Spain’s Law on Urban Rentals (Ley de Arrendamientos Urbanos, LAU) is the legal framework governing residential and commercial leases. The 2024 Housing Act (Ley de Vivienda) introduced material changes for landlords, particularly around stress zones, rent control, eviction protections for vulnerable tenants, and the 90% income reduction for residents who let long-term in qualifying conditions.
This guide reviews what landlords in 2026 must know — both about contracts running under the existing framework and about the structural shifts that will continue to play out.
The Stress Zone Concept
The 2024 Housing Act introduced “stressed residential zones” (zonas de mercado residencial tensionado) — areas declared by autonomous communities or municipalities where rent prices have risen disproportionately to local incomes. In stress zones, large landlords face caps on permitted rent increases, and small landlords may also face reference-rent guidance. The declaration of stress zones is at autonomous community discretion — Catalonia has actively declared zones, Madrid has not. Verify the status of your specific area before pricing a new contract.
The 90% Reduction for Long-Term Residential Lets
For Spanish-resident landlords letting long-term to a habitual tenant, the 2024 Housing Act introduced a deduction of up to 90% of net rental income against IRPF — a dramatic increase from the previous 60%. The exact percentage depends on the rental zone classification, whether the rent has been stabilised below reference-rent guidance, and tenant profile (e.g. higher percentages for tenants in vulnerable categories or under 35). Tourist letting (VFT in Andalusia) does not qualify for the reduction.
Eviction Protections — Slower and Document-Heavy
Eviction proceedings (desahucio) for non-payment have become procedurally heavier since 2024. Courts now require demonstration of mediation attempts and screening of tenant vulnerability (presence of minors, dependents, severe economic distress) before scheduling the eviction. For vulnerable tenants, the eviction can be suspended for up to 24 months while a social-housing alternative is sought. Landlords retain the right to recover rent and damages, but the timeline has materially extended. Insurance products covering rental default and legal costs have become correspondingly more important.
Contract Term and Renewal
The LAU sets minimum terms for residential leases. The default residential lease is for one year but the tenant has a statutory right to extension up to five years (seven if the landlord is a corporate entity), unless the landlord meets specific exception criteria such as need for own occupation. The annual rent update is capped to a reference index (the IPC has been replaced by a new IPC-based index for 2024 onwards, with stress-zone overrides). Always state the index basis and renewal mechanics explicitly in the contract.
Frequently Asked Questions
Does my pre-2024 contract change automatically?
No — the LAU reforms apply primarily to contracts signed after the law’s entry into force. Existing contracts continue under their original terms until they expire, although certain protections (e.g. stress-zone caps on increases) may apply on annual updates within their term.
What counts as a large landlord?
Large landlords (grandes tenedores) are defined as natural or legal persons owning more than five urban residential properties or, in some declarations, more than ten properties of any kind. Stress-zone caps and procedural eviction protections apply more strictly to large landlords.
Can I switch a residential let to tourist?
Subject to local rules and community-of-owners restrictions. Tourist conversion may require a VFT registration in Andalusia (or local equivalent), and many communities of owners have voted to prohibit tourist use within the building.
Disclaimer: This information is provided for general guidance purposes only and does not constitute personalised tax or legal advice. Each case must be assessed individually according to the client’s specific circumstances. It is essential to consult a qualified specialist before taking any action or making any decision.Related 2026 guides
Reviewed by: Maria Luisa de Castro, Expert in Off-plan Property Investment, CostaLuz Lawyers. Last updated: May 2026.
The 2026 LAU updates changed several landlord obligations — see our separate guide to the legal deposit rules themselves.
Holiday rentals sit outside the LAU updates entirely — see our guide to what a compliant holiday rental contract needs.
This content has been prepared with the assistance of artificial intelligence and reviewed by María Luisa de Castro, a lawyer specialising in Real Estate Law and founder of CostaLuz Lawyers.
The information provided is general and indicative in nature. It should not be used as the sole basis for making professional, legal or investment decisions, and CostaLuz Lawyers assumes no responsibility for decisions taken solely on the basis of this content.
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