is There a New Tax on Tourist Rentals in Spain?
Yes. Lets under 1 month now pay 10% IVA, and town halls can add up to 50% to IBI property tax, or 100% for owners with 4 or more tourist units.
Does Buying Property in Spain Give You Residency?
No. Spain closed its golden visa to new applicants in April 2025. Most Americans now apply for the Non-Lucrative Visa or the Digital Nomad Visa.
When Does Spain's Congress Vote on the Housing Decrees?
The government asked for a special session on Friday, October 2, 2026. The legal deadline is 30 days from publication in the BOE.
