Commercial Rental in the Basque Country: Overview

Leasing commercial property in the Basque Country (offices in Bilbao, retail in Donostia-San Sebastián, or industrial warehouses in Vitoria-Gasteiz) operates under a significantly different legal regime than residential housing. While residential tenants are heavily protected by mandatory laws, commercial B2B relationships are governed by the principle of Freedom of Contract.

1. The Hierarchy of Commercial Law (Art. 4.3 LAU)

Commercial leases (arrendamientos para uso distinto del de vivienda) follow a strict hierarchy of norms:

1. The Contract: The clauses signed by the landlord and tenant are the primary law.
2. Title III of the LAU: Mandatory rules for deposits and certain termination rights.
3. Spanish Civil Code: Applies as a fallback for matters not covered in the contract or the LAU.

This allows landlords in Euskadi to negotiate "Net Leases" (where the tenant pays for all repairs, taxes, and community fees) and flexible durations that do not follow the mandatory 5/7 year extensions of residential housing.

2. Key Differences from Residential Leases

• Security Deposit: You MUST collect exactly two months' rent as a legal fianza (Art. 36 LAU).
• Rent Increases: There are no 3% caps. Rent is updated annually according to the IPC or any other index agreed upon in the contract.
• Termination: The lease ends on the agreed date. If the tenant stays and the landlord doesn't object for 15 days, a "Tácita Reconducción" (implied renewal) occurs on a month-to-month or year-to-year basis.

3. Basque Regional Obligations: Bizilagun and Taxes

Despite the freedom of contract, Euskadi imposes strict administrative duties:

• Mandatory Deposit Lodgment: You must lodge the 2-month legal fianza with Bizilagun within 30 days of signing. Failure to do so can result in fines up to €3,000.
• Foral Tax Retentions: In the Basque Country (Bizkaia, Gipuzkoa, and Araba), corporate tenants or self-employed individuals must retain 19% of the rent as IRPF/IS withholding and pay it to the corresponding Hacienda Foral every quarter.
• VAT (IVA): Commercial rent is subject to 21% VAT, which the landlord must declare quarterly even if the rent has not been collected (Accrual basis).

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