Renting property in Spain is a fantastic way to start your new life. For one, it gives you a chance to get to know the area and to make sure it is where you want to live. But even long-term, renting can be a better solution than buying a new home in Spain. Taxes are high for purchasing a home, so you risk losing money if you decide to sell up in a few years. Renting a property is a great option; some beautiful properties are available for all budgets. Let’s take a closer look at the property rental market in Spain.
Long-term or Short-Term Property Rental in Spain?
- Long-term rentals have a minimum term of one year. They allow you to stay for up to 5 years if you uphold the terms of the contract. Once the minimum time has expired, you can give two months’ notice if you wish to move out.
- Short-term rentals are anything up to 11 months. You will have fewer rights and will not be allowed to renew at the end of the 11 months. However, short-term rentals can be a great way to start your stay in Spain.
- Holiday lets are daily or weekly rentals. These follow a different legal framework.
Spain’s new housing law or Ley de Viviendas
Spain’s government passed a new law on Thursday, May 18th, changing landlords’ and tenants’ rights and responsibilities. The legislation aims to reduce rental costs, increase tenant rights, and add to available housing stock. Here are the five key things you need to know about renting property in Spain under the new regulations.
- Rent increase will be controlled by a new index. Previously, landlords could use CPI (annual inflation figures) for rental increases during a contract. Maximum increases will now be set (2% in 2023 and 3% in 2024, with the index updated annually).
- The government has described “stressed” areas or ‘Zona Tensionada.’ These are areas where the Consumer Price Index (CPI) is 5 points or higher than the provincial figure, or families pay more than 30 percent of their income for rent. In these areas, the government can restrict the maximum rental charge.
- Landlords can’t increase real rental costs by adding new inclusive charges like rubbish collection, community levies, or shared external upgrades.
- A major change is that the cost of the lease is now the landlord’s responsibility. This means the landlord must pay the agency fee. We’ve heard of instances where agencies insist that tenants in their area still pay. Push back, as this is not the case.
- Properties that are vacant for more than two years may be liable for a Real Estate Tax (IBI) surcharge of up to 150 percent
Where to find a long-term rental property in Spain
The first port of call in any search for a rental in Spain should be one of the leading property websites. They show the listings from the vast majority of local agents. The top two are Idealista and Habitaclia.
You can narrow your search by various filters to help you find exactly what you’re looking for. Set a price range and a search area first. Then you can refine by floor area, number of bedrooms and bathrooms, and facilities such as a pool or garden.
We recommend sorting results by price, as you will discover properties are listed multiple times. By sorting them by price, you can spot the same property displayed by several agents. You can contact the agents through these websites to make appointments. They are the easiest way to find property rentals in Spain.
If you prefer the personal touch, you could use the sites above to list all the local agents. Then see them in person or give them a call. The advantage of this approach is they may know of properties about to come on the market, and you can apply early! This method is an excellent way to ensure you’re not pipped to the post on the most desirable properties.
Word of Mouth
If you know people in the area, looking for a deal without paying agents’ fees is always a good idea. This can be a significant saving! Post a Facebook message to find rental properties in Spain yet to be added to the open market. Join some local Facebook groups and post in those. You could get a cheap deal.
How to apply for a rental property in Spain
If you have found somewhere with an agent, be aware they are working for the owner, not for you. It is standard to pay a holding deposit until you can complete the rental contract. The deposit amount varies but is usually equivalent to one or two months’ rent. The estate agency will hold the deposit until the contract signing when it is returned to you.
To complete the contract, you will typically be asked to provide the following:
- Evidence you can pay the rent. This evidence might be proof of employment, income, or savings.
- Tax identification number (your NIE).
- Passport or other identification.
- Personal references from past landlords, employers, or other suitable people.
- A Spanish bank account to pay rent and utilities.
What if you don’t have a job or steady income?
They may ask for more rent in advance. For instance, six months of rent in one payment. Or proof of enough savings to cover the rent for a considerable period. Depending on your situation, this requirement can vary from agent to agent and landlord to landlord. We advise being open and honest to understand the requirements if you are interested in a property.
Tenancy agreements and rental contracts in Spain
What are the typical upfront costs of property rental in Spain?
The costs will vary depending on the desirability of the area and the property. For property hotspots, expect to pay:
- Two months’ rent as a deposit.
- One month’s rent in advance.
- The law changed in May 2023, and the landlord is now eligible to pay one month’s rent in agency fees. Previously, it was the tenant who would pay this fee. Many of our clients are reporting that agencies are still asking the tenant for this fee. We recommend you push back on it and refer to the new law. In areas with massive demand for rentals and low supply, however, we see that tenants are still paying this fee. As our client David said, “There were 3 other interested parties in my apartment in Madrid. If I did not pay the agency fee, then the next party would get the apartment”.
