What you need to know about Spain’s 2018 rent law changes

Essential reading for anyone letting out or renting a property in Spain in 2018.

What you need to know about Spain's 2018 rent law changes
Photo: Jocelyn Erskine-Kellie/Flickr

Spain has just unveiled a new set of rental changes which give homeowners greater veto powers against holiday home rentals and offer extra security for tenants, but still don't solve the issue of rising rent prices in much of the country.

No price cap

Spain’s cabinet has decided against fixing rents in cities and neighbourhoods where prices have spiraled out of control, under the pretext that the country’s Ministry of Economic Development needs more property market data before taking such a measure.

“We agreed during budgetary pact that we had to control rent prices to lower rents,” left-wing alliance leader Pablo Iglesias tweeted following the announcement.

“If the government doesn’t comply with our agreement we’ll vote against the decree.”

The recent leap in rents comes as Spain is still reeling from a devastating economic crisis that kicked off in 2008 when a housing bubble burst, leading to the eviction of thousands of indebted families who had bought their homes on credit.

FIND OUT: Why rising rents across Spain are causing a new crisis

Longer leases

Average tenancy contracts will go from being three to five years long, or seven years in cases where the lessor is a legal entity. It’s a measure meant to give greater security to the tenant, but the measure, as is the case with all others, isn’t retroactive.

In cases where the rental agreement expires and neither the lessor nor the lessee make their intentions vis-à-vis the property known, the implicit renewal of the tenancy agreement (known as plazo de prórroga tácita in Spanish) will now be of three years rather than one.

Maximum two-month’s deposit

Landlords will no longer be able to ask their tenants for anything more than two months of rent as a deposit, unless the tenancy contract is longer than the now five years standard length.

The same applies to any bank guarantee required from the tenant when signing their rental agreement.

Lessors who are legal entities or companies will now also have to cover all agency and contract costs by law (gastos de gestión inmobiliaria y de formalización del contrato).

According to the decree it will now also be easier for lessor and lessee to reach an agreement to revamp or improve the dwelling before the end of the tenancy contract. 

READ ALSO: Five things nobody tells you about renting a property in Spain

Neighbourhood protection against holiday rentals

This change to Spain’s Ley sobre Propiedad Horizontal – the legal code overseeing the regulation of apartment buildings – will allow property owners to decide whether or not to allow short-term holiday rentals in their buildings by calling a vote.

For homestay portals such as Airbnb to be able to operate in any given building, three quarters of the owners that make up a homeowners’/residents’ association will have to approve their entry.

The same ratio will be needed to increase any levees meant to cater for short-term holiday rentals in their building. The measure is again not retroactive so can’t apply to any properties currently being rented out for short stays.

Some tax breaks

Property owners and tenants who register their tenancy contract properly will be exempt from paying property transfer tax and stamp duties (Impuesto de Transmisiones Patrimoniales y el de Actos Jurídicos Documentados ) if the dwelling is for stable and permanent use.

Tenants in social housing won't have to pay council tax anymore and councils with financial surpluses can now use such funds for social housing.

There'll be a reduction in costs short term tenants and property owners who leave properties unoccupied will have to pay more council tax, the Impuesto de Bienes Inmuebles (IBI).

RENTING PROPERTY IN SPAIN – Know your rights as a tenant



For members


REVEALED: The cheapest most in-demand areas in Spain to buy a house

If you're considering making the move and buying property in Spain, but don't fancy purchasing in a rural village in the middle of nowhere, you should know where the cheapest, most in-demand parts of the country are.

REVEALED: The cheapest most in-demand areas in Spain to buy a house

If you’re thinking about relocating, Spain is a fantastic place to do it. Foreigners have been moving to Spain for decades, not only for its fantastic food and weather, along with a laid-back lifestyle, but housing is generally affordable – if you know where to look.

Though the rise in the Euribor has sent interest rates spiking, house prices in Spain are expected to flatten somewhat in 2023 and it could be a good year to find a bargain, depending on your financial situation.

Knowing what type of house you want and where in Spain you want to live is one thing, but knowing the cheapest, yet most in-demand parts of the country could really help you narrow down your search.

