The Spanish Tenancy Law (LAU) in 2026: Lease Types, Duration, Rent Updates and Tenant Rights

Spain’s residential rental market runs on a single statute: the Ley de Arrendamientos Urbanos (LAU), formally Ley 29/1994 of 24 November, in force since 1 January 1995 and most recently reformed by Ley 12/2023 (the Housing Law) on 26 May 2023. It sets the minimum lease duration at 5 years for individual landlords and 7 years for corporate landlords, caps annual rent updates to the INE’s IRAV index (2.48 per cent for May 2026), requires a one-month security deposit, and defines the grounds on which a landlord can terminate early. A short-lived decree, RDL 8/2026, imposed a 2 per cent cap and a 2-year extraordinary extension from 22 March 2026, but Congress derogated it on 30 April 2026, restoring the IRAV framework. Whether you are a non-resident owner planning to let a Costa del Sol apartment long-term or a tenant signing your first Spanish lease, the LAU is the framework that governs what you can and cannot agree.

What is the LAU and which tenancies does it cover?

The Ley de Arrendamientos Urbanos (Ley 29/1994, BOE-A-1994-26003) regulates the leasing of urban properties in Spain, splitting all tenancies into two categories under Article 1: arrendamiento de vivienda (residential leases for permanent housing, Title II) and arrendamiento de uso distinto de vivienda (non-residential leases, Title III, including seasonal, commercial and professional use). The distinction matters because residential leases carry strong tenant protections, mandatory minimum durations and rent-update rules that non-residential leases largely do not.

Article 2 defines a residential lease as one whose primary purpose is to satisfy the tenant’s permanent housing need. Article 3 defines everything else, explicitly listing seasonal use (verano, or summer lets), industrial, commercial, artisanal, professional, recreational, care, cultural or teaching purposes. Article 5 excludes certain tenancies from the LAU entirely: housing tied to employment (porters, caretakers, military housing), agricultural tenancies, university residences, and tourist lets (viviendas de uso turistico), which fall under their own regional tourism regime rather than the LAU.

This exclusion is why short-term holiday rentals on the Costa del Sol are regulated through the VFT (vivienda con fines turisticos) framework and the community-voting rules under the Decreto-ley of February 2025, not through the LAU. If you rent your property to tourists, the LAU’s residential protections do not apply. Our guide to Costa del Sol short-let rules covers that separate regime in detail.

How long can a residential lease last in Spain?

The LAU’s duration rules are its most important provision for landlords and tenants. Article 9 sets a statutory minimum duration that overrides whatever the contract says:

• 5 years if the landlord is an individual (persona fisica)
• 7 years if the landlord is a legal entity (persona juridica, such as a company)

If the parties agree a shorter term, say one or two years, the contract auto-extends in annual increments until it reaches the statutory minimum. The tenant, but not the landlord, can prevent the extension by giving 30 days notice before each extension date. Once the minimum term is reached, Article 10 provides a tacit extension of up to 3 additional years in annual increments, unless the landlord gives 4 months notice of non-renewal or the tenant gives 2 months notice.

There is one exception for individual landlords: Article 9.3 allows the landlord to recover the property after the first year if the contract expressly states the landlord needs it for themselves, a first-degree relative, or a spouse in cases of separation or divorce. The landlord must give 2 months notice. If the property is not occupied within 3 months of the termination date, the tenant can demand reinstatement or compensation of one month’s rent per remaining year up to 5.

A tenant can also leave early. Under Article 11, the tenant can withdraw after 6 months have elapsed, giving 30 days notice. The contract may include a penalty of one month’s rent per remaining year, calculated proportionally for partial years. This early-withdrawal right is mandatory and cannot be contracted out of. Our guide to rental contract types explains how the habitual, temporada and tourist regimes interact.

How is rent updated under the LAU in 2026?

The rent-update mechanism changed fundamentally with Ley 12/2023. For contracts signed before 26 May 2023, the parties could agree to update rent annually using the CPI (Indice de Precios al Consumo), with temporary caps of 2 per cent in 2023 and a 3 per cent transitional cap in 2024 under the interim measures. For contracts signed after 26 May 2023, Article 18 of the reformed LAU requires rent updates to use the IRAV (Indice de Referencia para la Actualizacion de Arrendamientos de Vivienda), a new index defined and published by the INE.

The IRAV is designed as a ceiling, not a floor. It is calculated as the minimum of several CPI-based measures, including the annual rate of the CPI, the annual rate of core CPI (IPC subyacente), and the adjusted average of these rates against a medium-term expected inflation parameter, moderated by a coefficient. The INE publishes it monthly, typically around the 12th to 14th of each month, referring to the preceding month. As of May 2026, the IRAV stands at 2.48 per cent annual variation, published by the INE on 12 June 2026. This means a landlord with a post-May-2023 contract can increase rent by at most 2.48 per cent at each annual review date. If the contract does not specify a review date, no increase can be applied. If the parties agree a lower update or no update, that stands. Our dedicated guide to Spanish rent increase rules covers the IRAV calculation and the cap history in more detail.

