Due to the current housing crisis in Spain, renting a property here is becoming more challenging.
Landlords and agencies are asking for many more requirements and assurances, such as a contract from a Spanish company, guarantors and background checks.
Often you may have to offer the landlord several months’ rent in front in order to secure a property.
But, can a landlord also force you to pay the rent in cash as opposed to via online transfer?
READ ALSO: Can I pay several months of rent in Spain to prove I'm solvent?
There may be several reasons landlords request you pay in cash, either because they live in a rural area of Spain without much access to cash machines, they are elderly and don’t understand online banking, or because they don’t want to declare the correct amount of rental income to the tax authorities.
Paying rent in cash may have been commonplace in the past, but since Spain’s new Ley de Vivienda or Housing Law came into force in 2023, it is not actually allowed.
According to the new law, it is no longer legal for renters to pay landlords in cash. The legislation now states that the rent must be paid “by electronic means”.
This means you can’t simply put cash in an envelope and give it to your landlord, it has to be a bank transfer with a digital footprint where there is proof. This could be through an electronic payment such as a bank transfer, direct debit or even Bizum.
READ ALSO: Why you probably need the Bizum payment app for life in Spain
The only exception to the rule is when either renter or landlord “does not have a bank account or access to electronic payment means” according to the law.
In this case they may still request it from you in cash, but these days it’s unlikely that this is the case.
The law made Spain the first eurozone country to ban rental payments in cash.
One of the main reasons why it was changed was to ensure transparency in the real estate sector. Until now, there was a loophole that allowed non-compliance with the anti-fraud law.
This was brought in in 2021 and limited cash payments to €1,000. Rents that did not exceed this amount could be made in cash, but it also meant that fraud and other illegalities could also take place.
If Spain's Tax Agency detects transactions of more than €1,000 in cash, you could be fined up to 25 percent, so it would be totally unfair if you had to pay more than this in cash for your rent and were then sanctioned for it.
Another important part of the Ley de Viviendas is that the rent payment must be monthly and must be made within the first seven days of the month.
In return, a receipt must be received and reflect the amounts paid for each purpose – ie rent and bills. This is easier to get if there is a digital footprint.
The law also states that if the owner does not provide the relevant receipt, the tenant will be responsible for any expenses incurred to record this payment, so it’s against your interest to pay in cash.
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