So you will need the equivalent of three to four months’ rent upfront. In less popular spots, you may only need one month’s deposit.
See our guide to transferring money to Spain to get the best deal when you move large sums of money to Spain.
How rental deposits work
Insist your deposit is held by a 3rd party, like the Cambra de la Propietat Urbana or a real estate agent. This provision makes lease-end disputes fairer than if the landlord has your cash.
Finally, pay your deposit by bank transfer so that you have an electronic record and insist on a signed receipt.
In practice, many tenants withhold the last two months’ rent to ensure the landlord doesn’t try to keep their deposit. However, legally, this is not advised.
Tenant rights when Renting Property in Spain
As a tenant in Spain, you will have more rights than in many countries. While contacts vary, this is the standard for many long-term rental properties. Take this information as a generalized guide only.
- Most contracts are for a minimum period of one year.
- As a tenant, you have the right to renew the contract four times for a total of five years. Any rental increase must meet the conditions in the contract. The rent could be increased if significant improvements are made to the property. Generally, rental increases are limited to the consumer price index rate (Indice de Precios de Consumo).
Note: The landlord is obliged to register your tenancy with the authorities.
The changes to the Rental Law in May 2023 also include increased protection from eviction for certain groups. This can include the elderly, people with disabilities, and financially distressed individuals.
Termination by you
- In the first six months, you may be liable to pay out the balance of the contract.
- After six months, you may need to give 30 or 60 days’ notice.
Termination by the landlord can happen. Here are a few standard clauses.
- Non-payment of your rent.
- You break a condition of the contract, like subletting, etc.
- You do significant renovations without the landlord’s permission.
- The landlord is going to move into the house personally. This can only be after the first year, and they must give you at least two months’ notice.
Landlord access to the property.
The landlord cannot access the property without your express permission. Where they need access for renovations or repairs, you can agree on a reasonable time and duration.
Landlord vs. Tenants vs. Estate Agent responsibilities.
You can negotiate directly with a landlord when renting a property in Spain. No real estate agent is required to be involved in your lease. However, most landlords prefer to use an estate agent to advertise and show their properties.
There is no standard law of how involved the estate agency will be once the lease is signed. Once you move in, most tenants work directly with their landlord to sort out issues that arise. You must understand and agree on how things will work during your tenancy. Ask these questions and be clear on the answers before you pay the holding deposit.
- How will you handle issues that arise, like repairs and maintenance? Is it through the landlord, the estate agent, or a property manager?
- What expenses are you responsible for? Terms like “minor maintenance” have very different interpretations.
- If you are responsible for work, do you get to choose the supplier and materials?
- What dispute resolution process is available to you if there are disagreements?
- Who will handle the contract renewal and any rental negotiations?
Tip: Email the landlord/estate agent a summary once you have agreed on these items. That way, you’ll have a written record to refer to.
You must agree on who will pay for utility costs. This includes water, electricity, gas, and the internet. In apartments, there may be a split between common area costs and those of the apartment.
The type of property you are living in also can impact your responsibilities. For example, shared area maintenance is usually the landlord’s responsibility if you rent an apartment.
Furnished vs. Unfurnished
Read your contract carefully to understand the inclusions and exclusions. Some consider an unfurnished property to be just the walls and roof. Others may include large household appliances, such as refrigerators, stoves, etc. Make sure that the contents of the property you inspect will still be there when you move in.
In a furnished property, you’ll be responsible for the upkeep and condition of all the items in the house.
Tips and Tricks When Renting Property in Spain
Negotiating rent in Spain is the same as anywhere else. It’s all about the demand for the property. It’s always worth making an offer, but if the demand is high, you may need to go over the asking price. You will get a feel for this pretty quickly when you see how quickly the rental market is moving.
This is a good reason to monitor the market for as long as possible before moving. This way, you will see if the properties are going like hotcakes or languishing for months. Knowledge is power!
FAQ – Renting Property in Spain
Can foreigners rent real estate in Spain?
Yes, absolutely! You may need to prove residency with your TIE, but this isn’t always necessary.
What do I need to rent a property in Spain?
Proof of income or savings, a TIE, a passport, a Spanish bank account, and references.
How long can I rent a house in Spain?
Long-term rental contracts are typically for 5 years. You can leave after one year if you give two months’ notice. But they can’t evict you within 5 years if you uphold the terms of the contract.
Can I move to Spain and rent a property?
If you can prove your income or savings will cover the rent, you should be able to rent a property in Spain.