PRIME Minister Pedro Sanchez has announced ‘urgent and decisive’ measures to address Spain’s deepening housing shortage.
Landlords who extend long-term rental contracts without increasing rents will in future be granted a full 100% tax exemption on the related rental income.
Sanchez spoke on Monday at the inauguration of the public housing Campamento project on a former military site in Madrid, where 10,700 new homes are to be built.
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The government will also crack down on fraud and abuse in rental contracts.
Around three million households live in rented accommodation in Spain, according to the Ministry of Housing.
“We will continue intervening in the rental market,” Sanchez.
“Tenants win because they can stay in their home at no extra cost, while owners win because they don’t have to look for replacements,” he added.
“The State also wins because we assume our responsibility of using public resources for the well-being of the people.”
The centrepiece of the new initiative is the tighter regulation of tourist and short-term rentals, which Sanchez said have distorted local housing markets.
The measures are intended to prevent the abusive practice of reclassifying standard rental agreements as temporary leases.
Measures will also be introduced to curb abuses in room rentals.
It would set a limit for combined room rents at the level of a full apartment to rein in room rentals and apply rent controls in designated high-pressure areas.
In addition, the government would also tighten conditions for seasonal rental contracts and introduce sanctions for their use as a substitute for long-term leases, Sanchez said.
The changes will come into force via a Royal decree ‘within a few weeks’.
The Bank of Spain recently estimated the country’s housing deficit at around 700,000 units, which is 100,000 more than in its 2024 estimate.
One of the world’s most-visited countries by tourists, Spain suffers from a severe housing shortage exacerbated by a tourism boom, and has faced mass protests undefined in the past years over soaring housing costs.
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