How Much Can Your Rent Go Up in Spain in 2026 and 2027: the Annual Update and the 2% Cap in Royal Decree-law 29/2026, with Examples

«How much can my rent go up?» is one of the questions people have been asking most since the Boletín Oficial del Estado (BOE, Spain's official gazette) published Real Decreto-ley 29/2026 (Royal Decree-law 29/2026) on 7 October 2026. Among other measures, the decree caps the annual rent update: until 31 December 2027, unless landlord and tenant agree otherwise, the increase cannot exceed 2%, and if the rent is already above the limit set by the reference price index, it cannot go up at all.

As of 22 October 2026, we explain, law in hand, how the annual update works, which index applies to your contract (the INE's IRAV or the IPC, Spain's consumer price index), what happens if the contract says nothing, what applies to contracts signed before May 2023, to seasonal (temporary) lets and to room rentals, how much a rent of €900, €1,200 and €1,500 goes up in euros, how the increase must be notified and what would happen if the decree is not ratified in the vote expected on 12 November.

How much can your rent go up: the short answer

• It can only go up if the contract provides for an update. If it says nothing, the rent is not updated (Article 18 of the Ley de Arrendamientos Urbanos, LAU, Spain's Urban Leases Act).
• Only once a year, on the date each year of the contract is completed.
• For updates falling between 8 October 2026 and 31 December 2027: without a new agreement between the parties, 2% at most (Royal Decree-law 29/2026).
• If the rent already exceeds the applicable maximum under the reference price index system, no increase is allowed.
• In contracts signed on or after 26 May 2023, the increase also cannot exceed the change in the IRAV, the INE index, which stood at 2.54% in September 2026.
• The increase can be charged from the month after it is notified in writing, stating the percentage applied.

What Royal Decree-law 29/2026 says about rent updates

The Council of Ministers approved Royal Decree-law 29/2026 on 6 October, the BOE published it on the 7th and it has applied since 8 October 2026. Its sixth final provision is entitled «Extraordinary limitation of the annual rent update of residential leases» and, according to the preamble, it covers annual updates falling between the decree's entry into force and 31 December 2027. It distinguishes two cases: if the rent exceeds the applicable maximum under the reference price index system, no increase is allowed; in all other cases, this rule applies:

…the increase shall be that resulting from a new agreement between the parties and, in the absence thereof, may not exceed two per cent.

Royal Decree-law 29/2026, preamble (our translation)

Note the words «new agreement». The cap does not refer to what the contract said when it was signed, but to a fresh agreement between landlord and tenant. Without one, the increase is capped at 2%, even if the contract clause points to an index that has risen more. The preamble does not distinguish between private landlords and large landlords (grandes tenedores); the March decree, Royal Decree-law 8/2026, did apply the 2% to large landlords even where there was an agreement, according to Derecho Local.

This is the third time in 2026 that a cap like this has been set. Royal Decree-law 8/2026 applied it from 22 March, but Congress did not ratify it on 28 April, by 166 votes in favour and 177 against, according to PwC. Royal Decree-law 26/2026 included it again and was in force on 1 October, until Congress declined to ratify it the next day. Royal Decree-law 29/2026 brings it back. As a result, updates falling between late April and early October 2026 were not subject to the 2% cap; the current one applies to updates falling on or after 8 October.

How the annual update works under Article 18 of the LAU

Article 18 of the LAU is the basic rule. While the contract is in force, the rent can only be updated on the date each year is completed, at the request of the landlord or the tenant, and on the agreed terms. If nothing was agreed, there is no increase: «In the absence of an express agreement, no rent update shall apply to contracts». In other words, if your contract has no update clause, the rent stays as it is until the contract ends or a new one is signed.

Royal Decree-law 29/2026 amended paragraph 1 of that article. Under the current wording, if the contract provides for an update but does not say which index, the annual change in the IRAV is used, and «in any case» the increase cannot exceed that change. The IRAV is the residential rent reference index that the INE (Spain's National Statistics Institute) calculates under the 2023 Housing Act: each month it takes the lowest of the annual change in the headline IPC, the change in core inflation (excluding energy and unprocessed food) and adjusted average rates of both. The latest index published on the update date is the one that counts.

IRAV or IPC: which index applies to your contract

Sources: Urban Leases Act, Article 18 and eleventh additional provision (Iberley); Royal Decree-law 29/2026 (BOE, 7-10-2026); INE, IRAV and IPC for September 2026 (14-10-2026); OCU (29-4-2026). The latest index published on the date of each update is the one used.

