Spain's extension of rental agreements to bring average savings of 4,341 euros to households

This Thursay will see the voting on the housing decree, which includes the mandatory extension of rental contracts expiring before 2029 until 31 December 2028.

The extension will affect nearly 1.9 billion contracts, but its impact will vary depending on the province. Based on all available data, the average savings per household amounts to 4,341 euros per year, according to the Ministry of Consumer Affairs. However, households could save between 2,000 and 10,000 euros.

First place goes to Malaga, a province heavily affected by rising rental prices. Households here will see the greatest savings thanks to the extension, specifically 10,625 euros per year. Second place goes to the Balearic Islands, another province under particular strain, where the reduction in expenses will amount to 10,090 euros annually.

The region of Madrid completes the top three: across the entire extension period, the average savings reach 9,152 euros per household.

The smallest savings will be in A Coruña (1,760 euros), Huesca (1,811 euros) and Cordoba (2,044 euros). In Catalonia, as this is a region declared as having a strained housing market, the ministry has decided not to estimate the economic impact.

The calculation is based on a simulation developed from the personal income tax household panel, from the institute of fiscal studies and the tax agency, which includes a sample of rentals declared by private landlords in the common tax territory, with data up to 2023.

The analysis compares, during the two years of extension, the amount of the extended rent (with its corresponding updates and legal limits) with that of a new contract, whose rent is estimated based on the change of the offer prices published by Idealista in each province.

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