Spain's Council of Ministers has approved a new package of housing measures covering rental contracts, evictions, seasonal and room rentals, property investment, tourist accommodation and taxation.

The measures were approved on September 29, 2026, through two separate real decree-laws. The larger housing decree has since been published in the Official State Gazette and is generally due to enter into force on October 1. A second decree dealing specifically with the automatic renewal of habitual rental contracts was approved separately and was still awaiting publication as of September 30.

The changes are national measures, but they are particularly relevant in Ibiza and Formentera, where pressure on the residential rental market has become a prominent local issue. Courts in Ibiza and Formentera had opened 286 eviction proceedings between January and late September 2026, according to figures cited by local judicial sources.

Here are the main measures and what the published rules actually provide.

1. Some Existing Rental Contracts Can Be Extended for Two More Years

Tenants with habitual rental contracts whose mandatory extension period ends before December 31, 2028 can request an extraordinary extension of up to two additional years.

The extension is not automatic. The tenant has to request it and, where the legal conditions are met, the landlord must accept it.

The existing terms and conditions of the contract remain in place during the extraordinary extension, subject to the provisions of the decree. Exceptions include certain circumstances such as an agreed renewal or a properly established need for the landlord or qualifying family members to recover the property.

The measure is therefore different from a blanket extension of every rental contract in Spain.

2. Rent Increases Are Limited, But This Is Not a Universal 0% Freeze

One of the most important points for tenants concerns annual rent updates.

For rental updates falling between the decree's entry into force and December 31, 2027, the rules distinguish between different circumstances.

Where the existing rent is above the applicable maximum price under the reference system, no increase can be applied.

In other cases, the landlord and tenant can agree an increase. If they do not reach a new agreement, the increase cannot exceed 2%.

This is why it would be misleading to simply describe the measure as a universal rent freeze at 0%.

The published legal text establishes a 0% increase in the specific case where the rent is already above the applicable maximum reference price, while otherwise setting a 2% ceiling where no new agreement is reached.

3. Seasonal Rentals Must Have a Genuine Temporary Reason

The decree introduces a more detailed framework for temporary housing contracts.

A temporary rental must have a real and demonstrable reason explaining why the tenant needs housing temporarily away from their normal residence.

The reason must be expressly stated in the contract, and the landlord carries the burden of proving that the temporary basis actually exists.

The contract must generally last more than 31 days and may not normally exceed 12 months.

If a temporary contract goes beyond 12 months without an adequately justified temporary reason, or if more than two consecutive temporary contracts are successively used between the same parties for the same property, the first contract can be treated as a habitual housing rental.

This measure is particularly relevant to markets such as Ibiza, where seasonal and temporary accommodation forms a significant part of the rental landscape.

The decree also expressly preserves the ability of autonomous communities to apply their own regulations in this area.

4. Room Rentals Will Also Be Subject to New Rules

The new framework specifically addresses rentals by individual rooms or parts of a property.

The combined rent charged for all the rooms in a property cannot exceed the amount that could be charged for renting the entire home under the applicable rules.

Tenants renting rooms also receive protections associated with habitual residential rentals, including rules concerning guarantees and other contractual safeguards.

The government says the objective is to prevent contractual structures from being used to bypass residential rental protections.

For Ibiza and Formentera, this is particularly significant because room rentals have become an increasingly visible part of the housing market, although the practical application will also depend on the regulations in force in the Balearic Islands.

5. Protection Against Certain Evictions Is Extended to 2030

The new rules extend protection against eviction until December 31, 2030 in defined cases involving vulnerable people who do not have an alternative home.

This does not mean that every eviction in Spain is automatically prohibited until 2030.

The published law specifies particular circumstances, including cases in which the claimant falls within categories covered by the new legislation concerning entities acquiring properties or portfolios of unpaid mortgage loans below market value.

The decree also introduces an extraordinary mechanism known as enervación in certain rent-arrears cases.

Where the required conditions exist and an alternative home has not been offered by the relevant autonomous authority, the new system can prevent the launch from going ahead and keep the rental relationship in place while the legally defined vulnerability continues.

The precise legal conditions therefore matter, and the measure should not be reported as a blanket ban on evictions.

6. Certain Speculative Property Purchases Are Restricted Until 2028

The decree introduces a temporary restriction on certain purchases of residential property.

From its entry into force until December 31, 2028, entities whose corporate purpose includes acquiring property are restricted from acquiring certain homes for a price below 70% of the property's market appraisal value.

The rule includes a number of exceptions, including purchases intended for affordable or social housing and certain other specifically defined purposes.

The legal wording is broader than simply referring to traditional investment funds, although the measure is aimed at acquisitions considered speculative under the conditions defined in the decree.

This provision is also time-limited and runs until the end of 2028.

7. Tourist Rentals: The Published VAT Measure Is 10%, Not 21%

This is one area where the simplified summary circulating from the original report needs correction.

The published decree establishes a specific VAT regime for qualifying furnished apartment or housing rentals under defined conditions.