Contracts signed before 26 May 2023, when the Housing Act came into force, generally keep the rules they were signed under and are updated with the agreed index, usually the IPC; that is how the consumer organisation OCU summed it up when the March decree lapsed. Royal Decree-law 29/2026 allows them to opt into the extensions in Article 10 of the LAU and, according to its preamble, their updates «shall be subject to the limits laid down in the applicable regulations». The extraordinary 2% cap refers to the annual rent updates of residential leases without distinguishing by signing date, and the legal guides we consulted explain it without making that distinction. With the IPC at 4.9% in September, the difference is large, so if your contract predates May 2023 it is worth having a lawyer review it before applying or accepting an increase above 2%.

Examples: how much a rent of €900, €1,200 and €1,500 goes up

Take a residential contract with an annual update clause, whose anniversary falls between 8 October 2026 and 31 December 2027, with no new agreement between the parties and a rent that does not exceed the reference index limit. This is how much it can rise with the 2% cap, compared with what it would rise by applying the September 2026 IRAV or IPC, the latest published as of 22 October:

Llavely calculation using the Royal Decree-law 29/2026 cap and INE data for September 2026 (IRAV 2.54%, IPC 4.9%). The IRAV and IPC columns show how much the rent would rise without the decree, depending on the contract's index. Indices change every month: what counts is the latest one published on the date of your update.

Over a full year, the maximum 2% increase means €216 more for the €900 rent, €288 for the €1,200 rent and €360 for the €1,500 rent. With the September IPC it would be €529.20, €705.60 and €882 a year; with the IRAV, €274.32, €365.76 and €457.20.

Assumption: both update dates fall between 8-10-2026 and 31-12-2027, the decree remains in force, there is no new agreement and the full 2% is applied each time. The second increase is calculated on the already updated rent. Llavely calculation.

Two caveats. If the IRAV for the relevant month falls below 2%, the IRAV prevails in contracts signed on or after 26 May 2023, because Article 18 says the increase cannot exceed it «in any case». And with a new agreement the parties can agree a different figure, although how such an agreement fits with the IRAV ceiling is one of the open questions raised by lawyers who have analysed the decree; before signing a larger increase, get advice.

If your rent is already above the reference index

The decree bans any increase when the rent exceeds the applicable maximum under the reference price index system. That system belongs to Spain's Ministry of Housing, whose website lets you check, using the address or the cadastral reference (referencia catastral, the property's land registry number), an indicative range for any home. But, as El Español explained on 8 October, that range only works as a legal limit in the stressed housing areas (zonas tensionadas) declared by the regional governments.

At the end of September 2026, no municipality in the Comunidad de Madrid (Madrid region) was on the list of stressed areas published in the BOE, according to TaxDown. How this rule applies outside those areas is not clear from the texts we were able to consult, so if you let in a stressed area or have doubts, review your case with a lawyer. We explain what they are and where in «Stressed rental areas in Spain in 2026».

Seasonal lets and room rentals

Royal Decree-law 29/2026 changes the rules on temporary lets: it requires a real, provable reason, a term of more than 31 days and, as a rule, no more than twelve months. On rent, it sets the IRAV as the limit on increases between successive temporary contracts for the same home and as the limit on their annual update. Whether the 2% cap also covers these contracts is not clear from the texts consulted, and temporary contracts signed before 8 October keep their previous rules until they end, according to lawyers. We cover this in more detail in «Seasonal rentals in Spain in 2026».

For room rentals, the decree states that the total rent of all partial contracts in force at the same time for one home cannot exceed the rent for a contract covering the whole home, and in stressed areas it also refers to the limits in Article 17 of the LAU. When updating each contract, that ceiling must be respected. If the room is the tenant's main home, the prudent course is not to exceed 2% without a new agreement.

How to notify the update: in writing and before the month it applies

The LAU does not as such require one month's notice. What Article 18.2 says is that the updated rent can be charged from the month after the one in which it is notified in writing, stating the percentage applied and, if the tenant asks, with the INE certificate. In practice, to charge it from the anniversary month, you need to notify it during the previous month. And if nobody notifies it, it does not apply: the law says the update happens at the request of one of the parties.

Notification given by a note on the receipt for the preceding monthly payment shall be valid.

Urban Leases Act, Article 18.2 (our translation)

• Use a method that leaves a record: burofax (a certified letter with proof of content), email with acknowledgement of receipt if your contract allows it, or a note on the previous month's receipt.
• State the percentage and how you calculated it: the contract's index, the reference month and the 2% cap.
• Write down the current rent, the new rent and the month from which it applies.
• Keep a copy and proof of sending.
• If you are a tenant, check the calculation against the latest published index and, if you disagree, reply in writing.

