Renting a flat to a company: what changes for the landlord in 2026

Renting a flat to a company is a contract in which the tenant is a legal entity and an employee of that entity lives in the flat. For a resident landlord the most noticeable difference is tax. The reduction of taxable rental income from housing, 50% as the base rate for contracts signed from May 2023 until 1 December 2026 (art. 23.2 LIRPF), is applied by the tax agency to a contract with a company only if the contract names a specific occupant.

Why a contract with a company does not look like an ordinary housing lease

A company fits badly into both categories of the Ley de Arrendamientos Urbanos (LAU, the Urban Leases Act). From 8 October 2026, under Real Decreto-ley 29/2026 (RDL 29/2026, BOE), article 2.1 of the LAU defines a housing lease as a contract whose main purpose is to meet the tenant's own need for a home. A legal entity has no such need: someone else lives in the flat.

Previously, in practice, such contracts were drawn up as a lease for a use other than housing (arrendamiento para uso distinto del de vivienda) under article 3 of the LAU, where the terms are set almost entirely by the text of the contract. The decree-law rewrote article 3.2: contracts whose subject is the residence or accommodation of people no longer fall into that category in any case (consolidated LAU). How to classify the rental of a flat for an employee after that, the courts have not yet said. Congress has not yet validated the decree-law, so before signing, the wording in force is checked with an abogado (lawyer).

Which LAU protections are in question

The rules in question are those of title II of the LAU, which are designed for housing leases. If the contract is recognised as a housing lease, they apply; if not, the term and the rent increases are set by the contract alone.

The ban on demanding non-payment insurance covers any lease under the LAU: title IV of the act applies to all contracts (art. 4.1).

A separate point on extensions. From 15 November 2026, Real Decreto-ley 28/2026 (RDL 28/2026, BOE) amends article 10: after five (seven) years, a housing lease is extended for a further five (seven) years unless the parties give notice that they do not want it, and a landlord who refuses, outside the cases listed in the law, pays the tenant compensation. Congress has not validated this decree-law either. If a contract with a company is ever recognised as a housing lease, these rules will fall on the landlord.

How the landlord's tax depends on the wording of the contract

The tax agency starts from the position that a company cannot "live" in a flat. The AEAT practical guide to the 2024 IRPF (the Spanish personal income tax) (AEAT) says that when a flat is let to a legal entity the reduction generally does not apply, even if the flat is rented "for employees" without a name. The exception, under the TEAC criterion (the central tax tribunal) of 8 September 2016: the contract states from the outset that the flat serves as the home of a specific individual.

For contracts signed after 1 December 2026, RDL 29/2026 tied the reduction to a housing lease under article 2.1 of the LAU and introduced a new scale from 15% to 100%. Earlier contracts, under transitional provision 38 of the IRPF law, remain under the previous wording. Whether the tax agency will carry its approach to company contracts over to the new wording has not yet been clarified.

For a non-resident this question does not arise at all. Rental income is taxed under the IRNR (non-resident income tax) without reductions (art. 24.1 TRLIRNR), at 19% for residents of the EU and EEA and 24% for everyone else (art. 25.1). More in the article on tax on rental income for a non-resident.

Worked example, not a forecast. A resident landlord, net rental income after expenses of 20,000 € a year, contract signed in 2025. If the contract with the company names the occupant and the 50% reduction applies, 10,000 € goes into the tax base. If the contract is drawn up "for employees", the full 20,000 € goes into the base. The difference in tax depends on the landlord's rate; it is calculated by an asesor fiscal (tax adviser).

What to put in the contract with the company

The contract has to cover what the law covers in an ordinary lease.

1. The name of the individual who will live in the flat, and a statement that the flat is intended as that person's home.
2. The procedure for replacing the occupant if the employee leaves the company or moves away, and how the landlord is notified.
3. The term, the conditions for extension and for exit by either party, without relying on the rules written for a private tenant.
4. The index and the date of the annual rent review.
5. The split of utility bills and of the costs of the comunidad de propietarios (owners' association).
6. The deposit and the additional guarantee, taking article 36 of the LAU into account.

How letting works as a whole, from choosing the regime to registering the deposit, is covered in the article on where a landlord should start.

When renting to a company does not fit

The format does not suit a resident landlord for whom the IRPF reduction is a noticeable part of the yield, if the company refuses to name the occupant in the contract. It also does not suit anyone who needs predictability: after the October decree-laws the status of such a contract is disputed, and a mistake can end in an extension of years.

If the company needs a flat for a few months for an assignment, an alquiler temporal (temporary letting) of housing is closer, with its rules on the reason and the term; see mid-term rentals in Barcelona. The tax questions of a non-resident landlord are collected on the page on foreign investor taxes.