What changes if you rent out in Alicante

I’ve spent the whole week with Spain’s Official State Gazette open in a browser tab, underlining articles like I’m back at university. Several landlords with a rental flat in Alicante have written to me these past few days with the same question, almost word for word: what changes now with my rental? The short answer is quite a lot, and in two separate batches.

The government approved two housing decrees on the same day, October 6, published together the day after, with different dates for entry into force. It’s no coincidence: the package from the end of September never made it through parliamentary validation, so it’s been processed again this week.

How much you can raise the rent from now on

The first decree took effect on October 8 and hits every landlord’s pocket directly. Until December 31, 2027, if your contract is due for its annual update, the increase can’t exceed 2%, unless you and your tenant agree on something else. There’s one exception, and it runs the opposite way from what it sounds like: if your rent already exceeds the reference price index, you can’t raise it at all, not even that 2%, whether or not your municipality is a stressed market area. That stressed market area declaration is a separate matter, which mostly affects the starting price of a new contract, and no municipality in Alicante has it for now.

This adds to the IRAV, the reference index the National Statistics Institute has published since January 2025 to replace the CPI. Until now it only governed contracts signed after May 2023; this decree extends it to older contracts too, so it’s worth checking exactly when your contract turns a year before sending the update letter.

An extra extension of up to two years, if your tenant asks

This same October 8, another measure from the same package takes effect: if your contract’s mandatory extension is about to end before December 31, 2028, your tenant can ask for up to two more years, granted one year at a time. You have to agree to it, unless you need the home for yourself or your family or you reach another arrangement. That said, they can only ask for it if they’ve been paying on time for at least the previous eight months, so a tenant behind on payments can’t use it.

If you rent out short term or by the room

The same October 8 package requires a short term rental to have a real, demonstrable reason (a work posting, studies, renovation at home). Without that reason, the law treats it as a standard rental. And if you rent out individual rooms, what you charge across all of them combined can’t exceed what you’d charge for the whole flat; if you run a shared flat in Alicante, go over your figures before renewing.

The contract no longer ends whenever you decide

This is the deeper change, although it takes effect later, on November 15. Until now, once the mandatory five years were up (seven if you’re a company), giving four months’ notice was enough to end the contract. From that date, the contract renews automatically for the same term if you say nothing, the notice period rises to six months, and if you decide not to renew you’ll have to compensate your tenant.

It works like an insurance policy that renews every year unless you cancel in time, except here the whole lease renews. The compensation is whichever of two amounts is higher: twelve months’ rent based on the official reference price, or one month’s rent per year of residence if that’s larger; with less than twelve years of tenancy, the usual case, you owe the twelve. It doesn’t apply if you need the home for yourself or a close relative, if your tenant already has another place available, or if you sign a new contract.

What your tenant gains, by the way

Although the focus of these two decrees is the landlord, your tenant benefits too in a way they may well ask you about: a 10% deduction on the rent they pay, capped at 1,163 euros a year, for anyone with taxable income below 33,007.20 euros. It isn’t immediate, it will take a while before you see it reflected in a tax return.

Conclusion

What worries me most, with the Gazette open all week, is something we’ve already seen this month: the earlier version of these measures didn’t survive validation and had to be approved all over again. Neither block has gone through that process yet: the vote is October 16. The October 8 one looks set to have the votes it needs; the November 15 one is drawing more pushback from the groups the government needs, so its future is less certain. As a licensed API agent, I’ve spent years managing rentals in Alicante. If you have a flat and want to know what notice period and compensation apply to your contract, I can look into it with you, that’s exactly what managing your rental in Alicante covers. And if you’re wondering whether your property is still a good investment, here’s what I wrote about rental yield in Alicante.

Do you have a contract due for renewal before year end? Tell me what’s still unclear, I’m sure you’re not the only one asking that question this week.