Template letter to notify the rent update

What happens on 12 November if the decree is ratified or not

A royal decree-law comes into force before it goes through Congress, but it must be ratified (convalidado). With parliament dissolved, the vote falls to the Diputación Permanente (Standing Committee) of Congress and, as of 22 October 2026, it is expected on 12 November, according to the press. If it is ratified, the 2% cap continues to apply until 31 December 2027, unless it is later processed as a bill and its wording changes.

If it is not ratified, the decree is repealed from the moment the BOE publishes the resolution, as happened with 8/2026 in April and 26/2026 in October. From then on, updates would go back to the ordinary rules: whatever the contract says, with the IRAV as the maximum for contracts signed on or after 26 May 2023 and the agreed index, usually the IPC, for earlier ones. The decree's amendment to Article 18 would also lapse.

And the increases applied while it was in force? When the March decree lapsed, PwC noted that the repeal is without prejudice to the effects already produced while it was in force. Situations caught halfway, such as an update notified before and charged after, may raise questions. We go through the scenarios in «Spain's Housing Decrees Vote on 12 November 2026: What Is Being Voted On, What Is Already in Force and What Happens to Your Rental If They Fall».

What to do before your next update

• Look for the update clause in the contract: if there isn't one, there is no increase.
• Note the signing date (before or after 26 May 2023) and the anniversary date.
• Check the latest IRAV or IPC published by the INE on the update date.
• Apply the lower of the relevant index and 2%, unless there is a new written agreement.
• If the home is in a stressed area, check the reference price index before raising the rent.
• Notify the increase in writing the month before and keep proof.
• On 12 November, check whether the decree is ratified: if not, later updates go back to the ordinary rules.
• If you plan to sign a new contract, the last updated rent is the benchmark for the income tax (IRPF) reduction we explain in «Spain's 100% Income Tax Reduction for Landlords Who Cut the Rent by More Than 5%».

Llavely and renting

A well-handled update starts with a clear contract and knowing who you are signing with. That is why Llavely is renting the other way round: tenants create their verified profile once, with their identity and income checked (if anything doesn’t add up, a member of our team reviews it), and it is landlords and agencies who invite them to view their property. It is free for tenants, landlords and agencies, with every feature; for tenants, it is always free.

Let's be honest: no platform decides how much a rent can go up; that is set by the law and the contract. What we do is make sure landlord and tenant start with verified information and clear terms from day one. Rentals are already open in the provinces of Madrid and Barcelona: if you are looking for a flat, create your profile for free; if you are a landlord or an agency, list your property for free. You can paste the text of the listing you already have, and a member of our team checks every property in under 24 hours before it goes live. In the rest of Spain there is a waiting list: sign up with your areas and we will email you when we open there. And if you are thinking of selling a home in the Madrid region, you can already do so with us for 2.5% + VAT, only if you sell, and request your free valuation.

Frequently asked questions

Sources

1. Real Decreto-ley 29/2026 (Royal Decree-law 29/2026) of 6 October on urgent measures to protect the social function of housing and expand the supply of affordable housing, consolidated text (BOE, 7 October 2026)
2. BOE-A-2026-20823, Royal Decree-law 29/2026, record and text on the BOE website (in force from 8 October 2026)
3. Article 18 of the Ley de Arrendamientos Urbanos (Urban Leases Act): rent updates, as worded by Royal Decree-law 29/2026 (Iberley)
4. Eleventh additional provision of the Urban Leases Act: reference index for the annual update of residential leases (Iberley)
5. Índice de referencia de arrendamientos de vivienda (IRAV, residential rent reference index), latest data: September 2026 (INE, 14 October 2026)
6. Consumer Price Index (IPC), September 2026, press release (INE, 14 October 2026)
7. Main tax changes introduced by Royal Decree-law 29/2026 of 6 October (Agencia Tributaria, October 2026)
8. Extraordinary measures on residential lettings: Royal Decree-law 8/2026 of 20 March (Derecho Local, March 2026)
9. Congress repeals Royal Decree-law 8/2026: end of the extraordinary extension of residential leases (Periscopio Fiscal y Legal, PwC, 29 April 2026)
10. The rental decree falls: how does it affect tenants and landlords? (OCU, 29 April 2026)
11. Congress will vote on the housing decrees on 12 November: key points of a session between the general strike and the 29 November election (Moncloa.com, 17 October 2026)
12. Rent updates: IRAV and limits (The Juris, updated 19 October 2026)
13. Royal Decree-law 29/2026: what changes in lettings (ALY Abogados, October 2026)
14. The Government opens a website to check how much you should pay in rent: State Rental Price Reference System (El Español, 8 October 2026)
15. Stressed housing areas: what they are, where they are and how to check if your home is in one (TaxDown, updated 13 October 2026)