Spain’s Housing Law: IRAV, rent control areas and what it means for landlords

What the law covers

Law 12/2023 of 24 May 2023 on the right to housing regulates residential letting across Spain. Some measures only apply if the region activates them, such as stressed (rent control) areas.

Annual rent updates: the IRAV

During a lease, rent can only rise each year up to an index published by INE, the IRAV (reference index for updating residential leases). It has replaced the consumer price index since 2025 for contracts signed after 25 May 2023.

Latest published value: 2.54% (09/2026). It updates automatically on our pages and in every analysis.

Stressed market areas

A region can declare stressed areas. There, rent on a new contract cannot exceed the previous contract’s rent (with exceptions), and large landlords are capped by a reference index.

Catalonia has applied this since 2024, including in Barcelona. Other regions, such as Madrid, Andalusia and the Valencian Community, had chosen not to apply it: check the town’s current status before buying.

Lease length and fees

Minimum 5-year lease at the tenant’s option (7 years if the landlord is a company), then 3 years of tacit renewal.

Letting agency and management fees are paid by the landlord.

Tax incentives (residents)

For a landlord who is tax resident in Spain, net income from a home let as the tenant’s main residence gets a 50% reduction, up to 60, 70 or 90% under conditions (renovation, young tenants, lower rent in a stressed area).

These reductions apply to resident income tax (IRPF). Non-residents are taxed under IRNR rules: see our guide for non-residents.

Key takeaways for investors

Model returns with a realistic rent and increases capped at the IRAV, and check whether the town is in a stressed area.

buy2rent.io includes the latest IRAV value in every listing analysis.