The Spanish government announces a tax break for landlords who do not raise rents.

MadridThe Spanish government is starting the year by focusing on housing, and in particular, rental housing. In fact, it already did so in January 2025, when it announced a package of measures to mobilize affordable rentals in the StateOn Monday, Spanish Prime Minister Pedro Sánchez announced three proposals to "further intervene in the rental market" in Spain. The measures will be included in a royal decree-law to be approved "in the coming weeks," said Sánchez, who assured that they will benefit "the three million households that rent in Spain." But before the proposals can be implemented, Sánchez will have to reach an agreement with the junior partner in the coalition government, Sumar, which has already rejected one of the measures. Specifically, the proposal to reinstate tax breaks for landlords. "Giving public money to landlords is a mistake," asserted Second Vice President and prominent figure of Sumar, Yolanda Díaz, via the social network BlueSky. Later, Sánchez expressed his "conviction" that an agreement could be reached. "We are going to work," said the head of the Spanish government when asked about Díaz's reaction.

Bonus up to 100% of the personal income tax

Let's take it one step at a time. To begin with, the central government is considering a tax break of up to 100% on income tax (IRPF) for rental income for landlords who do not raise their rent when the contract is up for renewal, whether in a high-demand area or not. "Everyone wins, landlords and tenants," Sánchez stated.

This measure, the details of which are not yet fully known, is similar to the one announced exactly a year ago. At that time, the proposal, which must be approved by the Ministry of Finance, was in line with the provisions of the state housing law for high-demand areas: that small landlords could receive a 90% income tax break if they reduced the rent by 5% compared to the last contract, or a 70% break if they offered a reduction. This would now be applied outside of high-demand areas and would be strengthened because the tax break could reach 100%, according to Sánchez.

This would provide a solution to the renewal, due in 2026, of the more than 600,000 contracts signed in the first year of the pandemic, when market prices were much lower than they are now, which could lead to a dramatic increase in rental prices. In fact, Sumar demanded that the PSOE approve an automatic extension of rental contracts that must be renewed in 2026, viewing the subsidy for landlords as an "ineffective," "unfair," and "inadequate" proposal, in the words of the Minister of Social Rights, Consumer Affairs, and Agenda 2030, Pablo Bustinduy. This ministry estimates that some 630,000 contracts, affecting 1.6 million people, are due for renewal this year.

Crusade against seasonal and room rentals

The second measure affects seasonal contracts. Sánchez announced that "stricter conditions will be established for a contract to be considered seasonal," although he did not provide details. He also anticipated the creation of a "sanctioning regime" for those who violate the state regulations on short-term rentals, although Congress is already processing a law that addresses this issue. In this regard, Catalonia has just passed its own law regulating this type of rental. It remains to be seen how Sánchez's announcement fits with the regulations. Catalan.

Finally, the third measure targets room rentals with the intention of "putting an end to their abusive use." The Spanish government proposes that the total rent for all rooms cannot exceed the rent for the entire property and that, in areas declared to be under housing pressure, the rent control mechanisms included in the state housing law for standard rentals will be applied to these types of contracts.

Processing in Congress

The decree of measures comes at a time when Sánchez is seeking to set the agenda with the government's management to reinforce the message of a legislature for two more years, that is, until the term expires in 2027. Despite the weakness in Congress –The relationship with the investiture blog is at its lowest point.—, Sánchez intends to push through measures that do not require the approval of the Spanish lower house.

Monday's decree, however, will have to go through Congress, and has already received criticism from parties like ERC and Podemos, in addition to rejection from Sumar. "Either legislation is passed to prevent speculation in housing, or the left is going to be in deep trouble," warned the Republican spokesperson in Congress, Gabriel Rufián. "The solution to the brutal housing crisis is more tax breaks for homeowners. Enough is enough," said the leader of the purple party, Ione Belarra, via the social network X.