Starting next December 1, the personal income tax reductions for owners of rental homes will change. The entry into force of the modifications reflected in Decree-Law 29/2026with which different changes were also made to the Urban Leases Law, with the aim of establishing a series of compensations for those tenants whose contract is not going to be renewed or is terminated before the expected period.
However, one of the most common problems claimed by landlords was the increase in rental prices. To try to solve this issue, the Government has ordered a series of changes in Law 35/2006, of December 28, on Personal Income Tax. Specifically, article 6 of said royal law establishes a series of tax penalties for owners who carry out this type of practices.
Likewise, those landlords who choose to reduce the rental price of their home will have access to a series of benefits in the next income tax return. In this sense, the greater the reduction, the greater the reduction and vice versa. A measure with which the current Government of Spain seeks to find a solution to a problem that caused massive demonstrations in the main cities of the country.
Limitations on the reduction of personal income tax in the event of raising the rent
First of all, it should be taken into account that these provisions will apply to contracts signed on or after December 1, 2026 and will depend on the difference in the rental price with respect to the previous agreement. Those owners who choose to increase the amount will see reduced personal income tax reduction which they will be able to use in the next income tax return. It may be limited to 15% in the most serious cases.
In the event that the rental contract presents an increase of less than 5%, your landlord will only have access to 40% of the tax advantage. This percentage is reduced to 30% in the event that there is an increase in income of between 5% and 10%; to 25%, if it reaches a 15% increase; to 20%, if it does not exceed 20% increase; and 15%, in those cases whose owner wants to establish a price higher than 20%.
Secondly, it is worth remembering that this modification does not imply a financial fine for those landlords who decide to raise the rental price of their homes, but it also reduces their access to tax advantages if they do so. Likewise, the percentage of personal income tax reduction that they can access increases, reaching 100% in the event that the income is established below the reference index.
They will be able to benefit from a 100% reduction in personal income tax in these cases
Those who decide to reduce the rental price by more than 5% in the next contract, and meet the rest of the requirements, will be eligible for a 70% tax advantage. This percentage may be increased to 85% if the tenant is between 18 and 35 years old outside a stressed area; 90% if the home is in a stressed area; and 95% if it is located in a stressed area and the tenant is of legal age and under 36 years of age.
To have access to a 100% reduction in personal income taxit will be necessary to renew the contract of the same tenant, following the deadlines and extensions obligations established by law, and the price drops by more than 5%. Likewise, those who enter into a new contract may benefit if the income is below the limit established by the reference index.
On the other hand, Royal Decree-Law 28/2026, of October 6, does establish a series of financial compensation for those tenants whose contract is not going to be renewed. Specifically, the owner must pay an amount equivalent to the highest of the following cases: twelve monthly payments, according to the highest rental price established by the state system for the type of property; or one monthly payment per year that you have resided in the property, according to the established price.