Housing decree returns in September: rent extension until 2028, levy on socimis and 21% VAT on tourist lets

07/09/2026 – ⏱ 6 min · By Realty Investor Editorial Team

This article is for informational purposes only and does not, under any circumstances, constitute investment advice or a recommendation.

The Spanish political year resumes with an unresolved file that weighs simultaneously on tenants, landlords and developers: the royal decree-law on housing that the Government had planned to approve on 28 July 2026 and that it withdrew from the Council of Ministers' agenda a day earlier for lack of parliamentary support. The Ministry of Housing and Urban Agenda maintains its aim of taking it to a Council of Ministers meeting in September, but as of today there is no confirmed date and no final text. It is, by far, the piece of legislation with the greatest capacity to alter the rules of the Spanish residential market in what remains of the year.

What happened in July and why the decree is still pending

The sequence is relevant to understanding where the file stands. On 28 April 2026 Congress refused to validate Royal Decree-law 8/2026, which contained a 2% cap on rent updates and an extraordinary extension of contracts. When it lapsed, those measures ceased to apply. PSOE and Sumar spent weeks negotiating a new and broader text; on 21 July a draft of some 69 pages circulated and two days later the Executive announced that it would approve it at the last Council of Ministers before August. On 27 July it withdrew it. The official explanation was that a complex text needed more room for negotiation with its investiture partners; the arithmetical explanation is that there were no guaranteed votes for the subsequent validation in Congress.

The extraordinary extension until June 2028

The most cited measure in the draft is an extraordinary extension for main-residence rental contracts expiring before 30 June 2028, applicable at the tenant's written request. According to the estimates used during the process, the potential reach of the measure as a whole—from March 2026 until that date—would be around one and a half million households. It should be stressed that this extension is not in force: it lapsed with RDL 8/2026 on 28 April and, until a new text is approved and validated, contracts are governed by the ordinary extensions of the Urban Leases Act (LAU) and by Law 12/2023.

Seasonal and room rentals within the LAU

The second block affects the arrangements that currently fall outside the main-residence regime. The draft brings seasonal leases into the LAU with a twelve-month limit and the obligation to justify in writing the reason for their temporary nature—holidays, studies, temporary work—; without that justification, the contract would be considered a main-residence lease. Room rentals would be placed on an equal footing with main residences, with five-year contracts, automatic extensions and an express prohibition on the landlord entering the property without notice. It is the point with the greatest potential impact on the flexible rental segment, which has grown strongly in large cities and university towns.

The tax block: socimis, tourist VAT and personal income tax relief

The tax part of the draft is the one that most directly affects capital invested in residential property. It provides for raising VAT on tourist-use housing from 10% to 21%, together with a stricter penalty regime for advertising it on platforms; a surcharge of between 15% and 25% on listed real-estate investment companies (socimis), which can be reduced if they allocate part of their portfolio to social rental; and personal income tax (IRPF) relief for landlords who let at affordable prices, lower the rent or rent to young people. These tax breaks are precisely one of the focal points of disagreement: Junts makes its support conditional on the text incentivising supply and protecting small landlords, while Podemos opposes tax advantages for landlords.

Guarantees, land and pre-emptive purchase rights

The draft also includes ICO guarantee lines of €2,000 million for social housing and €280 million for industrialised construction, the obligation to include the reference price index in all rental listings—also outside the areas declared as stressed—and a pre-emptive purchase right for the tenant when the home they occupy is sold, even if the transaction is carried out en bloc together with other properties. This last point has its own reading for operators that buy entire residential portfolios, because it introduces a right of first refusal that alters the mechanics of block sales.

What is in force today and what is not

The distinction between what has been proposed and what is applicable is the main source of confusion in this file. Today there is no extraordinary extension of contracts; seasonal and room rentals remain outside the LAU; VAT on tourist housing remains at 10%; there is no specific surcharge on socimis; and it is not mandatory to include the reference index in listings. What is in force is the rent cap in municipalities declared stressed residential market areas by the autonomous communities that have requested that declaration under Article 18 of Law 12/2023, and the Rental Housing Update Reference Index (IRAV) published by the INE continues to apply to contracts signed after that law came into force.

The parliamentary arithmetic: approving is not the same as validating

A royal decree-law comes into force when it is published in the BOE, but Congress must validate it within thirty days; if it does not, it lapses with immediate effect. That is exactly what happened on 28 April. Therefore, even if the Council of Ministers approves the text in September, its definitive validity will depend on a subsequent vote in which the Government would need the backing of Junts, ERC, EH Bildu and PNV against the announced opposition of PP and Vox. The known positions are heterogeneous: the PNV has asked for regional powers to be delimited, changes to the Land Law to make municipal planning easier and a separate regulation of seasonal rentals; Junts is calling for supply-side measures; Podemos rejects the block of tax breaks. The outcome, consequently, is not determined either in its timing or in its content.

Why this matters to the real-estate investor

The decree acts on the three variables that determine how residential property behaves: the duration of contracts, the taxation of the different uses and the exit conditions of the investment. The extraordinary extension lengthens the tenant's period of occupancy and reduces turnover, which stabilises rental income flows but limits the ability to bring prices into line with the market. The rise in tourist VAT and the inclusion of seasonal rentals in the LAU would narrow the spread between short-term letting and conventional residential renting, a spread that in recent years has been one of the main drivers of the reallocation of housing between uses in the areas under greatest pressure. The surcharge on socimis affects the holding vehicle most used by institutional capital in Spain. And the tenant's pre-emptive purchase right affects the liquidity of residential portfolios.

There is an additional reading for the development segment. A large part of real-estate crowdfunding activity in Spain is directed at new-build residential and refurbishment, not at holding for rent. The supply measures in the draft—the ICO guarantees, the €280 million for industrialised construction—target that segment, while the demand and rent-containment measures act on the existing rental market. They are two distinct levels that should not be confused when assessing the aggregate effect of the text.

Reading for the investor

The caution here is of a different nature from that of a statistical figure: this is not a published number, but a legislative text that has not been approved, whose final content may differ from the known draft and whose validity would then depend on an uncertain parliamentary validation. Any decision based on the content described would be anticipating a scenario that does not yet exist legally. The precedent of RDL 8/2026, approved and lapsed in less than thirty days, illustrates that approval by the Council of Ministers is not the same as regulatory stability. Past results are no guide to future ones, and any real-estate investment carries risks of illiquidity, default and total or partial loss of capital. At European level, the activity of crowdfunding platforms is governed by Regulation (EU) 2020/1503 and, in Spain, by the implementing and supervisory rules of the CNMV.

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