Spain Sets Minimum Residential Leases at Five Years, and 7 Years When the Landlord Is a Company
Spain's new tenancy decree fixes minimum residential leases at five years, or 7 years for corporate landlords, with 12 months of rent as minimum compensation.
A residential tenancy in Spain must now run for at least five years before it renews automatically where the landlord is a natural person, and the minimum rises to 7 years where the landlord is a legal person. The rule comes from Real Decreto-ley 27/2026, dated 29 September, which appeared in the official gazette on 1 October 2026 and enters into force on 2 October 2026. It occupies pages 128380 to 128387 of gazette number 243 and contains a single article.
One article, and it rewrites the end of every lease
That single article amends article 10 of the 1994 urban tenancy law, the provision that governs what happens when a lease reaches the end of its agreed term. Around it sit two additional provisions, one transitional provision and two final provisions. The first additional provision coordinates the text with Real Decreto-ley 26/2026, the housing decree published in the gazette the previous day, and the second deals with how references to the amended rules are to be read.
The notice periods are deliberately unequal, and the longer one falls on the landlord. A landlord who does not want the lease to renew must say so six months in advance. A tenant who wants to leave needs to give two months. The decree also sets a limit on absence: a tenant away from the dwelling for more than six months loses the status of habitual residence that the whole protective regime is built on.
Ending a lease early is now priced, not just notified
The text sets a minimum compensation of twelve months of rent, with an alternative calculation of one month of rent for each year the tenant has occupied the dwelling. Where the landlord ends the lease by invoking their own need for the property, they then have three months to actually occupy it.
Read together, those three numbers change the nature of the decision. Recovering a dwelling before the minimum term is no longer a matter of serving notice and waiting; it carries a stated price, and the price rises with the length of the tenancy. An owner who intends to sell with vacant possession, or to move in, now has a cost to compare against the gain from doing so.
Two extension regimes, and the municipality decides which applies
Beyond the minimum term, the decree provides for extraordinary extensions. Where the tenant is in a situation of vulnerability, the lease can be extended by up to one year. In a zone designated as a strained residential market, the extension can run up to three years. That designation rests on the 2023 housing law rather than on this decree, so the same flat can carry a different maximum commitment depending on whether the municipality it sits in has been designated. A single transitional provision governs how all of this applies to contracts already in force.
What it changes for a landlord in our data
Our Spain row, measured before the decree, carries a national average asking price of USD 3,390 per square metre and an average asking rent of USD 17.50 per square metre per month, with an annual price rise of 12.8%. The decree does not regulate price, so that 12.8% describes a market the new rules have not yet touched. We score Spain 61 on our bubble risk scale, in the elevated band, at high confidence, with transaction costs of 15.3% and freehold ownership carrying no restrictions on foreign buyers.
The tax line is where the new term bites hardest, and it is not in the decree. In our data, a landlord resident in the European Union or the European Economic Area pays 19% on net rental income after expenses, while a landlord resident outside it pays 24% on the gross rent with no deductions at all. A seven-year minimum commitment is a different proposition for those two owners: one can set costs against the income over the longer term, the other cannot. This is reporting on a legal change and not legal or tax advice.
Sources: Boletin Oficial del Estado, Real Decreto-ley 27-2026 de 29 de septiembre, BOE-A-2026-20385, BOE num. 243 of 1 October 2026 https://www.boe.es/diario_boe/txt.php?id=BOE-A-2026-20385; Boletin Oficial del Estado, consolidated text of Real Decreto-ley 27-2026 https://www.boe.es/buscar/act.php?id=BOE-A-2026-20385