The new provisions bring certain rentals into the reduced 10% VAT rate, with the changes taking effect from December 1, 2026. The rules cover circumstances including stays of no more than 30 nights and distinguish accommodation from the landlord's habitual home, as well as rentals where hotel-style supplementary services are provided.

The BOE therefore does not support describing this measure simply as a new 21% VAT rate on tourist apartments.

The exact VAT treatment depends on the characteristics of the accommodation and the legal conditions set out in the legislation.

8. New Tax Incentives Aim to Encourage Residential Renting

The package also changes taxation for landlords and prospective homeowners.

The decree introduces new IRPF reductions in several circumstances connected with renting homes, including situations where landlords reduce the rent compared with the previous contract, rent out a property for the first time under the specified conditions, rent to public administrations or qualifying non-profit organisations at affordable rates, or have recently carried out qualifying rehabilitation works.

The package also includes a new financing mechanism known as TU CASA for people purchasing their first habitual home.

Under the published framework, the complementary loan can cover the lesser of 20% of the home's value or €50,000, with zero interest and no commission, subject to the requirements established in the legislation.

These provisions are different from direct grants and should not be described as an automatic payment available to every first-time buyer.

9. SOCIMI Taxation Changes

The decree changes the special tax treatment of SOCIMIs, the listed property investment companies used extensively in the Spanish real-estate market.

It establishes a 25% special tax on certain undistributed profits generated from residential rental or use activity.

The legislation also provides reductions in that charge when a sufficiently large proportion of a SOCIMI's residential portfolio is dedicated to affordable rental housing and other conditions are met.

The measure is intended to change the financial incentives surrounding residential rental investment.

10. Municipalities Get More Scope to Apply IBI Charges to Certain Properties

The decree also changes the rules governing IBI, Spain's property tax.

The measure does not simply allow municipalities to double the IBI of every home that has been empty for three years.

Instead, municipalities can establish surcharges under defined conditions through their tax ordinances.

For certain permanently vacant residential properties owned by people or entities with multiple residential properties, the surcharge can reach 50%, while the potential surcharge can rise to 100% when the property has remained empty for more than three years. Additional increases of up to 50 percentage points are possible in certain circumstances.

The rules also introduce specific possibilities for surcharges on residential properties used as tourist accommodation in municipalities located in officially designated stressed residential-market areas.

Those tourist-use surcharges can reach 50%, 100% or 150%, depending on the number of residential properties held by the owner, and must be established by the municipality through an applicable tax ordinance.

This distinction is important for Ibiza because a national legal power to impose a surcharge does not mean that the municipality of Ibiza or another Balearic municipality automatically applies it.

A Separate Decree Would Change Rental Renewals

Alongside the larger housing decree, the Council of Ministers also approved a separate real decree-law designed to reinforce the stability of habitual rental contracts.

The measure would introduce an automatic renewal system after the mandatory five-year period for individual landlords or seven-year period for companies, with further annual extensions subject to the new rules.

Reporting on the approved text indicates that landlords wishing to prevent renewal without a legally justified reason would face an obligation to compensate the tenant, potentially with a payment equivalent to at least 12 months of rent. Specific exceptions would apply.

This second decree was kept separate from the broader housing package and, as of September 30, had not yet been published in the BOE. It therefore needs to be kept distinct from the provisions already published in the main decree.

What Happens Next?

Although a real decree-law has immediate legal force once published, it still has to be submitted to Congress for convalidation.

The government has scheduled an extraordinary parliamentary debate and vote for October 2, according to current reporting. The two housing measures are being treated separately, meaning the automatic-renewal measure faces a separate parliamentary process from the main housing decree.

Until that parliamentary process is completed, the long-term status of the measures is not the same as that of an ordinary law that has passed through the full legislative process.

Why This Matters for Ibiza

The national package arrives as housing remains a major issue in Ibiza and Formentera.

Around 300 people took part in a September 27 demonstration in Vara de Rey organised by the Sindicato de Inquilinas de Ibiza y Formentera following the eviction of an 87-year-old woman in Madrid. The organisers used the event to call for stronger rental and housing protections on the islands. Those figures and demands belong to the organisers and should be understood as part of the local political and social debate rather than as an official measurement of the housing situation.

The new measures could have relevance for several parts of the Pitiusan housing market, particularly habitual rentals, room rentals, temporary contracts and certain types of property investment.

However, the practical effect in Ibiza will depend on the interaction between the national measures, Balearic housing regulations, municipal rules and the specific circumstances of individual properties and contracts.

The Key Point for Renters and Landlords

The package is broader than a simple rent freeze or eviction ban.

It introduces temporary protections, new rules for seasonal and room rentals, restrictions on certain property acquisitions, changes to taxation and a separate proposal for stronger automatic rental renewals.

For Ibiza, the most immediately relevant areas are likely to be the rules governing habitual rental contracts, temporary accommodation, room rentals and the treatment of properties used for tourism.

The legislation is now entering a new phase, with the published decree taking effect according to its individual commencement rules and parliamentary convalidation still to come.