In January 2026, the Spanish Government announced a new fiscal incentive aimed at encouraging landlords to freeze rental prices when renewing residential lease agreements.
The measure proposes a 100% reduction in Personal Income Tax (IRPF) on net rental income for property owners who decide not to increase the rent upon renewal of residential leases.
Below, we explain how this tax relief works, who it applies to, its current legal status, and the conditions that are known so far, based on the official announcement and available information.
1.- What does the new tax relief consist of?
The announced measure increases the current 50% general IRPF reduction on residential rental income to 100%, provided that the landlord keeps the rent unchanged when the lease expires and is renewed.
In practical terms, this means that:
– The landlord would pay no IRPF at all on the net rental income from that property.
– The benefit applies only if the rent is frozen, with no increase at renewal.
– The aim is to compensate landlords for not applying a lawful rent increase.
This would represent a more generous tax incentive than those already introduced under Spain’s Housing Act (Law 12/2023), which currently allows reductions of:
– Up to 90% in specific cases (e.g. rent reductions in stressed housing areas),
– 70% or 60% in other scenarios,
– And a general 50% reduction for qualifying residential leases.
The proposed 100% exemption would override all existing reductions, fully exempting rental income from taxation for eligible landlords.
2.- Which rental contracts would this apply to?
The tax relief is intended to apply only to residential leases used as the tenant’s main home. It would not apply to:
– Tourist rentals,
– Short-term or seasonal rentals,
– Commercial leases or other non-residential uses.
The Government has specifically referred to leases expiring in 2026, many of which were signed during the COVID-19 period (2020–2021) under rent containment conditions.
According to official data, more than 630,000 residential leases signed during the pandemic will expire in 2026, potentially affecting over 1.6 million people. Without intervention, rent increases of 30% to 50% could occur in some cases.
The tax incentive aims to avoid this scenario by encouraging landlords to maintain stable rents voluntarily.
Renewal with the same tenant or new contracts?
At this stage, it has not been formally clarified whether the 100% tax relief will apply:
– Only to renewals with the same tenant, or
– Also to new leases with a different tenant, provided the rent remains unchanged.
Based on the wording of the announcement, the most likely interpretation is that the benefit will apply to renewals with the existing tenant, where the landlord chooses not to increase the rent.
In all cases, the property must qualify as the tenant’s primary residence under Spanish tax regulations.
3.- Is the measure already in force?
No. As of January 2026, the measure is not yet in force.
On 12 January 2026, the Prime Minister announced that the Government would approve a Royal Decree-Law introducing urgent housing measures, including this full IRPF tax exemption.
However:
– No Royal Decree-Law has yet been published in the Official State Gazette (BOE).
– The measure is therefore announced but not legally effective.
– Approval is expected in January or February 2026, subject to subsequent parliamentary validation.
Once approved and published, the measure would likely apply to rental income generated during 2026, to be declared in the 2026 income tax return filed in 2027, provided all conditions are met.
4.- Known requirements and conditions
Although the final legal text has not yet been published, the following requirements are expected:
- Rent freeze at renewal
The landlord must not increase the rent when the lease expires and is renewed. The rent in the renewed agreement must match the previous one exactly.
- Residential lease (main home)
The property must be used as the tenant’s habitual residence and be subject to Spain’s Urban Leases Act (LAU). The relief will not apply to temporary or tourist rentals.
- Temporal scope
The measure appears focused on renewals taking place in 2026, particularly those linked to pandemic-era contracts. The final regulation should define the exact time frame.
- Non-accumulation with other tax benefits
The 100% reduction will likely replace, not combine with, other IRPF rental reductions. A landlord cannot benefit from more than a 100% exemption.
- Evidence and tax control
Landlords will be required to retain documentation proving:
– The previous rent,
– The renewed contract,
– That no rent increase was applied.
Spanish tax authorities may verify that there are no hidden increases through other charges or mechanisms.
5.- Legislative status and official source
The measure was announced by the Prime Minister during a public event in Madrid on 12 January 2026, and has been widely reported in national media.
As it will be introduced via Royal Decree-Law, no official legal reference exists yet. Once approved, the definitive text must be consulted directly in the Official State Gazette (BOE) to confirm all details, conditions and limitations.
Conclusion
Spain is preparing a new 100% IRPF tax exemption for landlords who do not increase rent when renewing residential leases.
While the measure has been officially announced, it is not yet in force and remains subject to approval and publication. If enacted as announced, it will represent the most generous tax incentive currently available for residential landlords in Spain.
Given the potential tax impact, professional legal and tax advice is strongly recommended before renewing any lease or applying the benefit, once the final regulation is published.
If you are a landlord, investor or property owner and would like tailored advice on how this measure may affect your rental strategy, compliance obligations or tax planning in Spain, specialised legal guidance is essential.
