Junts holds key to Spain's seasonal rental fraud bill in Congress

Seasonal rental fraud bill stalls in Congress as Junts holds the balance

The legislative proposal to combat fraudulent use of seasonal and room rentals is entering its decisive phase in the Spanish Congress. Promoted by Sumar, ERC, Bildu, Podemos, and BNG, the bill has accumulated 66 amendments, and its approval hinges on Junts. The text stipulates that a temporary rental lasting more than nine months, or one involving two consecutive contracts, will be considered a standard residential lease, subject to the timelines and extensions of the LAU (Urban Leasing Act).

What the law proposes and which amendments cause tension

The PSOE wants to raise the threshold from nine months to one year; the PNV sets it at ten months. Junts argues against fixing any time limit, stating that the relevance lies in the truthfulness of the reason motivating the contract. The Catalan party also demands excluding room rentals, which Sumar considers a red line. Its Housing spokesperson, Alberto Ibáñez, maintains that regulating one aspect but not the other leaves the problem unsolved, as fraud will continue.

All groups agree that contracts must specify the reason for temporality. Disagreement arises when verifying if that reason is fraudulent: ERC wants liability to fall on the landlord; the PNV asks that landlords state the circumstances in the contract, but that administrations verify them. Bildu goes further, demanding that rent caps in tense areas apply to rooms as well, and that the sum of room rents does not exceed that of the entire dwelling.

Mandatory registration and fines up to €600,000

Sumar and the PSOE want to incorporate into this law the rules for mandatory registration of seasonal, tourist, or room rentals approved by the Ministry of Housing in a royal decree in December 2024. This implies that all rentals must be registered in the ministry's digital single window, platforms cannot market unregistered properties or rooms, and ads must display the reference index price and the last rent paid.

Socialists are using the regulation to develop a sanctioning regime against online platforms (Airbnb, Booking, Vrbo, Rentalia, and Expedia among the most popular), with fines of up to €600,000 for publishing illegal ads. Sanctions for platforms and landlords range from €3,000 for minor infractions to €30,000 for serious ones and €600,000 for very serious ones. The PSOE and its partners agree that seasonal rentals must last at least one month.

The Catalan standoff: price intervention extended to rooms

Catalonia has legally extended price intervention to room rentals, ahead of national regulations. Industry analysis suggests that prices in Barcelona have stopped rising and initial drops are observed, predicting that the removal of tourist rentals in 2028 will deepen this trend. The most aggressive forecast points out that once regulatory loopholes disappear, the rental market will tighten further, leaving only cheap supply, allowing headlines claiming rents have fallen.

The counterpoint comes from those warning that if regulated prices do not compensate owners, they will sell or leave properties empty. The doubt hovering over the debate is whether price caps reduce supply enough to make the market as known disappear. Some recall that rent freeze laws in the 1950s and 60s left the rental stock in ruins for four decades.

Impact on tenants' and investors' pockets

On the other end, owners of tourist housing are calculating the hit. An investor with 30 coastal properties dedicated to summer rentals sees their business threatened. Another owner presents the dilemma: if they sell, they lose 10% ITP (Property Transfer Tax) plus notary and municipal taxes; if they move to an area with price caps, they compete with a hundred families for an apartment where supply is minimal. The question floating is whether limits will lower rents or, conversely, eliminate supply.

The political standoff remains open. Junts holds the key, and its refusal to exclude rooms or set deadlines could topple the text. Meanwhile, the housing law marks its second anniversary with 120,000 fewer apartments for rent and a 26.5% price increase, according to data repeated in discussions. With these ingredients, whatever emerges from Congress is unlikely to please anyone.