The rental deposit (fianza) in Spain in 2026: how the LAU deposit system works for landlords and tenants

The Spanish rental deposit, called the fianza, is a mandatory cash payment equal to one month rent for residential tenancies under Article 36.1 of Ley 29/1994 (the LAU). The landlord holds it as security against unpaid rent or damage, and must return it within one month of the tenant leaving. In a major 2026 change, Andalusia’s Ley 5/2025 suppressed the obligation to lodge the fianza with the regional housing agency (AVRA) for contracts from 24 January 2026, meaning landlords in Costa del Sol now hold deposits directly. Madrid, Catalonia and Valencia still require the regional deposit, so the rules a landlord follows depend on where the property sits, not on where the landlord lives.

How much is the fianza under Spanish tenancy law?

Article 36.1 of the LAU fixes the deposit at one monthly rent payment for residential tenancies (arrendamiento de vivienda) and two monthly payments for non-residential use (uso distinto de vivienda), which covers commercial premises, offices and seasonal lets. The amount is calculated on the initial rent and paid in cash at the start of the tenancy.

The deposit is distinct from the first month rent: the tenant pays both when signing. The fianza is not a rent payment in advance but a guarantee held against the tenant’s obligations. Article 36.6 exempts public administrations and social security bodies from the requirement to provide a fianza when rent is paid from their own budgets.

Who holds the deposit: landlord or regional agency?

The LAU’s Disposicion Adicional Tercera allows each autonomous community to require landlords to deposit the fianza with a regional housing authority. The result is a patchwork: Andalusia suppressed its regional deposit in January 2026, while Madrid, Catalonia and Valencia still enforce it. A landlord with properties in more than one region must follow different deposit rules for each.

This creates a bureaucratic layer that most other European rental markets do not have. Where the regional deposit applies, the landlord is the intermediary but the state holds the funds until the contract ends, and the landlord must request the return through the relevant regional model (Modelo 810 in Andalusia’s legacy system, the equivalent form in each community).

How do deposit rules differ across Spain’s autonomous communities?

The four communities most relevant to international landlords handle the fianza differently. Andalusia has removed the regional deposit entirely; the other three still require it, each through a different agency, deadline and penalty regime.

Region	Agency	Regional deposit required?	Deadline to lodge	Late penalty
Andalusia	AVRA (suppressed for new contracts)	No, from 24 January 2026	Not applicable	Not applicable
Madrid	Agencia de Vivienda Social (AVS)	Yes	30 days from signing	Surcharges and fines per regional regulation
Catalonia	INCASOL (Ley 13/1996)	Yes	2 months from signing	Surcharges per Ley 13/1996 Arts 8+
Valencia	Generalitat (Caja de Depositos, Decreto 46/2022)	Yes	30 days from signing	Surcharges per Decreto 46/2022

The statutory fianza amount (one month residential, two non-residential) is set by the national LAU and is the same everywhere. Only the administrative deposit obligation varies by region. In Catalonia, Ley 13/1996 of 29 July governs the INCASOL deposit, and the landlord must request the return within eight days of the contract ending. In Valencia, Decreto 46/2022 of 29 April regulates the Caja de Depositos deposit procedure. In Madrid, the Agencia de Vivienda Social (formerly IVIMA) manages the process at Calle Basilica 23.

For a non-resident landlord with a Costa del Sol property, the Andalusia suppression is a meaningful simplification: no Modelo 806 filing, no AVRA surcharges, no agency return wait. But the same landlord with a Barcelona apartment still faces the full INCASOL procedure.

What changed in Andalusia from 24 January 2026?

The Disposicion Adicional Sexta of Ley 5/2025, de 16 de diciembre, de Vivienda de Andalucía, published as BOE-A-2026-423, suppressed the mandatory deposit of the fianza with the regional administration. According to AVRA’s official guidance, contracts signed from 24 January 2026 inclusive no longer require the landlord to lodge the fianza with AVRA. The landlord holds the deposit directly, as is standard in most of Europe.

For contracts signed before 24 January 2026 where the fianza was already deposited with AVRA, the agency continues to return those deposits on request as the contracts expire. The transition is managed so that pre-existing deposits are not abandoned; they are simply returned through the existing Modelo 810 process as tenancies end.

This is a significant simplification for non-resident landlords with Costa del Sol property. Under the old system, a foreign owner renting out a Marbella apartment had to navigate AVRA’s deposit procedures, face surcharges for late lodging (5, 10, 15 or 20 percent depending on delay), and risk a fine of 50 to 150 percent of the deposit for non-compliance. From 24 January 2026, that administrative burden is gone for new contracts.

