On 28th December 2022 Royal Decree no. 20/2022, of 27th December, on measures to respond to the economic and social consequences of the war in Ukraine and to support the reconstruction of the island of La Palma and other situations of vulnerability was published.  Among other measures, it provides for an “extraordinary limitation of the annual updating of the rent of housing rental contracts”, which will apply until 31 December 2023 and differentiates between two situations depending on who the lessor is:

If the lessor is not the owner of multiple rental properties, the increase shall be as agreed between the parties; if no new agreement is made, the increase must not exceed the result of applying the annual variation of the competitiveness guarantee index, taking as a reference the last one published on the date the contract is updated.  As of today, the variation between October 2021 and October 2022 has been published, amounting to 8.60%.  However, the INE foresees that when the variation rate of this index exceeds the European Central Bank’s medium-term annual inflation target (2%), this value will be taken as a reference.  Therefore, unless the parties agree otherwise, the increase may not exceed 2%.

Should the lessor be the owner of multiple rental properties – ie more than 10 urban residential properties – the increase shall be that agreed by the parties but will not exceed the annual variation of the competitiveness guarantee index, i.e. 2%.