What changes in your budget in year two

Key rules

• Rent increases: Your landlord must follow the lease update clause and the yearly cap, so check any increase before agreeing.
• Renewal fees: Most renewals need two payments: one for the permit and one for the TIE card, each with its own code.
• Setup costs: One-off year-one costs should not repeat, which helps offset higher recurring costs.

Renewal fee amounts and the rent update cap change over time, so confirm both with the Interior ministry or Extranjería and your town hall before acting.

The short version

Your monthly budget in year two is usually lower on setup costs and higher on recurring ones. Plan for three things: a rent update, renewal fees for your residence permit, and your first full tax cycle. The one-off costs of arriving (deposit, agency paperwork, furnishing, first applications) should not repeat.

Rent updates

Your landlord cannot raise the rent by any amount they like. Your lease has an update clause, and any increase must follow it and stay within the yearly cap on residential rent updates. This applies to normal residential leases, not to commercial or seasonal ones.

The cap has changed in recent years: a temporary 3% limit applied until 2024, and from 2025 the update follows a new index published by the national statistics institute, with a ceiling of 2% over the year. For leases signed from 2026, a new reference index is foreseen. Check which rule applies to your lease and the index for your lease's anniversary month with your town hall's consumer office before accepting an increase.

What to do:

• Find the update clause in your lease and note the anniversary date.
• Ask the landlord to put any increase in writing, with the calculation.
• Compare their figure with the current cap before you agree.

Renewal fees

Renewing a residence permit involves a government fee (tasa), paid with modelo 790. For most renewals there are two payments:

• The fee for processing the permit, paid with its own code.
• The fee for issuing the new TIE card, paid with a separate code.

The amount depends on the type of permit and how long it lasts, and it is revised periodically. Check the current figures on the Interior ministry or Extranjería website before you budget. Add any costs for translations, photos or help with the paperwork. The documents list below shows the forms and papers to have ready.

Your first full tax cycle

In year one you probably paid tax for only part of a year. In year two you will go through a full cycle, so set money aside during the year instead of facing one bill. Work out in advance which taxes apply to you and when payments fall due, and ask a registered tax adviser if your income comes from several sources or from abroad.

What falls away

Costs that were one-off in year one should disappear: the deposit, moving and furnishing, first-time applications and registrations. Use the money you save to cover the increases above, and keep a small buffer for fees that change.

A simple year-two check

2. Look up the current renewal fees and when your permit expires.
3. Set aside money monthly for taxes.
4. Remove the one-off year-one costs from your budget.

The questions below answer common worries about rent increases and renewal fees.

Documents you need

• Fee payment form (modelo 790) for the permit renewal, filled in with the code for the permit application

• Fee payment form (modelo 790) for issuing the new TIE card, filled in with the separate card code

• Your lease with its rent update clause, to check any rent increase against the yearly cap

Frequently asked questions

Can my landlord raise the rent by any amount in year two?

No, a landlord on a residential lease cannot raise the rent freely, because yearly updates are capped. The cap is set by an index that the INE (Spain's statistics office) publishes, and from 1 January 2025 it is limited to 2% for the year. Your lease's update clause still applies, but only within that cap. This does not cover commercial or seasonal leases.

Do I pay a government fee when I renew my residence permit?

Yes, renewing a residence permit or card means paying a government fee called a tasa, using form modelo 790. Most renewals involve two payments: one for processing the permit and one for issuing the card (TIE). The amount depends on the type and length of permit, so check the current figure with Extranjería before you budget for it.