Spain Limits Rent Hikes for Existing Contracts

Spain is moving to stabilize housing costs by reintroducing a nationwide 2% cap on annual rent increases. The measure targets older rental contracts signed before May 2023 that are typically linked to inflation. With approval expected from the Council of Ministers on March 20, 2026, the cap aims to protect tenants in high-demand "stressed zones" like Madrid, Malaga, and the Balearic Islands.

The policy overrides standard inflation-linked clauses, meaning if your contract was set to rise by the current inflation rate of 2.3%, it will now be limited to 2%. This change follows a series of "Social Shield" measures designed to address the ongoing housing crisis and will take effect immediately upon publication in the Official State Gazette.

Who is affected

This update primarily benefits long-term expats and digital nomads who have remained in the same apartment since early 2023 or earlier. For a monthly rent of €1,000, the cap limits the annual increase to €20.

It is important to note that this does not apply to new rental agreements, seasonal leases, or short-term tourist rentals. Landlords are still permitted to set market rates when signing with a new tenant, though they face restricted updates for existing renewals.

What you should do

If you are living in Spain on a pre-May 2023 contract, check your upcoming renewal date. You do not need to file any paperwork or pay new fees to benefit from this; the cap applies automatically to any rent update occurring after the official publication date.

Keep an eye on nomad news for further updates regarding "stressed zones," as some local governments are also proposing additional curbs on room rentals and seasonal leases to prevent landlords from bypassing these caps.

Read our full Spain guide for the complete picture.