Housing: decree-laws approved again

On Friday 2 October 2026 the Congress of Deputies repealed Royal Decree-Laws 26/2026 and 27/2026, approved on 29 September. Both rules ceased to have effect that same day. On Monday the 5th the prime minister called a general election, and Royal Decree 806/2026, published in the gazette on the 6th, dissolved the Cortes and set the poll for 29 November.

On Tuesday 6 October the Council of Ministers approved two new royal decree-laws that keep the substance of the earlier ones: 28/2026, on the stability of habitual-residence rental contracts, and 29/2026, on the social function of housing and the expansion of affordable supply. They were published in the gazette on 7 October. With the Cortes dissolved, their validation falls to the Permanent Deputation, a body of 69 members, and the rules set a maximum of thirty days for them to be put to a vote.

Against speculation and evictions

Article 1 of Royal Decree-Law 29/2026 limits, until 31 December 2030, the acquisition of homes for consideration below 70 % of market value, set by an independent appraisal firm, by entities that buy properties or non-performing mortgage portfolios at a price clearly below their appraised value, and by legal-person large holders and their group. There are exceptions, such as use as affordable or social housing until 2030, as socio-health residences or for victims of gender violence, and adherence to a Code of Good Practice that the Council of Ministers has yet to approve.

Article 2 suspends, until 31 December 2030, evictions of vulnerable people with no housing alternative when the claimant is one of those entities. For other claimants, the court will ask the competent administration for a report on the resources available and may suspend the case until measures are taken.

Taxes: income tax, VAT and SOCIMIs

For personal income tax, the positive net income from housing rentals is reduced on a scale: from 100 % in the most favourable cases, such as cutting the rent by more than 5 % from the previous contract, to lower percentages (95 %, 90 %, 85 %, 70 % or 50 %) depending on the tense-market zone, the tenant’s age and the rent, and 15 % to 40 % if the rent rises. Those who are large holders are excluded.

With effect from 1 December 2026, the letting of furnished apartments for up to 30 nights or with hotel-type services is placed under the 10 % reduced VAT rate. SOCIMIs will pay a special levy of 15 % on undistributed profits from income that has not been taxed at the general rate, rising to 25 % if it comes from housing rentals.

Contract extension and rents

The fifth final provision provides for an extraordinary extension, at the tenant’s request, of up to two additional years in habitual-residence contracts whose compulsory or tacit extension ends before 31 December 2028, provided the tenant has been up to date with payments for eight months, unless the landlord needs the home for himself or relatives or the parties agree a rent at least 5 % lower. Until 31 December 2027, the annual rent update may not exceed 2 % absent a new agreement, and no increase applies if the rent is above the reference-index limit.

For owners and investors, the practical message is twofold: the rule has been in force since 8 October, but its validation is pending and several rules depend on formal requirements worth documenting. Before signing, renewing or updating a contract, or buying a home from an entity, consult your adviser on which regime applies to you.

A rule in force that may lapse within weeks calls for documenting today what will have to be proved tomorrow.

This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.