More has changed around Spain’s rental rules in the past two weeks than in the previous two years combined. On 2 October, parliament voted down two of the government’s housing decrees. A few days later, the government approved almost the same rules again, and on 16 October it will be decided whether they stay in force.

Over the past few days, many owners and tenants have asked me: “Kata, so what actually applies now?” In this article I’ll try to explain clearly what happened and what it means for you.

What was in the rejected decrees?

The two decrees (RDL 26/2026 and 27/2026) were published in the Official State Gazette on 30 September and 1 October. On 2 October, parliament rejected both, by 178 votes to 172 and 184 to 166.

Among other things, the first decree included:

• an extraordinary two-year extension for rental contracts expiring before the end of 2028, provided the tenant is up to date with payments;
• a maximum annual rent increase of 2% on existing contracts until the end of 2027;
• a suspension of evictions of vulnerable families until the end of 2030;
• 10% VAT on holiday rentals, which were previously VAT-exempt;
• new rules for seasonal and room rentals;
• the option for councils to charge higher property tax (IBI) on holiday lets and long-term empty homes;
• a ban on investment funds buying below 70% of appraised value.

The second decree was about contract renewals: a landlord could only refuse to renew with a justified reason, such as needing the home for themselves or a family member. Refusing without a reason would have meant paying the tenant compensation equal to 12 months’ rent.

Why did they fail, and what has happened since?

The deciding votes came from the seven MPs of the Catalan party Junts. They argued that the decrees lumped small landlords who live off rental income together with large property companies. PP and Vox also voted against.

After that, things moved fast:

• 5 October: Prime Minister Pedro Sánchez dissolved parliament and called a snap general election for 29 November.
• 7 October: the government reissued the decrees with minor changes. The first one (RDL 29/2026) came into force on 8 October.
• 16 October: parliament’s standing committee (Diputación Permanente) votes on whether the decrees stay in force. If they aren’t approved, they lapse.

This 69-member committee acts in place of the dissolved parliament, and its make-up differs from the full chamber’s, so a decree can pass here even without Junts’ votes. The first decree is more likely to pass. The second, on contract extensions, is less certain because the Basque PNV doesn’t support it either. Legal experts are also divided on whether a decree rejected by the full chamber can be resubmitted this way.

What does this mean for you on the Costa Blanca?

The new decree now in force (RDL 29/2026) contains broadly the same measures as the rejected one. If it’s approved, this is what to expect:

If you let long-term:

• for contracts expiring before the end of 2028, tenants can request a one-year extension, followed by another year, and up to three years in “stressed” housing areas (zonas tensionadas);
• until the end of 2027, rent can rise by at most 2% if it’s below the official reference index, and not at all if it’s above it;
• for contracts signed from 1 December, tenants can leave from the sixth month with 30 days’ notice, and property tax (IBI) and the rubbish collection fee can’t be passed on to them.

If you let seasonally or to holidaymakers:

• seasonal contracts can last no longer than 12 months;
• holiday rentals may be charged 10% VAT from 1 December, the same as hotels;
• in stressed areas, councils can raise property tax by up to 150%.

If you’re thinking of buying: if you’re buying a home for yourself, these rules barely affect you. But if you’re counting on rental income for your return, you’ll need to do the maths differently than you would have a year ago.

Important: these rules may still change depending on the vote and on the 29 November election. We’ll update this article once the outcome is known.

Honestly: what do I advise right now?

There’s no need to panic, and no need to rush anything. The rules may still shift over the coming weeks, so right now I recommend calm, careful preparation:

• If you let out property: review your existing contracts, expiry dates and rents. If you have a holiday rental, check that all your licences are in order.
• If you’re planning to buy: don’t base your decision on a single decree, but on how you want to use your home. If letting is part of the plan, let’s work through a few scenarios together.
• If you’re still just thinking about it: it’s fine to wait for the 29 November election. The market won’t run away in that time.

I know all this can feel chaotic at first in a foreign country, especially if you don’t read the news in Spanish. That’s what we’re here for. If you’re unsure what these changes mean for your property or your plans, write to me, or let’s sit down for a coffee, in person or online.

– Kata and the Molino Villas team

Sources:

• idealista
• The Local
• Civio
• Qué!
• Maldita