The Government approves a royal decree-law to safeguard affordable housing

The Government of Spain has approved Royal Decree-Law 29/2026, of October 6, adopting urgent measures for the protection of the social function of housing and the expansion of the affordable housing supply. The regulation was published in the Official State Gazette (Boletín Oficial del Estado) no. 249, of October 7, 2026, in Section I. General Provisions, with the official reference BOE-A-2026-20823. The text is signed by King Felipe R. and countersigned by the President of the Government, Pedro Sánchez Pérez-Castejón, and enters into force on the day following its publication, except for the exceptions established in its eleventh final provision.

Context: a housing emergency with record figures

The statement of motives positions housing as the main problem for Spaniards according to the Sociological Research Center (CIS) and estimates the residential deficit at 750,000 homes, according to the Bank of Spain. Eurostat data indicate that 26.8% of households that rented at market prices in 2025 spent more than 40% of their income on rent payments, eight points above the European Union average. The National Statistics Institute recorded a year-on-year increase in housing prices of 12.9% in the fourth quarter of 2025.

The royal decree-law consists of an explanatory part and a dispositive part structured into six titles, with twenty-one articles, two additional provisions, two transitional provisions, one repealing provision, and eleven final provisions. It is based on Law 12/2023, of May 24, on the right to housing, and on previous measures such as CASA 47, the State Housing Entity, and the State Housing Plan 2026-2030.

Protection against speculation and evictions

• Article 1 limits, until December 31, 2030, the acquisition of housing free of charge or at a price lower than 70% of its market appraisal value by entities dedicated to purchasing real estate or portfolios of non-performing loans and by large holders.
• Article 2 establishes, also until December 31, 2030, the suspension of eviction proceedings for vulnerable persons without housing alternatives.
• Article 5.Two incorporates an extraordinary stay of execution: the competent Administration has a maximum and non-extendable period of two months to offer a housing alternative or pay the amount owed; if this period passes without a solution, the Administration is subrogated into the debtor position of the tenant.
• The status of large holder is accredited through registry certification, with thresholds of more than ten residential properties or more than 1,500 square meters of built area.

Rentals: season, extension, and rent limits

Article 3 modifies Law 29/1994, of November 24, on Urban Leases, to require a real and provable cause for temporary rentals with a duration exceeding thirty-one days and, as a general rule, not exceeding twelve months. The sum of the rents from room-by-room contracts may not exceed the rent of a single contract for the entire dwelling, and passing on real estate management fees to tenants is prohibited.

The fifth final provision establishes an extraordinary extension of certain habitual housing lease contracts, by annual periods and up to a maximum of two additional years. Annual rent updates are extraordinarily limited until December 31, 2027: no increase when the rent exceeds the limit of the reference index system and, in other cases, a cap of 2% in the absence of an agreement.

Taxation and expansion of public housing stock

• In Personal Income Tax (IRPF), a 10% deduction is created for the rental of habitual housing for taxable bases below 33,007.20 euros, and reductions of up to 100% for landlords who are not large holders.
• SOCIMIs (REITs) will be subject to a special tax of 25% on undistributed profits from residential rentals, reducible if their housing stock is affordable.
• City councils may apply IBI (Property Tax) surcharges of up to 50%, 100%, and 150% on properties intended for tourist accommodation in stressed areas.
• The super-reduced VAT rate is applied to protected housing with permanent and indefinite protection, and capital gains on sales to public administrations of up to 800,000 euros are exempt.
• Article 13 creates the Social Impact Housing Fund, with an initial endowment of 400 million euros, and Article 19 creates the TU CASA mechanism, with zero-interest loans of up to 50,000 euros and initial financing of 10 billion euros.
• ICO guarantees are enabled for 2 billion euros for social and affordable rental housing and 280 million for industrialized construction until 2040.

A fifth pillar of the Welfare State

The regulation defines affordable housing as that whose sale or rental price does not exceed 30% of the median income of the household unit in the municipality, and protects the price of CASA 47 homes in successive transfers through their recording in the Property Registry. With these measures, the Executive intends to consolidate housing as the fifth pillar of the Welfare State and halt the loss of public housing stock, an objective that directly affects access to a home for the middle and working classes.

Source: Official State Gazette (BOE), no. 249, October 7, 2026, Sec. I. General Provisions, p. 131850 (official reference: BOE-A-2026-20823).