Parliament passes landmark law to close rent cap loophole

The Catalan Parliament has approved a landmark new law regulating seasonal rentals (between one and 12 months) to prevent landlords from evading rent caps on long-term leases of over a year.

The measure received backing from parties on the left: the Socialists, Esquerra Republicana, Comuns, and CUP.

Pro-independence Junts supported some sections of the law but rejected its central provisions.

The legislation follows a review by the Statutory Guarantees Council, which endorsed most of the text but raised concerns over the automatic renewal of public housing leases in so-called tense housing zones.

The final version approved by Parliament includes several amendments to ensure these leases do not expire prematurely.

"If housing works, the country works"

Housing Minister Sílvia Paneque described the legislation as providing "greater legal clarity" and "guarantees" for citizens, warning that housing instability threatens social cohesion, economic opportunity, and the strength of democracy.

"If housing works, the country works, and this law moves us in that direction," she said.

Opposition parties announced their intention to challenge the law in Spain's Constitutional Court.

Tenants' Union hails law as "first step"

The Sindicat de Llogateres (Tenants' Union), welcomed Parliament's approval of the new law but warned it is only a "first step," calling for the measure to be reinforced at the Spanish Congress in Madrid.

"Today we've taken the first step to close the loophole in seasonal rentals and room lets and prevent these schemes from driving up prices, but this law is not enough on its own," said the union's spokesperson, Txema Escorsa.

Speaking to the press at Parliament on Thursday, Excorsa added that the legislation will only be effective if authorities impose sanctions and carry out inspections against landlords who exploit loopholes to evict tenants.

Escorsa stressed that the legislation "would not have been possible" without the union's efforts, saying that they experience firsthand the indiscriminate rent hikes in seasonal and room rentals.

Looking ahead, Escorsa urged authorities to enforce the law and called on the Spanish government to approve similar regulations in Congress in February, after Junts blocked its passage last year.

Seasonal lets loophole

Under Catalan law, rental contracts fall into three main categories: Airbnb-type short-term lets of less than one month, seasonal rentals lasting between one month and a year, and long-term leases exceeding 12 months.

The new law seeks to close a loophole that had allowed landlords to reclassify long-term units as seasonal rentals to sidestep rent controls.

The introduction of the Spanish housing law in 2023, aimed at protecting long-term leases, led to some unexpected consequences in Barcelona, as Brian Rosa, a researcher and professor at the Autonomous University of Barcelona (UAB), explained to Catalan News earlier this year.

"Landlords strategically decided that they would take advantage of this loophole in regulation between one month and a year and convert what would have been, in many cases, long-term housing units to seasonal lets," Rosa explained. 

"It's certainly true," he says, that landlords were "treating so-called expats as the target market for these leases, which was ultimately reducing the supply and inflating the price of housing."

As well as driving housing inflation overall, this also meant there weren't as many long-term properties on the market, "sometimes forcing people who don't fit the profile of the short-term resident into these much more exploitative contracts, which are oftentimes double the cost of a normal long-term rental," Rosa said.