Rental rules in Ibiza could change again in the coming weeks after the Spanish Government approved new versions of its housing decrees on Tuesday, October 6, just days after Congress rejected the original package.

The proposed measures could affect landlords and tenants across Ibiza, including contract extensions, rent updates, temporary rentals, room rentals, evictions and tax incentives for landlords who offer more affordable rents.

However, the changes are not yet in force.

The original housing package was approved by the Council of Ministers on September 29 but was rejected by Congress on October 2. Following the dissolution of Parliament and the calling of general elections for November 29, the Government has now approved replacement texts that it intends to take to the Diputación Permanente of Congress for approval.

What Could Change for Existing Rental Contracts?

One of the most significant proposals would allow certain tenants whose contracts reach specified expiry dates before December 31, 2028, to request an extraordinary extension of up to two additional years.

The extension would be requested in annual periods and would generally have to be accepted by the landlord if the tenant is up to date with rent payments and has maintained that position during the previous eight months.

The existing terms and conditions of the contract would continue during the extraordinary extension, subject to the exceptions established by the proposed legislation.

The measure is intended to provide additional stability for households whose rental contracts are approaching the end of their ordinary contractual protection.

It is important to stress that this proposed extension is not currently a new general right in force. It formed part of the earlier decree that was repealed after Congress rejected it and is now being brought back in a new legislative package.

Proposed Limits on Rent Updates

The Government is also seeking to reintroduce an extraordinary limitation on annual rent updates.

Under the original text, for annual updates falling between the entry into force of the measure and December 31, 2027, no increase would be permitted when the existing rent exceeded the applicable maximum under the state rental reference system.

Where the rent did not exceed that threshold, the landlord and tenant could reach their own agreement. Without an agreement, the increase would be capped at 2%.

The Government has indicated that the new package retains the core of these protections.

Again, these should currently be treated as proposed measures rather than rules already applicable to Ibiza rental contracts.

Temporary Rentals Could Face New Requirements

Another important area is the regulation of temporary accommodation.

The proposed legislation would require the reason for a temporary rental to be genuine and documented. As set out in the earlier text, temporary residential rentals would generally last more than 31 days and no more than 12 months, depending on the reason for the temporary stay.

If a supposed temporary arrangement continues beyond the permitted framework without a justified temporary cause, or if more than two consecutive temporary contracts are made between the same parties for the same property, the first contract could be treated as a normal residential rental under the proposed rules.

This could be particularly relevant in Ibiza, where the distinction between residential, seasonal and tourist accommodation is an important part of the housing debate.

Room Rentals Would Also Be Regulated

The proposed reforms would also introduce specific rules for rentals by rooms or parts of a property.

The combined rent from all rooms rented simultaneously in the same home could not exceed the amount that could be charged for renting the entire property under the applicable rules.

The legislation would also distinguish between residential and temporary room rentals and establish additional protections in areas officially declared to be residential pressure zones.

More Protection in Some Eviction Cases

The package also seeks to restore protections for vulnerable households facing eviction when they have no alternative accommodation.

The earlier decree established protections extending to December 31, 2030 in certain circumstances, including cases involving vulnerable occupants without alternative housing.

The new package retains the core of these protections, while the Government has announced additional measures relating to unpaid rent and the role of public authorities in preventing evictions when vulnerable households cannot pay.

These measures would not apply automatically to every eviction case. The legislation establishes specific conditions and exceptions.

Tax Incentives for Landlords

The proposed package also includes changes to the tax treatment of residential rentals.

For certain new rental contracts, landlords who reduce the rent by more than 5% could qualify for significantly higher income-tax reductions, depending on circumstances such as the location of the property, the tenant's age and whether the rent remains below the applicable reference threshold.

The previous proposal included reductions ranging from 50% to as much as 100% in specific circumstances.

The objective is to encourage owners to place homes on the long-term residential market at more affordable rents rather than simply increasing the regulatory obligations on landlords.

First-Home Financing Also Returns

The new package contains a separate measure aimed at people trying to buy their first home.

The Government has announced a €10 billion financing line, known as "Tu Casa", providing interest-free loans of up to €50,000 for first-home purchases. The mechanism is expected to be managed through the ICO.

The Government says the scheme is aimed at people and families who have sufficient income to support a mortgage but lack enough savings to cover the initial contribution.

This measure is separate from the proposed rental protections but forms part of the wider housing package approved on October 6.

What Happens Next?

The crucial question is now whether the new decrees obtain the required support in the Diputación Permanente.

The Cortes Generales have been dissolved following the decision to hold general elections on November 29. During the electoral period, the Diputación Permanente continues to exercise certain parliamentary functions, including considering royal decree-laws.

The body has 69 members. Current parliamentary arithmetic gives the Government-backed bloc a potential majority for the main housing decree, although the situation is more difficult for the separate decree dealing with automatic extensions of rental contracts.

The PNV's position is particularly important because it opposed the earlier automatic-rental-extension decree. Its position on the new texts will therefore be closely watched.

What This Means for Ibiza Right Now

For tenants and landlords in Ibiza, the most important point is that the proposed changes should not yet be treated as current law.

The original measures approved at the end of September were repealed after Congress rejected them on October 2. The Government has now attempted to revive the main housing measures through new texts, but those texts still require approval by the Diputación Permanente before the proposed changes can take effect.

Until that happens, existing rental legislation remains the applicable framework.

For Ibiza, where long-term rental supply and affordability remain major concerns, the outcome could have a significant impact on both landlords deciding whether to offer properties for residential rent and tenants approaching the end of their contracts.

The next decisive step will be the vote in the Diputación Permanente.