The October 2026 Spanish Rental Decrees: The Complete Impact on Costa Adeje Investors

ByAna Maria

n October 2026, the Spanish government enacted two major legislative packages: Real Decreto-ley 29/2026 and Real Decreto-ley 28/2026. These decrees substantially modify the Urban Tenancy Act (LAU) and radically change the regulatory landscape for property owners.

For investors in Costa Adeje, these regulations bring new overhead costs, strict operational protocols, and severe restrictions on lease structuring. Here is the complete technical analysis of every critical change introduced by the new laws and how they impact your real estate ROI.

1. The End of the “11-Month” Loophole (Alquiler de Temporada)

Historically, landlords utilized medium-term contracts (6-11 months) to host winter expats, avoiding the strict laws applied to long-term rentals. The new regulations block this practice:

  • Demonstrable Cause: To be legally classified as temporary, there must be a verifiable reason for the tenant’s stay (e.g., a specific short-term work contract or studies).
  • The Reclassification Risk: Without documented justification, the state will automatically reclassify the contract as a primary residence (vivienda habitual), granting the tenant maximum LAU protections.
  • Successive Leases: Executing more than two consecutive temporary leases for the same property, or exceeding 12 months without fresh justification, triggers an automatic presumption of a primary residence.
  • Right of Early Termination: The tenant can now legally break a temporary contract after just one month, providing a minimum 10-day notice, with zero financial penalties for the landlord.

2. Room Rentals (Alquiler por Habitaciones)

Renting a villa room-by-room to bypass rent caps is now strictly regulated:

  • The sum of the rents collected for individual rooms cannot exceed the maximum legal rent limit established for the entire dwelling if it is located in a declared “stressed residential zone.”

3. Increased Direct Costs for Property Owners

Owners frequently transferred administrative costs to tenants. The decrees expressly prohibit this:

  • Agency Commissions: Real estate management and contract formalization fees cannot be charged to the tenant, directly or indirectly.
  • Default Insurance (Seguro de Impago): Owners cannot force tenants to contract and pay for rent default insurance as a condition for signing the lease. The landlord must bear this cost if they want the coverage.
  • Property Tax (IBI): Municipal taxes cannot simply be transferred to the tenant via standard contract clauses.

4. Caps on Rent Increases and Guarantees

Financial parameters are now capped by law:

  • Rent Update Limits: Annual rent increases cannot exceed the official IRAV index. Furthermore, as an extraordinary measure until December 31, 2027, rent increases are hard-capped at 2% in the absence of mutual agreement.
  • Strict Deposit Caps: For primary residences, any additional financial guarantee requested on top of the legal deposit (fianza) cannot exceed two months’ rent. For temporary leases, it is capped at one month’s rent.

5. Maintenance Obligations and Check-Out Protocols

Operational management rules have been tightened:

  • The 15-Day Repair Rule: If a tenant notifies the landlord in writing of an issue affecting habitability and provides a reasonable quote, the landlord has 15 calendar days to accept, propose an alternative, or fix it. If ignored, the tenant can execute the repair and deduct the cost from future rent.
  • Mandatory Check-Out Document: At the end of the lease, the property’s condition must be recorded in a document signed by both parties. Without this document (including photos and meter readings), the law automatically presumes the property was returned in perfect condition, nullifying damage claims.

6. Tenant Rights During a Property Sale

  • Right of First Refusal (Tanteo y Retracto): If you decide to sell your rented property, the tenant maintains a preferential right to buy it. Crucially, the new law voids any contract clause where the tenant supposedly waives this right.

7. Evictions and Forced Extensions

Social protections limit an owner’s ability to recover their asset:

  • Suspension of Evictions: Eviction proceedings (desahucio) for vulnerable tenants without alternative housing can be suspended until December 31, 2030.
  • Extraordinary Extensions: For primary residence contracts ending before December 31, 2028, the tenant can request annual extensions for up to two additional years, which the landlord is legally obligated to accept.

8. Impact on Tourist Rentals (Vivienda Vacacional)

If you utilize your Tenerife villa for short-term holiday lettings (VV), expect new fiscal pressures:

  • 10% VAT Application: Starting December 1, 2026, certain furnished holiday rentals for stays of up to 30 nights will be subject to a 10% VAT.
  • IBI Surcharge (Up to 150%): In stressed zones, local town halls can apply a surcharge to your annual IBI. This can reach 50%, 100%, or even 150% for owners holding four or more properties.

9. Legislative Status: Pending Ratification

While RDL 29/2026 entered into force on October 8, 2026 (and RDL 28/2026 follows on November 15), their permanent status is not guaranteed. Due to the dissolution of the Spanish Parliament ahead of elections, these decrees must still be formally ratified or repealed by the Standing Committee of Congress (Diputación Permanente). Investors must monitor this political process closely.

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