Madrid: The government of Spain plans to tighten rental regulations and limit medium-term leases in a bid to control soaring rents and prevent price abuse, Prime Minister Pedro Sanchez announced.
The measures come as Spain, one of the world’s top tourist destinations, faces a severe housing shortage, worsened by a booming tourism sector. Mass protests have erupted in recent years over rising housing costs.
Speaking at the launch of Spain’s largest public housing project, Sanchez said the government would continue intervening in the rental market. The Campamento project will convert a former military site in western Madrid into 10,700 state-owned, affordable homes.
The upcoming decree will offer landlords a full personal income tax rebate if they renew leases without raising rents. It will also cap combined room rents at the equivalent of a full apartment, tighten rules for seasonal rentals, and introduce sanctions for using short-term contracts as a substitute for long-term leases.
Experts and homeowners’ associations say current regulations favor short-term leases over stable, long-term rentals. Enforcement, however, depends on Spain’s regional governments, some of which are run by opposition parties and may resist implementing the new rules.
Some regions and cities have already acted independently. Catalonia has set ceilings for seasonal and room rents, while Madrid and other cities have limited tourist apartment rentals.
Rents across Spain have doubled over the past decade, far outpacing wage growth. According to the Bank of Spain, the country faces a housing deficit of 500,000 homes, with only about 120,000 new homes built annually- a fraction of pre-2008 levels.
