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

Royal Decree-Law 26/2026, of September 29, adopts urgent measures for the protection of the social function of housing and the expansion of the affordable housing supply. The regulation, signed by King Felipe VI and countersigned by the President of the Government, Pedro Sánchez Pérez-Castejón, is published in the Official State Gazette (Boletín Oficial del Estado) no. 241, of September 30, 2026, with the official reference BOE-A-2026-20266. It enters into force on the day following its publication, except for the exceptions established in its eleventh final provision.

The text consists of an explanatory part and a dispositive part structured into six titles, with twenty articles, two additional provisions, two transitional provisions, one repealing provision, and eleven final provisions. The Government justifies the urgency based on the “housing emergency” and the deficit in affordable supply, and places the immediate precedent in Law 12/2023, of May 24, on the right to housing, whose constitutional fit was endorsed in the eight appeals resolved by the Constitutional Court.

Among the data supporting the measure, the preamble cites the following:

• 750,000 homes are needed to address the creation of households over the last fifteen years, according to the Bank of Spain.
• The Housing Price Index of the INE rose from 53.7 at the beginning of 2015 to 107.5 in the first quarter of 2026.
• Public administrations own slightly more than 300,000 of the more than two million protected homes built under democracy.

Protection of the social function and against speculation

Title I temporarily limits certain housing acquisitions, from the date of entry into force until December 31, 2028, by entities whose corporate purpose is to acquire real estate for consideration at a price lower than 70% of its market appraisal value. Excluded are public entities for the promotion and management of social and affordable housing, acquisitions intended for affordable primary residence for at least five years, socio-sanitary residences, and the protection of victims of gender-based violence.

Furthermore, a temporary regime for the suspension of evictions of vulnerable people without housing alternatives is established until December 31, 2030, with compensation when the plaintiffs are natural or legal persons dedicated to affordable rentals. The regulation modifies Law 29/1994, of November 24, on Urban Leases, to require a real and provable cause for temporary leases, set the IRAV as the limit for rent updates, and regulate the partial rental of rooms. It also specifies the status of a large holder: more than ten residential urban properties or more than 1,500 square meters of residential built surface.

Fiscal and tax measures

Title II reforms the Personal Income Tax with net income reductions of 100%, 95%, 90%, 85%, or 70% for new contracts, depending on the continuity of the tenant, the reference rent, the stressed zone, and the age of the tenant. A 10% deduction for the rental of a primary residence is incorporated for taxpayers with a taxable base lower than 33,007.20 euros, with a maximum base of 11,630 euros.

Capital gains from the sale of homes to public entities for social and affordable housing promotion are exempt from taxation until December 31, 2027, if the transfer value is less than 800,000 euros. Regarding VAT, rentals of furnished homes with hotel services or stays not exceeding thirty nights are excluded from the exemption, and the delivery of protected housing with permanent or indefinite qualification is incorporated into the super-reduced rate. In residential market stressed zones, city councils may apply an IBI (Property Tax) surcharge of up to 50%, 100%, or 150% on properties used for tourist accommodations. A special tax of 25% is created on undistributed profits of SOCIMIs (REITs) from residential leasing.

Public Housing Stock and Promotion of Affordable Supply

Title III protects public housing assets and regulates the contribution of properties from the State Heritage and the Social Security to CASA 47, the State Housing Entity, with specific provisions for INVIED, ADIF, the Management of Infrastructure and Equipment of State Security, and the General Treasury of the Social Security. Title IV creates the Social Impact Housing Fund, attached to the Ministry of Housing and Urban Agenda, and defines affordable housing as that whose price does not exceed 30% of the median income of the household unit in the municipality.

Two guarantee lines are articulated: up to 2 billion euros, through agreements with the ICO and a term of up to thirty-five years, to increase the social or affordable rental stock; and up to 280 million euros for SMEs that are manufacturers or developers using industrialized construction, with granting planned until 2040. Article 19 creates the TU CASA mechanism, managed by the ICO, with zero-interest loans and no commissions for the lower amount between 20% of the home’s value and 50,000 euros.

Rentals: Extraordinary Extension and Rent Caps

The fifth final provision allows the tenant to request an extraordinary extension for annual periods of up to two additional years in current primary residence contracts, provided they are up to date with the rent and have been so on a monthly basis during the previous eight months. The sixth final provision limits annual rent updates between the entry into force and December 31, 2027: if the rent exceeds the maximum limit of the reference index system, no increase shall apply and, in other cases, the increase may not exceed 2% in the absence of an agreement.

The impact of the regulation reaches owners, tenants, and developers across the country: it restricts speculative buying, expands protection against eviction, caps rents, and mobilizes land and public financing toward affordable rentals. Its effective application will depend on the regulatory development and agreements with the ICO, as well as the entry into force of the ministerial orders that condition the marketing of the Financia Europa Savings and Investment Account.

Source: Official State Gazette, no. 241, of September 30, 2026, Sec. I. General Provisions, p. 127818 (official reference: BOE-A-2026-20266).