What are the practical consequences of the AVRA suppression six months on?

Six months into the new Andalusia regime, the practical effects are settling in for landlords and tenants alike. The most immediate is that landlords no longer need a Spanish bank account configured for AVRA transfers, nor the Modelo 806 filing, to start a tenancy legally. The deposit sits with the landlord throughout the tenancy, which means the landlord must have the discipline to ring-fence the funds rather than commingle them with rental income.

Deposit return disputes no longer go through AVRA. Under the old system, a tenant who disagreed with deductions could escalate to the agency, which acted as an intermediary. Now the landlord and tenant must resolve disputes directly, or through the courts if necessary. This shifts the burden of proof onto the landlord to document the property condition at entry and exit, since there is no agency holding an independent record of the deposit.

Pre-existing AVRA deposits continue their return cycle. Landlords with contracts signed before 24 January 2026 still use Modelo 810 to recover those funds as each tenancy ends. AVRA has not shut down its deposit-return function; it has stopped accepting new deposits. A landlord with a mix of old and new contracts may therefore be handling both regimes simultaneously through 2026 and into 2027 as legacy tenancies expire.

When can the landlord update the deposit amount?

Article 36.2 of the LAU locks the fianza at its original amount during the first five years of the tenancy, or seven years if the landlord is a legal entity (persona juridica), such as a company holding the property. During this period the deposit cannot be increased even if the rent rises through annual index updates.

Once the initial five or seven year period passes and the tenancy continues through annual extensions, the landlord can require the tenant to top up the deposit to match the current rent. Equally, the tenant can ask the landlord to reduce it if the rent has fallen (Article 36.2). After the five or seven year mark, if the parties have not agreed a specific update mechanism, the same update rule applied to the rent is presumed to apply to the deposit (Article 36.3).

How does the 2026 rent update cap interact with the deposit?

Since the Ley 12/2023 reform, the rent update index for contracts signed after 26 May 2023 is the IRAV (Indice de Referencia de Arrendamientos de Vivienda), published by the INE, not the general CPI. For May 2026 the INE reported the IRAV at 2.48 percent annual variation, well below the general CPI of 3.2 percent the same month, as confirmed by the Ministerio de Vivienda y Agenda Urbana’s calculator.

This matters for the deposit because Article 36.3 presumes the rent update mechanism applies to the deposit once the initial lock period ends. A landlord whose rent rises by the IRAV (2.48 percent) at the five or seven year mark can correspondingly increase the fianza by the same percentage. The cap on rent increases thus indirectly caps the deposit increase, keeping the deposit proportional to the updated rent rather than allowing a larger jump.

For contracts signed before 26 May 2023 that still reference CPI, the general index applies. The key point for a landlord is to identify which index governs the contract before adjusting either the rent or the deposit, because applying the wrong index invalidates the update.

How and when must the deposit be returned?

Article 36.4 of the LAU sets the return rule: the landlord must return the cash balance of the fianza to the tenant at the end of the tenancy. If the landlord does not return it within one month of the tenant handing over the keys, the outstanding balance accrues legal interest (interes legal del dinero) from that date.

In regions where the deposit was held by a housing agency, the same one-month return window applies from the date the landlord requests the return. If the agency fails to return within one month of the contract ending, the deposit also accrues legal interest (Disposicion Adicional Tercera, paragraph 1).

The landlord can deduct from the deposit for: unpaid rent, unpaid utility bills, damage beyond normal wear and tear, and cleaning costs if the property is left in poor condition. The landlord must provide an itemised account of any deductions. Normal wear from ordinary use of the property cannot be charged against the fianza.

What is the legal standard for deposit deductions?

The line between deductible damage and non-deductible normal wear is the most common deposit dispute. Spanish tenancy practice, drawing on Article 36.4 and consumer-protection principles, applies a standard of ordinary use: the tenant is liable for damage that exceeds what reasonable habitation would produce, but not for the gradual deterioration that any lived-in property suffers.

Typical deductible items include broken fixtures beyond their useful life, burns or stains on flooring, holes in walls beyond picture-hook wear, and missing or damaged appliances. Typical non-deductible items include wall paint fading, minor scuffs on doors, carpet wear in traffic areas, and appliance failure from age rather than misuse. Unpaid rent and utility bills are always deductible, as are cleaning costs if the property is returned in a state requiring professional cleaning beyond ordinary tidying.

