How much can your landlord increase your rent in Spain by this year?

Will’s Short answer: 2%

Giles Penguin-Thorpe. Long answer:

On December 27th, 2022, the Council of Ministers approved the extension of the 2% limit on rent increases, which was agreed on March 29th of that year as part of the National Plan to respond to the economic and social consequences of Russia’s invasion of Ukraine on citizens.

The objective of this extraordinary measure is to mitigate the effects that the rise in the Consumer Price Index (CPI) may have on the rental housing sector, given that it is a common index in contracts.

The rent increase cannot exceed the result of applying the annual variation of the Competitiveness Guarantee Index, which is published by the National Institute of Statistics every month and is capped at 2%. The use of this reference index is due to extraordinary and urgent necessity.

What can I do if my rental contract ends? The tenant of a dwelling can negotiate with the landlord the increase in their rent.

If the landlord is a large holder, that is, a natural or legal person who owns more than ten residential urban properties, the rental increase will be the one agreed upon between the parties, although it cannot exceed 2%.

If the landlord is not a large holder, the rent increase may be higher than 2% if both parties agree. If they do not reach an agreement, the increase will not exceed the result of applying the annual variation of the IGC (Competitiveness Guarantee Index), with a maximum of 2%.

Can I apply the CPI increase when updating the rent of my home? No. The landlord of a dwelling, when the annual rent update time comes, cannot apply the CPI, even if it is stipulated in the contract, but rather the IGC (Competitiveness Guarantee Index).

Extraordinary extension of rental contracts

Rental contracts for habitual housing that expire between December 28th, 2022, and June 30th, 2023, will be extended, at the tenant’s request, for another six months from the end date, maintaining all their conditions.

The extension does not apply if the landlord needs the house for permanent housing for himself or for his first-degree consanguinity or adoption relatives, or for his spouse in cases of separation or divorce, provided that this case was established in the contract.

Suspension of evictions The Government has also extended the suspension of eviction procedures and launches until June 30th in cases of evictions of tenants considered vulnerable without housing alternatives.

The launch can be suspended if the housing belongs to legal entities or to natural persons who own more than ten homes.

What compensation is there for landlords in case of eviction? Landlords affected by the suspension of evictions may request compensation until July 31st, 2023. The application must include a reasoned and justified statement of the compensation requested.

The compensation would be for the period between the suspension and the moment it is lifted. It consists of the average value that corresponds to a rental home in the vicinity of the property, plus current expenses that the landlord can prove having assumed.