· 10 min read
Spain’s New Housing Measures: New opportunities for first-home buyers in Tenerife
Effective from 1 October 2026. Royal Decree-Law 26/2026 establishes these measures; the detailed TU CASA application rules are still pending.
Spain’s new housing measures introduce important changes for property buyers, homeowners, landlords and tenants.
One of the most significant developments for people hoping to buy their first permanent home is the new TU CASA financing mechanism, designed to reduce one of the main barriers to home ownership: the amount of savings needed at the beginning of a property purchase.
At the same time, the legislation introduces substantial changes to residential leases, temporary rentals, room rentals, tenant rights, property-related expenses and taxation.
TU CASA: new support for first-home buyers
TU CASA is intended for people purchasing their first habitual residence with mortgage financing. The programme is designed to complement private mortgage financing and may provide additional public financing of up to the lower of: 20% of the value of the mortgaged property, or €50,000.
The financing is intended to be provided at 0% interest and without commissions. This could be particularly important for people who have sufficient and stable income to meet monthly mortgage payments but have not yet accumulated enough savings for the initial contribution normally required when purchasing a home.
TU CASA is not a €50,000 grant. It is complementary repayable financing alongside a private mortgage. The Government still needs to establish the detailed eligibility requirements, programme limits, application procedure and initial funding allocation.
Properties acquired using TU CASA financing will also remain subject to a maximum resale price, linked primarily to the original acquisition price and adjusted in accordance with the applicable rules.
Why this matters in Tenerife
For many first-time buyers in Tenerife, the biggest obstacle is not necessarily the monthly mortgage payment. The challenge is often having enough capital at the beginning of the purchase to cover the part of the property price not financed by the bank, together with taxes and other transaction costs.
TU CASA is designed to help reduce this initial financing gap. For people who can afford a mortgage but have struggled to build a sufficiently large deposit, this could create a new route towards buying their first permanent home.
Other important housing changes
1. Extraordinary extension of primary residence leases
For qualifying contracts, tenants may request an extension of up to two additional years, applied annually. The tenant must be up to date with rent payments and must have paid regularly during the previous eight months. Exceptions apply, including situations where the landlord has a genuine and legally proven need to recover the property.
2. Rent indexation and increases
Until 31 December 2027, where no new agreement exists between the parties, annual rent increases may not exceed 2%. If the rent already exceeds the applicable maximum under the reference price system, no increase may be applied. Any rent adjustment also requires an explicit contractual clause allowing it.
3. Seasonal and temporary rentals
Temporary rental agreements must specify a genuine and verifiable reason for the temporary stay. The burden of proving this reason rests with the landlord. The duration must generally exceed 31 days and should not exceed 12 months unless the reason for the temporary stay legitimately continues.
Where no genuine reason exists, or where contracts are repeatedly chained together, the tenancy may be treated as a primary residence lease from the beginning.
4. Room rentals and holiday accommodation
Room rentals are now expressly included within housing regulation. Specific rules may limit the total combined rent charged for individual rooms, particularly in stressed housing areas.
For accommodation subject to tourism regulations, a maximum duration of 31 days is established, without prejudice to any shorter period imposed by the competent authority.
5. Expenses that cannot be charged to tenants
Landlords may not pass property-related taxes on to tenants unless the tenant is legally liable for the tax. Estate agency fees and costs related to drafting, renewing or amending the tenancy agreement may not be charged to the tenant, directly or indirectly. Tenants also cannot be required to purchase rent-default insurance.
6. Repairs and maintenance
Tenants may carry out certain necessary repairs and deduct the cost from future rent after providing written notice and a reasonable quotation. If the landlord does not respond within 15 calendar days, or refuses without justification, the tenant may proceed under the conditions established by the legislation.
For temporary rentals, the response period is reduced to five working days.
7. Tenant termination rights
Compensation for early termination is removed where the legal conditions are met. For a primary residence, the tenant may terminate after six months with 30 days’ notice. For a temporary tenancy, the tenant may terminate after one month with 10 days’ notice.
8. Sale of a rented property
Tenants’ rights of first refusal and pre-emption are strengthened. Contractual waivers of these rights are prohibited. The rights may also continue to apply in portfolio sales where the individual property is legally identifiable.
9. Evictions involving vulnerable people
The legislation introduces mechanisms allowing proceedings to be suspended and public authorities to become involved in providing alternative accommodation or addressing outstanding debts. This does not mean that all evictions are automatically suspended.
Application depends on the legal procedure, proven vulnerability and the circumstances of the property owner.
10. Tax changes
Personal income tax reductions relating to residential rental income are modified and may reach 100% of positive net income in certain cases. Municipalities may also introduce IBI surcharges on holiday accommodation in stressed housing areas, subject to local regulations and applicable requirements.
What should buyers and property owners in Tenerife do now?
For first-home buyers, TU CASA could become one of the most practically important measures because it addresses the initial capital requirement that prevents many otherwise mortgage-eligible buyers from entering the market. For landlords and existing property owners, the wider changes are equally important.
Before signing, renewing or terminating a rental agreement, the date, type, clauses and location of the contract should be reviewed carefully, because the new rules do not apply identically to every existing contract.
In Tenerife, national housing legislation must also be considered alongside Canary Islands tourism, housing and local regulations.
Thinking about buying your first home in Tenerife?
If you can afford regular mortgage repayments but the initial deposit has been the main obstacle, the new TU CASA mechanism may create an additional route towards home ownership.
Tenerife Real Estate will continue to follow the implementation of TU CASA and the wider housing reforms and publish updates as the detailed rules become available.