Fortunately, Spain’s leading property website Idealista has put together a list of the most ‘in demand’ municipalities of Spain and where you can find the most expensive and, more importantly for the house hunters among us, the cheapest municipalities of Spain to buy property.

It’s based on data from the last quarter of 2022 and is the average price of housing in towns with more than 1,300 sale announcements and costs valued at more than €1,100 per square metre. 

You can find the ten cheapest areas of Spain to buy property by average price below, but it’s worth noting that Idealista did these rankings by average price across the entire municipality, so there are likely individual towns and villages dotted around Spain where prices are significantly lower.

That said, this list gives you a good idea of the areas to look out for.

READ ALSO:  What will happen with property prices in Spain in 2023?

The 10 cheapest municipalities in Spain to buy property 

Santa Pola (Alicante) – Santa Pola, in the Alicante province, is the cheapest most in-demand municipality to buy a house, according to Idealista’s rankings. The average price for a house in Santa Pola costs just €151,796, though this may come as a surprise given its prime location in a foreign hotspot on the sought-after Costa Blanca. The main town of Santa Pola itself is a small beachfront community with a population of around 35,000. It also has a large foreign population and is a short drive or bus away from both Alicante and Elche.

Ourense (Galicia) – Next on the list is Ourense in Galicia where the average price is €154,941. The municipality is home to several towns and villages, surrounding the main medium-sized town of Ourense itself in southern Galicia. The town has a population of around 105,000 and is a little over an hour’s drive from both Santiago de Compostela and the coastal city of Pontevedra.

Oviedo (Asturias) – Third on the list is the municipality of Oviedo where you’ll pay an average of €154,968 for a property. Another area in northern Spain, the main city Oviedo itself, which is the capital of Asturias and has a population of 220,000. It sits between Cantabrian mountains and the Bay of Biscay. It’s known for its picturesque medieval old town and impressive architecture. 

Jerez de la Frontera (Cádiz) – Properties cost an average of €155,563 in the municipality of Jerez de la Frontera, or Jerez as it’s commonly referred to. It’s located in the Cádiz province of Andalusia and is a real piece of ‘traditional’ Spain. Jerez city is a decent-sized place with a little over 200,000 people and is known for horses, flamenco dancing and sherry, as well as the Alcázar de Jerez, an 11th-century fortress that harks back to Andalusia’s Moorish past.

READ ALSO: Is it better to buy or rent in Spain right now?

Torrevieja (Alicante) – Another municipality in Alicante and another incredibly popular with foreign homeowners. Properties here go for an average of €155,787. Torrevieja itself has a population of 82,000 and is another coastal town, but also has nature trails and salt plains nearby.

Murcia (Murcia) – Murcia is often overlooked, wedged between Alicante and Andalusia, but you could grab a bargain here with average prices of €157,119. Murcia capital is a bustling city of almost 450,000 people, and is strategically placed for trips to the Costa Blanca, Costa Calida, Costa del Sol, and Costa de Almeria.

Parla (Madrid) – The municipality of Parla lies just 20km south of Madrid and the town of the same name is home to 130,000 residents. It’s a great commuter area for those who work in Getafe or the capital. A house here costs an average of €160,652. 

Salamanca (Castilla y León) – The municipality of Salamanca surrounds the capital of Salamanca in Castilla y León in northwestern Spain. Buying a property in this area costs an average of €162,909. The main city of Salamanca is known for its university, which is the oldest in Spain and dates back to 1218. Understandably, much of Salamanca’s roughly 150,000 residents are students, which gives the town a lively atmosphere.

Burgos (Castilla y León) – Another northwestern Castilla y León municipality, is Burgos has around, where you can buy a house for just €163,164. The city of Burgos has around 180,000 inhabitants and is known for its medieval architecture and grand cathedral. 

Dos Hermanas (Sevilla) – The second most populous municipality in the province of Seville, properties cost an average of €163.274 here. The Andalusian town is just 15km south of Seville, making it great for commuters or those who want plenty of culture nearby.