The Spanish parliament finally gave the green light to the housing decree. Here’s what the final text includes.
On Thursday November 12th, the Standing Committee of the Congress of Deputies finally ratified one of the two housing decrees approved by the government in October, after previously voting down an earlier pair of housing decrees. This comes after encampments were set up in cities across the country protesting for the right to affordable housing, a general strike on November 11th and a snap election called for November 29th.
They rejected the second decree, promoted by Sumar, which was to do with the automatic renewal of rental contracts and required the landlord to compensate the tenant financially in the event of terminating the contract.
After so many rejections and changes to the decree, here’s what was finally approved in Congress.
READ ALSO: Spanish parliament passes housing measures after protests and strike
Ban on speculative buying
Speculative activity by vulture funds is being tightened. The decree prohibits companies from purchasing properties for less than 70 percent of market price until 2030, with exceptions for properties designated for affordable rental or for vulnerable or socially excluded individuals.
There is an exception for companies that adhere to codes of good practice, however, they may not evict vulnerable people from their properties. The aim is to prevent the purchase of occupied or dilapidated housing for quick and speculative profit.
Protection against evictions
If the regional government cannot offer alternative housing to a vulnerable tenant who cannot pay their rent, they must take over the rental payment to prevent eviction. The government has two months to provide alternative housing or pay the landlord the outstanding debts and legal costs. This situation will be reviewed every 12 months.
Rent caps
Landlords will not be allowed to raise rents if they are priced above the market index. If the price is below this index, the maximum increase between October 8th 2026 and December 31st, 2027 will be two percent.
Aid for the purchase of a first home
The Tu Casa (Your Home) project has been given a new €10 billion budget via the Official Credit Institute (ICO), which is designed to issue loans for people to buy their first home. Loans will cover 20 percent of the property’s value, capped at €50,000 (whichever is lower). Buyers can repay this loan after paying off their mortgage, up to 30 years after receiving the aid, and will do so at 0 percent interest.
Room rental regulation
Room rentals now come under standard residential leases, which means they benefit from the same contract terms and protections. This means a five-year contract from private landlords and seven years from companies. The law also states that the total rent charged for all rooms cannot exceed the total rent for the entire property, and in high-demand areas, they must adhere to established price caps.
Regulation of temporary rentals
Temporary rentals must be justified with evidence proving why the tenant needs to only stay temporarily. The contract must have a minimum term of one month and a maximum of twelve. If the contract doesn’t comply with the terms or contract renewals exceed the one-year limit, the contract will be considered to be a standard residential lease.
Contract extensions
The new decree stipulates that all contracts expiring before December 2028 can request an extraordinary two-year lease extension, provided certain requirements are met. This also applies to contracts that were submitted under the previous decree, which lapsed a month after its approval due to it being rejected in Congress. There are exceptions to this when the landlord needs the property to live in themselves or for a first-degree relative.
READ ALSO: Protesters clash with police in Spain after huge housing rallies
Tax deductions for landlords and tenants
Tenants with a taxable income of up to €33,007 can deduct 10 percent of the rent paid for their primary residence from their income tax.
There are also tax benefits for landlords who reduce rents, maintain contracts with the same tenants, rent for the first time at affordable prices, or make properties available for social programmes. For example, those who rent out at more than five percent below the market price are eligible for a tax credit of up to 100 percent.
The introduction of a social impact fund
A €400 million social impact fund is being established to promote housing development.
VAT on tourist apartments
Tourist apartments of less than 30 nights or less will be taxed at 10 percent VAT, except when renting out one’s primary residence. The decree also modifies several taxes, aimed at discouraging properties from being used as tourist rentals or for those that remain empty. Local councils will be able to apply surcharges to the IBI Property Tax for tourist apartments located in high-demand areas, as well as for empty properties.
Special tax for Real Estate Investment Trusts
Real Estate Investment Trusts will be subject to a special 25 percent tax on undistributed profits from residential rentals. This surcharge will be reduced or eliminated if a significant portion of their properties are designated as affordable rentals.
Public properties will be transferred to Casa 47
The homes that are part of Social Security assets will be transferred to Casa 47, the state-owned public housing company and will form part of the public affordable rental housing stock.
More affordable social housing
The government will allocate €280 million in loan guarantees to boost housing construction until 2040, with shorter repayment periods than usual. It will also provide €2 billion through the ICO (Official Credit Institute) for public and private loans for building social or affordable rental housing.
It’s worth noting, however, that the Partido Popular, in its new manifesto, outlines 249 measures for “national reconstruction”, including repealing the current Housing Law, as well this decree. It also wants to eliminate two measures for intervening in the rental market including “stressed” rental zones and the price reference index.