Can the rent be increased for improvement works?

Question

José Manuel Alburquerque · Accepted Answer

Yes, but only once the tenancy has lasted five years, or seven if the landlord is a legal entity, such as a company, unless otherwise agreed. The annual increase is the result of applying interest at the statutory rate (“interés legal del dinero”) plus three points to the amount invested, less any subsidies, without exceeding 20 % of the rent. It is charged from the month after the landlord, once the works are finished, gives written notice of the amount with the calculations and a copy of the invoices. Repairs needed to keep the home in good condition do not allow the rent to be increased. How it is calculated The statutory interest rate is set by the budget act and the rate taken is the one in force when the works are completed. In 2026 it is 3,25 %, so, with the three points, the annual rent can rise by 6,25 % of the amount invested. An example: Rent of 800 euros a month, that is, 9.600 euros a year, under a tenancy that has lasted more than five years. Improvement works costing 10.000 euros, with no subsidies, completed in 2026. The increase is 625 euros a year, 6,25 % of 10.000 euros. That is about 52 euros a month. The 20 % cap on the rent would be 1.920 euros a year, so it is not reached. The new rent is 852,08 euros a month. If the work affects several homes in the building, the cost is shared among them according to their ownership share (“cuota de participación”). Improvement or repair An improvement adds something the home did not have, such as heating, a lift or better insulation. A repair restores the home to good condition, such as replacing a broken boiler. It is the landlord's responsibility and does not allow the rent to be increased. During the first five or seven years, the law gives no right to increase the rent for improvements. It is only possible if landlord and tenant agree to it. If the works cannot wait until the end of the tenancy, the landlord must give three months' written notice. If the works affect the tenant significantly, the tenant can decide, within the month following the notice, to terminate the tenancy, which ends two months later. The tenant can also stay on with a rent reduction for the part of the home that cannot be used and with the right to be paid any expenses the works cause. When signing a new tenancy agreement In a stressed residential market area (“zona tensionada”), one of those declared because of high rents, the rent under a new tenancy cannot exceed the previous one. Refurbishment, energy-efficiency or accessibility works completed in the previous two years allow it to be increased by up to 10 %. This is a different rule from the increase during the tenancy. Nor is the increase for improvements during the tenancy the annual update, so it is not affected by the 2 % cap that applies until 31 December 2027.