Spanish government plans another housing decree, because the last one worked so well

The Spanish government is preparing another Royal Decree-law on housing this July, with more intervention in the rental market and more uncertainty for landlords. Property owners in Spain might be forgiven for wondering what new surprise awaits them next.

The government has confirmed plans to approve a new housing package in July by Royal Decree-law, a fast-track legislative tool meant for urgent and exceptional situations. Once approved, the decree would take immediate effect, but would still need to be ratified by Parliament within 30 days.

That means, if it is approved towards the end of July, the political battle over its future could drag on until after the summer. In the meantime, landlords and tenants will once again be left trying to work out which rules apply, for how long, and what happens if Parliament later rejects them.

Another decree, another layer of uncertainty

We have been here before.

The previous Royal Decree-law 8/2026, approved in March, included an extraordinary two-year extension for some rental contracts and a 2% cap on annual rent increases. It was in force from 22 March until 28 April, when Parliament refused to ratify it.

That short-lived decree has left a legal mess behind it. Tenants and landlords are now arguing over who was entitled to request the extension, whether requests made during the decree’s brief life still count, and what happens to contracts expiring after the decree was rejected. Lawyers, naturally, are sharpening their pencils.

What the new decree is expected to include

The new package from the Housing Ministry led by Isabel Rodríguez (pictured above) is expected to revisit many of the same ideas, including rental contract extensions, restrictions on annual rent increases, regulation of seasonal and room rentals, tax incentives for landlords who reduce rents, and a requirement for rental contracts to be in writing.

It is also expected to include measures aimed at tourist rentals, including raising VAT on holiday lets to 21%, plus vague promises to boost affordable housing and speed up administration.

The government will present this as a balanced package to lower rents, protect tenants, fight fraud, and increase supply. That is the theory.

The practical effect may be something else entirely: more rules, more confusion, more litigation, and fewer owners willing to put property into the long-term rental market. Spain’s housing shortage will not be solved by making ownership riskier and less predictable, though that does appear to be the chosen experiment.

A regulatory spiral

Every new housing law in Spain seems to create unintended consequences that then require more regulation to fix. Rent controls push properties out of the long-term market, so the government targets seasonal lets. Owners move to tourist rentals, so tourist rentals are taxed and restricted. Investors hesitate, supply falls, rents rise, and the government concludes that still more intervention is needed.

Round and round it goes.

For foreign owners and investors, the wider message is hard to miss. Each individual measure may not be enough to trigger panic, but the cumulative effect is to weaken private property rights and increase the cost, risk, and hassle of owning property in Spain.

Political risk

This is what you might call political risk. Spain remains a wonderful place to live and own a home, but the risk attached to owning property here is ticking up, one regulation at a time. The short-term rental registry debacle is a recent example: more bureaucracy and cost for owners, only for the courts to strike it down. EU membership limits how far Spain can go in weakening property rights, but the direction of travel is not encouraging, especially for foreign owners and investors.

Everyone has a different tolerance for political risk. If yours is wearing thin, and recent developments are bringing forward your decision to sell, the best place to start is with a personalised SPI market report to understand your local market. Fill in the form below to find out more.