The extension of rental contracts can save 10,090 euros per household in the Balearic Islands

PalmaThe mandatory extension of rental contracts expiring before 2029 could mean savings of 10,090 euros per household in the Balearic Islands during the two-year extension. This is estimated by the Ministry of Consumer Affairs, which places the archipelago among the territories where the measure will have a higher economic impact, in a context marked by rising housing prices.

The Balearic figure significantly exceeds the national median savings, calculated at 4,341 euros per household. According to the Ministry's estimates, the initiative could affect 1,895,676 rental contracts and benefit nearly 4.9 million people throughout Spain.

The measure is part of the royal decree-law with initiatives regarding housing that will be submitted for a vote in the Permanent Deputation of the Congress of Deputies. The provision is already in force, but it needs parliamentary validation to continue being applied. It establishes that contracts expiring before 2029 may be mandatorily extended until December 31, 2028, maintaining the same contractual conditions.

The Balearic Islands, among the territories with the most savings

The economic impact of the extension varies by territory. The Balearic Islands register an estimated median savings of 10,090 euros per household, above the 9,152 euros in the Community of Madrid.

In Andalusia, the differences between provinces are significant: savings range between 2,044 euros in Córdoba and 10,625 euros in Málaga. In the Valencian Community, it varies between 3,890 euros in Castellón and 8,436 euros in Valencia, while in the Canary Islands it stands between 4,128 euros in Las Palmas and 7,596 euros in Santa Cruz de Tenerife.

In Galicia, savings go from 1,760 euros in A Coruña to 3,455 euros in Lugo. In Aragon, it ranges between 1,811 euros in Huesca and 4,110 euros in Zaragoza, and in Castilla-La Mancha, between 2,987 euros in Albacete and 6,220 euros in Guadalajara. The Ministry has not calculated the impact in Catalonia, because the majority of the territory is declared a stressed residential market zone.

How have the savings been calculated?

To calculate the savings, the Ministry of Consumer Affairs compares the cost of maintaining the current contract for the two-year extension, with the corresponding updates and legal limits, against what signing a new contract would entail. To estimate this second scenario, it has used the rental advertisement prices from Idealista in each province.

The simulation was developed based on the Personal Income Tax (IRPF) Household Panel from the Institute for Fiscal Studies and the Tax Agency, with a sample of rents declared by private landlords up to 2023.

The calculation starts from the assumption that all tenants request the extension. To estimate the number of beneficiaries, the Ministry has used data from the 2025 Living Conditions Survey from the National Statistics Institute (INE), which places the average number of people per household living in market-rate rental housing at 2.59.