In stressed zones (zonas de mercado residencial tensionado) declared by an autonomous community under Ley 12/2023, additional restrictions apply: initial rent cannot exceed a reference price set by the Ministerio de Vivienda, and large holders (gran tenedores, defined as owners of more than 10 residential properties or more than 1,500 square metres of residential space) face tighter caps. As of the first quarter of 2026, only the Basque Country has declared stressed zones. No Andalusian municipality has been declared, meaning the Costa del Sol rental market operates without the additional price and prorrogation restrictions.

The RDL 8/2026 episode: a 37-day 2 per cent cap

A short-lived decree, Real Decreto-ley 8/2026 of 20 March (BOE-A-2026-6545), imposed two extraordinary measures on the residential rental market from 22 March 2026:

1. A 2 per cent cap on rent updates: Article 2 limited the annual rent update to 2 per cent in the absence of an agreement between the parties. For large holders (gran tenedores), the 2 per cent cap applied in all cases, regardless of any agreement. This replaced the IRAV mechanism temporarily.
2. A 2-year extraordinary extension: Article 1 allowed tenants of contracts ending before 31 December 2027 to request an extraordinary extension of up to 2 additional years, preserving the essential terms and conditions of the original contract.

The decree was enacted in response to the economic consequences of the Iran war and the inflationary pressure on energy prices. Congress voted to derogate it on 28 April 2026 (BOE-A-2026-9359), with the derogation taking effect on 30 April 2026 per the BOE record. The RDL was in force for 37 days, from 22 March to 30 April 2026. Several competitor guides still present the 2 per cent cap as current law, but it is no longer in force. The standard IRAV framework under LAU Article 18 applies again.

Period	Applicable rent-update mechanism	Legal basis
Before 26 May 2023 contracts	CPI (or agreed index)	LAU Art 18 (pre-reform)
2023-2024 transitional caps	2 per cent (2023), 3 per cent (2024)	RDL transitional measures
After 26 May 2023 contracts	IRAV (2.48 per cent, May 2026)	LAU Art 18 (reformed by Ley 12/2023)
22 March to 30 April 2026	2 per cent cap (all contracts)	RDL 8/2026 Art 2 (BOE-A-2026-6545, derogated)
From 1 May 2026	IRAV (2.48 per cent, May 2026)	LAU Art 18 (reformed), IRAV framework restored

What is the security deposit (fianza) and how does it work?

Article 36 of the LAU requires a mandatory cash security deposit, the fianza:

Tenancy type	Legal deposit	Additional guarantees
Residential (vivienda)	1 month’s rent	Not permitted beyond the legal deposit
Non-residential (uso distinto)	2 months’ rent	Permitted by agreement

The landlord must deposit the fianza with the relevant autonomous community’s housing authority within one month of the contract signing. In Andalucia, this is the Instituto de Fomento de Andalucia (IFA) via the deposit registry. The deposit is returned to the tenant at the end of the lease, less any deductions for unpaid rent or damage beyond normal wear and tear, within a period set by the autonomous community (typically 1-2 months after the tenant vacates and returns the keys).

For residential leases, the LAU prohibits demanding additional guarantees beyond the one-month fianza. Landlords sometimes ask for a bank guarantee or an extra month, but this is unenforceable for residential tenancies under Article 36. Non-residential leases can carry additional guarantees by agreement.

What is a seasonal (temporada) contract and when is it valid?

A contrato de temporada is a non-residential lease under LAU Article 3, used for temporary accommodation that is not the tenant’s permanent residence. Common legitimate uses include work assignments, study periods, medical treatment, or a defined holiday period. The key distinction from a residential lease is that a seasonal contract has no statutory minimum duration, no mandatory extension, and no residential tenant security.

However, Spanish courts apply a substance-over-form test. If a seasonal contract is used to house someone who is in fact living there permanently, a court can reclassify it as a residential lease under LAU Title II, triggering the 5-year minimum and all tenant protections. Indicators courts look at include the length of the let, whether the tenant has registered on the padron (empadronamiento) at the property, whether they have moved their main belongings there, and whether the contract states a genuine temporary purpose.

Some landlords on the Costa del Sol use temporada contracts as a workaround to avoid the LAU’s residential protections, particularly to let to tourists without registering as a VFT. This carries significant legal risk: if the actual use is tourist accommodation, the property should be registered under the VFT regime, and an unregistered tourist let can attract fines from EUR 25,000 under Andalucia’s enforcement scale. Our guide to renting out property as a non-resident covers the decision between long-term, seasonal and short-term regimes in detail.

On what grounds can a landlord terminate a residential lease?