The landlord should document the property condition with a dated entry inventory and exit inspection, with photographs. Without this evidence, a tenant’s challenge to a deduction is harder for the landlord to defend in a regional housing office or a court.

Can the landlord ask for additional security beyond the fianza?

Article 36.5 of the LAU permits the parties to agree any type of additional guarantee for the tenant’s obligations, on top of the statutory cash fianza. This includes bank guarantees (aval bancario), additional months of deposit, or insurance products.

The Ley 12/2023 reform added a cap: for residential contracts up to five years, or seven years if the landlord is a legal entity, the value of any additional guarantee cannot exceed two monthly rents. This means a landlord can legally hold up to three months total (one statutory fianza plus two additional) for a residential tenancy within the initial lock period. The statutory one-month fianza itself is not affected by this cap; it applies only to the additional layer.

Some regional regulations and areas designated as zonas tensionadas under Ley 12/2023 may impose further limits. Landlords should check the current regional rules before demanding multiple months of deposit, as the legal landscape has shifted with the 2023 and 2025 reforms.

Deposit return worked example: a EUR 1,500 Marbella tenancy

A tenant rents a Marbella apartment for EUR 1,500 per month. The fianza is EUR 1,500, paid at signing. The tenancy runs for two years. At the end:

• The tenant hands over the keys on 30 June.
• The landlord inspects the property against the entry inventory and finds EUR 120 of damage beyond normal wear (a broken blind, a stained mattress) and EUR 80 of unpaid water bills.
• The landlord returns EUR 1,300 (EUR 1,500 minus EUR 200 of deductions) within the one-month window, with an itemised list and photographs.
• If the landlord returns nothing by 31 July, the full EUR 1,500 (minus justified deductions) accrues legal interest from 1 August.

Under the pre-2026 Andalusia system, the landlord would have requested the EUR 1,500 back from AVRA using Modelo 810, and AVRA would have had one month to return it. From 24 January 2026, the landlord holds the EUR 1,500 throughout and returns it directly. The deduction standard (damage beyond normal wear, itemised account, photographic evidence) is the same either way; only the holding mechanism changed.

How the fianza interacts with your other Spanish property obligations

The fianza is one part of the rental compliance picture for non-resident landlords. If you rent out a Costa del Sol property, you also need to:

• Declare rental income under the IRNR (non-resident income tax) via Modelo 210, at 19 percent for EU/EEA residents or 24 percent for non-EU. See our non-resident rental income tax guide.
• Comply with the LAU tenancy framework on duration, rent updates and tenant rights. See our Spanish tenancy law guide.
• Follow the express eviction process if the tenant stops paying. See our eviction process guide.
• Budget for community fees if the property is in a building with a comunidad de propietarios. See our community fees guide.

For the full rental lifecycle, including tenant sourcing, tax registration and seasonal vs long-term decisions, see our renting out property as a non-resident guide.

Deposit rules for short-term and seasonal lets

The LAU distinguishes between arrendamiento de vivienda (residential, the main home) and uso distinto de vivienda (seasonal, temporary, commercial). For seasonal and temporary lets, the deposit is two months rent under Article 36.1.

However, tourist short-term lets (viviendas de uso turistico, VUT) fall outside the LAU entirely: they are regulated under the regional tourist framework, not the tenancy law. In Andalusia, the Decreto-ley 1/2025 added a town-hall authorisation layer and a 60 percent community approval requirement for new VUT registrations. The fianza rules in this article apply to LAU-regulated tenancies, not to tourist lets, which typically operate on a booking-deposit model set by the platform or the owner.

Key differences: the fianza before and after Andalusia’s 2026 reform

Aspect	Before 24 January 2026 (Andalusia)	From 24 January 2026 (Andalusia)
Who holds the deposit	AVRA (regional housing agency)	The landlord directly
Deposit procedure	Modelo 806 within 1 month of signing	No deposit required
Return procedure	Modelo 810 request to AVRA	Landlord returns directly
Late deposit surcharge	5, 10, 15 or 20 percent	Not applicable
Non-deposit penalty	50 to 150 percent fine (grave infringement)	Not applicable
Return timeline	1 month from AVRA request	1 month from key handover
Interest on late return	Legal interest after 1 month	Legal interest after 1 month

The statutory fianza amount (one month for residential, two for non-residential) and the Article 36.4 return-with-interest rule remain unchanged. Only the administrative deposit obligation with the regional agency has been removed.