From December 1, landlords who increase rent by more than 20% will only be able to apply a 15% reduction in income tax. Those who lower the price will have access to greater deductions.
From December 1, 2026, the income tax reductions for landlords of rental properties will change. According to La Razón, the modifications are included in the Decree-Law 29/2026, which also introduces changes to the Urban Leasing Law to set compensation for tenants whose contracts are not renewed or are terminated early.
The Government has also included tax penalties for those who raise rental prices, a problem that landlords have identified as one of the most common. The measures amend the Law 35/2006, on income tax, and will apply to contracts signed from December 1, 2026, with a reduction depending on the difference between the new rent and the previous contract.
The greater the increase, the lower the tax reduction. With an increase of less than 5%, the landlord will access 40% of the advantage. With an increase between 5% and 10%, the percentage drops to 30%, and with an increase of up to 15%, to 25%. If the increase does not exceed 20%, the advantage remains at 20%, and if the rent rises by more than 20%, it drops to 15%.
The regulation clarifies that this is not a fine. Access to tax advantages is limited, but the percentage of reduction rises to 100% when the rent is set below the reference index.
Those who lower the rent by more than 5% in the next contract, meeting the other requirements, can opt for a reduction of 70%. The percentage increases to 85% if the tenant is between 18 and 35 years old outside a pressured area, to 90% if the property is in a pressured area, and to 95% if, additionally, the tenant is under 36 years old.
To achieve a 100% reduction, it will be necessary to renew the contract with the same tenant, respecting the legal deadlines and extensions, and to lower the rent by more than 5%. New contracts with rent below the reference index limit will also be eligible for that percentage.
On the other hand, the Royal Decree-Law 28/2026, of October 6, establishes compensation for tenants whose contracts are not going to be renewed. The landlord must pay the greater amount between twelve monthly payments or one monthly payment for each year of residence in the property, according to the reference rent price set by the state system.
You may also like