Article 27 of the LAU lists the grounds on which a landlord can terminate a residential lease early, before the minimum term or extension expires:

1. Non-payment of rent or the deposit (fianza) or its update
2. Unconsented subletting or assignment of the property
3. Deliberate damage to the property or unauthorised works requiring landlord consent
4. Nuisance, illegal or dangerous activities carried out in the property
5. The property ceasing to be the tenant’s primary residence (Article 7)

For non-payment, the most common ground, the landlord initiates the express eviction procedure (juicio verbal de desahucio). The process begins with a formal requirement to pay or vacate. If the tenant does not respond within the deadline set by the court, the landlord can obtain an eviction order and enforce it. Our guide to the express eviction process covers the 2026 timeline and landlord rights in detail.

The landlord cannot terminate for convenience during the minimum term. The early-termination right under Article 9.3 (personal need) applies only after the first year and only if the contract expressly includes that clause. A tenant’s early withdrawal under Article 11, by contrast, is always available after 6 months with 30 days notice.

How does the LAU interact with tax obligations for landlords?

A non-resident landlord letting Spanish residential property under the LAU must declare rental income through the Modelo 210 non-resident tax return, filed quarterly. The IRNR (Impuesto sobre la Renta de No Residentes) rate is 19 per cent for EU/EEA residents on net rental income after deductions, and 24 per cent for third-country residents (including UK post-Brexit and US) on gross income with no deductions. Our guide to non-resident income tax covers the rates, deductions and filing mechanics in detail.

The LAU itself does not set tax rates, but the rent-update cap (IRAV) directly affects the taxable base: a capped rent means a capped gross income figure on the Modelo 210 return. Community fees (cuotas de comunidad) that the landlord pays are deductible for EU-resident landlords but not for non-EU landlords, which is relevant if the property is in a building governed by the community of owners framework under the Ley de Propiedad Horizontal.

What did the 2023 reform (Ley 12/2023) actually change?

Ley 12/2023, the Housing Law (BOE-A-2023-12203, in force 26 May 2023), made several material changes to the LAU:

Area	Before Ley 12/2023	After Ley 12/2023
Rent update index	CPI (with temporary 2 per cent cap)	IRAV (INE reference index, Article 18)
Corporate landlord minimum	7 years	7 years (unchanged)
Tacit extension	Up to 3 years	Up to 3 years, plus extraordinary extensions for vulnerable tenants (Article 10.2) and in stressed zones (Article 10.3)
Large holder definition	Not defined	More than 10 residential properties or 1,500 sqm (Article 3.k), tighter rules in stressed zones
Stressed zones	Did not exist	Autonomous communities can declare them, triggering price caps and extension rules
Social housing	Not defined at state level	Defined: vivienda social and vivienda de precio limitado

The reform did not change the 5-year individual landlord minimum, the 6-month tenant withdrawal right, or the one-month fianza. Its main effect on most non-resident landlords is the shift from CPI to IRAV for rent updates, which tends to produce lower annual increases than the old CPI mechanism.

Stressed zone declarations as of Q1 2026

Only the Basque Country (Paıs Vasco) has declared stressed zones under Ley 12/2023. The Secretaria de Estado de Vivienda publishes a quarterly resolution in the BOE listing all declared zones. As of the first quarter of 2026 resolution (BOE-A-2026-9175, 23 April 2026), the declared Basque municipalities include Bilbao, Vitoria-Gasteiz, Donostia-San Sebastian, Irun, Barakaldo, Galdakao, Errenteria, Zumaia, Lasarte-Oria, Astigarraga, Usurbil, Hernani, Lezo, Tolosa, Pasaia, Zestoa and Mondragon (Arrasate). The Q4 2025 resolution (BOE-A-2026-2448, 30 January 2026) added Hernani, Lezo and Tolosa. The Q1 2026 resolution added Pasaia, Zestoa and Mondragon. Each declaration lasts three years from publication.

No Andalusian municipality has been declared a stressed zone. This means Costa del Sol landlords and tenants operate under the standard LAU framework without the additional price caps, large-holder restrictions or extraordinary extension rules that apply in the Basque Country. A non-resident owner letting property in Marbella, Estepona or Sotogrande is not affected by stressed-zone rules.

What should a landlord or tenant check before signing a Spanish lease?

Before signing, both parties should verify the following:

• The property’s legality: check that the property has a licencia de primera ocupacion (habitability certificate) and is not in an AFO (asimilado a fuera de ordenacion) status that restricts use. An independent lawyer should confirm this in the due diligence phase.
• The landlord’s title: request a nota simple from the Registro de la Propiedad confirming the landlord owns the property and there are no encumbrances that could affect the tenancy.
• The contract type: confirm whether the lease is residential (Title II) or seasonal (Title III), and that the stated purpose matches the actual intended use.
• The rent-update clause: check whether it references the IRAV (required for post-May 2023 contracts) and specifies the review date. The RDL 8/2026 2 per cent cap no longer applies.
• The deposit: confirm the one-month fianza will be deposited with the autonomous community’s housing authority, not held informally by the landlord.
• The community rules: if the property is in a building with a comunidad de propietarios, check whether the community has restrictions on letting that could affect the tenancy.

This guide is general information, not legal or tax advice. Rules change and individual circumstances differ. Verify current requirements with an independent lawyer (abogado) or tax advisor (gestor/asesor fiscal) before acting.