Spain’s Congress of Deputies rejected both of the government’s housing decree-laws on Friday 2 October 2026, undoing a package of rent controls, tourist-let taxes and tenant protections that had been in force for only days. Both resolutions ordering the derogation were published the same day in Spain’s official state gazette, the Boletín Oficial del Estado, which is what makes the outcome final rather than a matter of debate.
For anyone buying, letting or advising on Spanish property, this is not a footnote. The housing decree that would have capped rent rises, taxed short-term tourist rentals and given tenants a stronger right to renew is gone, and the market returns to the framework that applied before the two norms were rushed through. Political fallout, including open talk of a snap general election, may shape the buying climate as much as the legal change does.
How Spain’s Congress Voted Down Both Decrees
Real Decreto-ley 26/2026 was defeated by 178 votes to 172, with PP, Vox, Junts and UPN voting against and PSOE, Sumar, PNV, ERC, Bildu and the Mixed Group in favour. Real Decreto-ley 27/2026 fell more heavily at 184 to 166, with PP, Vox, PNV, Junts, Coalición Canaria and UPN against. Both had been approved by the Council of Ministers only days earlier through the urgent decree route, which is why they reached the floor as decrees rather than as ordinary bills.
Under article 86.2 of the Spanish Constitution, Congress has to ratify or reject a decree-law within a month, and rejection means derogation. That is exactly what happened. A second official resolution confirms that the stability-of-rental-contracts decree entered into force on 2 October and was annulled the same day. As EFE reported, the text that introduced automatic contract renewal had been alive for barely sixteen hours.
The Rent Caps and Tourist Let Tax That Fall
The first decree bundled several measures that agents had already started to explain to clients, and all of them now have no legal effect. What was lost runs from the rent ceiling to the support scheme for first-time buyers, and the list below sets it out.
- A two-year extraordinary extension for rental contracts ending before 31 December 2028, for tenants up to date with payments
- A 2 per cent ceiling on annual rent increases for existing contracts until the end of 2027
- A suspension of evictions of vulnerable people without alternative housing until 31 December 2030
- A 10 per cent VAT charge on tourist rentals, which had been exempt
- New rules for seasonal and room rentals, plus tax incentives for landlords who cut rents outside stressed areas
- Higher IBI surcharges that councils could apply to tourist flats and long-term empty homes
- The TU CASA scheme, offering state-backed zero-interest financing of up to 20 per cent of a home’s value, capped at 50,000 euros
A second decree was narrower but sharper for landlords. It would have required a landlord who did not renew a rental contract without a justified cause to compensate the tenant with the equivalent of twelve months’ rent, and it extended the justified-reason requirement to five years for an individual landlord and seven for a company. It also raised the landlord’s notice period for non-renewal from four months to six, while keeping the tenant’s at two.
| Decree | Main subject | Vote | Outcome |
|---|---|---|---|
| Real Decreto-ley 26/2026 | Rent cap, tourist rentals, evictions, TU CASA | 178 against, 172 for | Derogated |
| Real Decreto-ley 27/2026 | Stability of rental contracts, compensation | 184 against, 166 for | Derogated |
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What the Rejection Means for Buyers and Tenants
In practice this is a return to the rules that were in place on 28 September. Existing rental contracts keep the annual update mechanism they had before the decree, which for many means the previous index rather than a hard 2 per cent cap. Landlords regain the freedom not to renew at the end of the minimum term without paying the twelve-month compensation the second decree would have imposed, and the six-month notice rule does not apply.
For buyers, the loss of the TU CASA guarantee scheme removes a tool that would have helped first-time purchasers with the deposit and the first slice of a mortgage. Little changes for the tourist-let owner in the short term, beyond the disappearance of the planned property tax pressure through VAT and IBI surcharges. For a foreign buyer the deeper message is that Spain’s housing rules can now move fast in both directions, so a purchase decision should rest on the underlying market rather than on tax treatment that a single parliamentary vote can remove.
Where Spanish Housing Policy Goes From Here
The government has said it will keep pushing measures and has hinted at reworking the package, but the arithmetic that defeated the decrees has not changed, so a repeat vote would likely fail the same way. Opposition parties have instead pushed for an early general election, and the Prime Minister has been reported to be weighing a November date. Until a new majority exists, the housing file is frozen rather than advanced.
Above the national fight, Brussels is moving on its own track. The European Commission put forward a proposal for an Affordable Housing Law in September, aimed at short-term letting and speculation, which would give Spain a second route to regulate if the national one stalls. The housing crisis that drove the decrees has not gone away, and the protest movement that followed the eviction of an 87-year-old Madrid resident in September is still active. For agents, the practical reading is that the pressure for regulation remains, even if this particular package is dead.
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What Agents Should Tell Clients This Week
For a client, the honest line is that nothing the decrees promised is now law, and that any advice given on the assumption they would pass needs to be revisited. A short checklist keeps the conversation grounded.
- Confirm the contractual index that applies to an existing rental now that the 2 per cent cap is gone
- Explain that the twelve-month compensation for non-renewal is not in force
- Note that the planned 10 per cent VAT on tourist rentals has been dropped, so there is no change to pricing on that basis yet
- Tell first-time buyers that the TU CASA zero-interest support is not available because the decree was rejected
- Flag the political risk: a new package or an early election could reopen all of this within months
Questions Agents Ask About Spain’s Housing Vote
Did the housing decrees become law?
No. Both decree-laws were rejected by Congress on 2 October 2026 and the resolutions ordering their derogation were published in the BOE the same day. None of the rules they contained took lasting effect.
Is there still a cap on rent increases in Spain?
The new 2 per cent ceiling was part of the rejected package, so it does not apply. Existing contracts revert to the update mechanism in the Ley de Arrendamientos Urbanos that applied before the decree, which is not a fixed national cap.
What happened to the tax on tourist rentals?
The proposed 10 per cent VAT on tourist rentals fell with the first decree and does not apply. Holiday lets keep their previous VAT treatment for now.
Do tenants still have to be compensated if a landlord does not renew?
No. Both the twelve-month compensation and the justified-reason requirement sat in the second decree, which Congress also rejected. Renewal follows the rules that applied before the decrees.
Will Spain try to pass housing rules again?
The government says it will keep working on the issue and the European Commission has proposed its own Affordable Housing Law. A fresh national attempt would need a different majority in Congress, or an election.
