What is rent regulation and when does it apply?
The Housing Law, passed in May 2023, introduced a new system to regulate the price of rents in areas declared to be under stress. This regulation particularly affects large cities and regions with strong tourist pressure, such as the Balearic Islands.
Stressed areas: These are areas where the cost of rent exceeds 30% of the average household income, or where prices have risen by more than 3% per year over the last five years.
Current situation in the Balearic Islands (June 2025)
The Government of the Balearic Islands has already announced its intention to declare stressed areas in municipalities such as:
- Palma
- Ibiza
- Calvià
- Sant Josep
The official declaration depends on economic reports and must be approved by the Ministry of Housing. At present, the only requirement to apply the limitation is that the area is recognised as stressed by official publication.
You can consult the updated list of stressed areas and their reference index on the official website of the Ministry of Housing:
👉 https://www.mivau.gob.es/vivienda/alquila-bien-es-tu-derecho/serpavi
Who is affected by price regulation?
- Small owners (less than 5 dwellings): they can adjust prices according to the previous contract + CPI update + bonuses for improvements or rehabilitation.
- Large landlords (5 or more dwellings in a stressed area): they must set the price according to the state reference index, with no exceptions, except for demonstrable renovations.
How to calculate the legal rent step by step
Assumption 1: I am a small owner
- Take the price of the last contract (e.g. €800/month).
- CPI discount is applied (approx. 3% per annum).
- If you have carried out renovations, you can apply up to 10% more.
Result: 800 € + 3% + 10% = 908 €/month (new maximum allowed).
Scenario 2: I am a big fork
- Access the official index and locate the reference of your municipality or street.
- Use the minimum and maximum values per m2.
- Multiply by the living area of the property.
Example result: 12.45 €/m2 x 80 m2 = 996 €/month (estimated legal price).
See the table of contents at:
👉 https://serpavi.mivau.gob.es/indice-alquiler/
What if I charge more than the legal limit?
You will incur an administrative offence. Fines for exceeding the legal price can range from €3,000 to €90,000, depending on the severity and recidivism.
Frequently Asked Questions (FAQs)
Can I raise the rent if I change tenants?
It depends. If you are in a tensioned zone, you cannot raise it freely. It is only allowed within legal and justified limits.
How do I justify a reform increase?
You need invoices and technical documents proving that you have improved the energy efficiency, accessibility or conservation of the property.
When does it come into force in my municipality?
It depends on whether it has been officially declared a stress zone. You can check with your local council or on the Ministry's website.
What happens if I rent without respecting the index?
You could be fined and be obliged to pay back the overcharge to the tenant.
Conclusion: Get ready to rent legally in 2025!
Rent regulation is not an option, it is the law. As a landlord, being well informed will avoid penalties and allow you to plan profitably. If you are in the Balearics or any other high demand area, it is essential to calculate your prices well.
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