Spain Extends Rent Contracts Two Years, Rejects Indefinite Renewals

On Thursday Spain’s Congress passed a decree giving eligible tenants a two-year extension of their rental contracts and keeping eviction protections for vulnerable tenants alive through the end of 2030, Spain in English reported. Lawmakers voted down a second decree that would have let tenants renew leases automatically and without limit.

The votes came one day after Spain’s first general strike in 14 years, and hours before campaigning formally opened for the Nov. 29 general election. The People’s Party (PP), ahead in most polls, has promised to repeal the approved measures if it wins power.

How the Permanent Deputation voted

Both decrees went to the Diputación Permanente (Permanent Deputation), a 69-member body that holds some parliamentary powers while the 350-seat lower house is dissolved for the election. The body’s makeup gave the government better odds than the full chamber offered. Junts per Catalunya (JxCat) has seven MPs, who helped sink both original decrees in October, but only one seat here.

The Basque Nationalist Party (EAJ-PNV) was the swing vote twice. Together with the governing Socialists (PSOE), their partner Sumar and other left-wing groups, it carried the first decree 35 to 34. The PP, the far-right Vox, the Navarrese People’s Union (UPN) and JxCat opposed it. On the second decree the PNV changed sides and joined those four parties, and the result was the same margin, this time a defeat.

What the approved decree changes

• Eligible tenants may prolong their contracts by two years, and rent rises are capped at 2%. Where rent already exceeds the government’s reference price for the area, it cannot go up.
• Until the end of 2030, tenants whom social services regard as financially or socially vulnerable stay protected if regional authorities have no other housing to offer them. Public bodies are meant to pay the costs of suspended evictions so small landlords do not.
• Also through 2030, property companies may not buy homes at less than 70% of appraised value. The rule aims at bulk purchases of discounted homes for resale by investment firms often called “vulture funds”.
• The package adds a 10% tax on tourist apartment rentals, a tax incentive for residential letting and state-backed loans for buyers who need help with the deposit on a home they will live in.

Why the second decree failed

Under the defeated text, an owner wanting to end a contract would have owed the tenant compensation equal to a year’s rent. Housing campaigners ranked automatic renewal among their main demands. Critics argued it would drive some owners out of the rental market and push prices higher.

Maribel Vaquero of the PNV faulted the government’s handling of consultation and said help for vulnerable tenants can coexist with support for small landlords. The PP builds its housing platform around supply, promising to oversee construction of one million homes and to reduce taxes and red tape for developers.

What it means for tenants and landlords

Social Rights and Consumer Affairs Minister Pablo Bustinduy said as many as five million tenants could benefit, and his ministry estimated a median saving of €4,341. For the usual rules on duration and increases, see the guide to rental contracts in Spain.

Landlords get public funding for suspended evictions under the approved text, while the indefinite renewal with year’s-rent compensation will not become law. The PP’s pledge to repeal covers the measures that passed.

How the housing fight reached Congress

Protests gathered pace in September after Maricarmen Abascal, an 87-year-old Madrid pensioner, lost her lifelong home following a steep rent rise by the company that owned it. She died soon afterward. The eviction was broadcast nationally and sparked demonstrations and protest camps in several cities, the biggest at Madrid’s Puerta del Sol.

Prime Minister Pedro Sánchez’s minority government offered two emergency decrees. Once both failed in October, he called an early election, moving up a vote originally due in 2027. The main unions then called Wednesday’s strike, and the government came back with two largely similar texts.

Campaign lines drawn in the chamber

Housing Minister Isabel Rodríguez said the right to housing had prevailed the day before in the streets and workplaces, and she hoped it would do so again at the ballot box. Bustinduy asked what meritocracy exists in an heir to 100 flats raising rents by 40%.

The PP demanded Rodríguez’s resignation and accused the government of using the Permanent Deputation to reverse the full chamber’s October decision. PP lawmaker Sergio Sayas said the ministry had pledged more homes and delivered only demagoguery. Vox’s Carlos Hernández Quero argued that government policy had shrunk the supply of rentals.

Some left-wing voices were critical too. Podemos leader Ione Belarra faulted Interior Minister Fernando Grande-Marlaska over policing at some recent demonstrations, and Sumar MP Verónica Martínez Barbero called for him to resign. The sharpest clash pitted the Catalan pro-independence parties against each other. JxCat’s Josep Maria Cruset accused the government of exploiting the housing crisis for electoral gain, and Esquerra Republicana’s Gabriel Rufián charged JxCat with siding with Vox, waving a €50 note as he spoke.

Source: Spain in English