Spain’s government has approved two housing decree-laws containing proposed changes for tourist rentals, seasonal lets, shared-flat room rentals and residential contracts, alongside tax measures and first-home buyer support.
The main housing decree, Royal Decree-law 26/2026, was published in Spain’s Official State Gazette, the BOE, on 29 September. It includes provisions on tourist-rental VAT, seasonal and room rental rules, tax relief and affordable housing.
A second decree-law would establish automatic renewal of residential rental contracts. Both measures are scheduled to go to the Congress of Deputies for validation on Friday, 2 October. The proposals depend on parliamentary approval.
Tourist rentals would face 10% VAT
Tourist rentals, which had previously been exempt from VAT, would be subject to 10% VAT under the decree. The housing minister said the measure is intended to prevent properties from being removed from the long-term residential market.
Seasonal lets and room rentals face new rules
The government intends to reform the Urban Leases Act, known in Spain as the LAU, to bring seasonal rentals closer to the framework applied to primary-residence leases, while retaining provisions specific to these contracts.
The same approach would apply to room rentals in shared flats.
The housing minister said the planned regulation would follow work already under way in Congress. It would also include a clause recognising the powers of autonomous communities with their own applicable legislation.
Automatic renewal of residential rental contracts
The second decree-law would introduce automatic renewal of residential rental contracts for an indefinite period.
After a rental agreement has run for five years, it would automatically renew for another similar period. A landlord who does not wish to renew would need to show a justified reason, such as needing to occupy the home.
According to idealista/news, landlords would need to give tenants six months’ notice. They would also need to compensate tenants with the equivalent of 12 months’ rent if they did not renew the contract.
The automatic renewal proposal requires congressional validation before it can remain in force.
Tax relief for tenants and incentives for landlords
The main decree includes proposed tax relief for tenants with annual incomes of up to €33,000. The relief would be graded according to income.
The housing minister said tenants could save up to the equivalent of one month’s rent. The government estimates that the measure could reach 1.6 million households in Spain.
Landlords who lower rents outside areas already declared stressed housing markets would also be eligible for tax incentives.
TU CASA first-home purchase support
The government has also proposed a new first-home buying mechanism called TU CASA.
It is intended for people considered solvent but without enough savings to cover the initial costs of purchasing a first home. The scheme would provide state-backed financing at 0% interest for up to 20% of a property’s value, with a maximum of €50,000.
The decree also includes a super-reduced 4% VAT rate for publicly promoted and protected housing. The government says the measure is intended to encourage construction of affordable residential homes and gradually increase the public housing supply.
Congress vote on 2 October
The two housing decree-laws are scheduled to go before Congress on 2 October 2026. The measures remain subject to parliamentary validation and are not yet settled long-term rules.
