6. Housing Politics
Government Party Proposes Rent Freeze And New Clampdown On Tourist Flats
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Spain’s junior coalition partner has unveiled a sweeping plan to freeze rents, restrict tourist accommodation, and tax landlords, in the latest push to tighten control over the housing market.
The proposal comes from Sumar, the hard-left party that shares power with the Socialists (PSOE) in Spain’s coalition government and holds several ministerial posts. Far from being an outside protest group, Sumar is part of the governing bloc — and its latest initiative seeks to move housing policy sharply to the left.
Rent freeze and long-term extensions
Under the draft Royal Decree Law presented by Social Rights Minister Pablo Bustinduy, all rental contracts would be frozen at their current price and automatically extended for three years, including those already in force. In officially designated “strained” areas, leases could be extended by two additional years, creating de facto ten-year tenancies. The rent cap would apply even if ownership of the property changes hands.
New or renewed leases would also have to maintain the same rent level as the previous contract until the government finishes defining stressed areas, introducing a nationwide rent freeze with immediate effect.
Seasonal and room rentals under scrutiny
To curb what the party calls “fraudulent practices,” short-term contracts of under 30 days would automatically be classified as tourist rentals and taxed at 21% VAT. The reform would also extend tenant protections and rent limits to room rentals and so-called “seasonal” lets, which are often used to bypass rent controls.
Taxing owners and restricting speculative purchases
The draft decree proposes a 5% annual tax on real-estate holdings for individuals or companies that own four or more homes, expanding the existing wealth tax on large fortunes. Corporate landlords offering affordable rents, meanwhile, could benefit from a 40% tax reduction.
It would also require that any new home purchased for rental be offered as “affordable housing,” subject to rent limits where applicable — a move that could further restrict the investment market.
Tougher rules for tourist accommodation
The measures would make all short-term rentals of 30 days or less legally “tourist” properties, obliging owners to register them and subjecting them to a tougher sanctioning regime. The aim, according to Bustinduy, is to stamp out the misuse of temporary leases to evade tourist flat regulations.
“These are effective, viable and immediately applicable measures to rescue a housing market hijacked by economic actors profiting at the expense of Spanish families,” said Bustinduy at the press conference.
The proposal highlights growing tension within the coalition over how far the state should intervene in housing — with Sumar pressing for aggressive market controls, while critics warn of yet another blow to private landlords and investment in rental housing.
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Palma’s mayor has announced a sweeping ban on new tourist rental licences of any kind, marking a major shift in the Balearic capital’s housing and tourism policy.
Jaime Martínez, the mayor of Palma, confirmed that the city council will prohibit new tourist rentals in all their forms within the municipal area, according to a news report by Europa Press. The 639 existing legally licensed homes will remain, but no new licences will be granted. The measure is expected to be approved in the next council meeting or the one after, with retroactive effect of three months—meaning new applications are already effectively frozen.
The mayor framed the move as part of Palma’s push for “quality over quantity” in tourism and a bid to contain illegal supply. According to Exceltur data cited by Martínez, Palma has reduced its stock of illegal tourist accommodation by 18% in just two years—well above the 3.7% average among 25 other Spanish cities.
Party boats and hostels next on the list
The clampdown doesn’t stop with private holiday lets. From next year, so-called “party boats” will also be banned from operating along Palma’s seafront, and the council plans to block new hostel openings, encouraging existing ones to convert into other forms of accommodation.
A balancing act between tourism and housing
The measure is likely to ignite debate in Mallorca’s property and tourism sectors. Supporters will argue that tightening tourist rental supply helps restore balance to the local housing market and quality of life for residents. Critics, however, will see it as another blow to property owners and small investors, and a sign that Palma is doubling down on restrictions rather than tackling the underlying shortage of affordable homes.
Spain’s junior coalition partner has unveiled a sweeping plan to freeze rents, restrict tourist accommodation, and tax landlords, in the latest push to tighten control over the housing market.
The proposal comes from Sumar, the hard-left party that shares power with the Socialists (PSOE) in Spain’s coalition government and holds several ministerial posts. Far from being an outside protest group, Sumar is part of the governing bloc — and its latest initiative seeks to move housing policy sharply to the left.
Rent freeze and long-term extensions
Under the draft Royal Decree Law presented by Social Rights Minister Pablo Bustinduy, all rental contracts would be frozen at their current price and automatically extended for three years, including those already in force. In officially designated “strained” areas, leases could be extended by two additional years, creating de facto ten-year tenancies. The rent cap would apply even if ownership of the property changes hands.
New or renewed leases would also have to maintain the same rent level as the previous contract until the government finishes defining stressed areas, introducing a nationwide rent freeze with immediate effect.
Seasonal and room rentals under scrutiny
To curb what the party calls “fraudulent practices,” short-term contracts of under 30 days would automatically be classified as tourist rentals and taxed at 21% VAT. The reform would also extend tenant protections and rent limits to room rentals and so-called “seasonal” lets, which are often used to bypass rent controls.
Taxing owners and restricting speculative purchases
The draft decree proposes a 5% annual tax on real-estate holdings for individuals or companies that own four or more homes, expanding the existing wealth tax on large fortunes. Corporate landlords offering affordable rents, meanwhile, could benefit from a 40% tax reduction.
It would also require that any new home purchased for rental be offered as “affordable housing,” subject to rent limits where applicable — a move that could further restrict the investment market.
Tougher rules for tourist accommodation
The measures would make all short-term rentals of 30 days or less legally “tourist” properties, obliging owners to register them and subjecting them to a tougher sanctioning regime. The aim, according to Bustinduy, is to stamp out the misuse of temporary leases to evade tourist flat regulations.
“These are effective, viable and immediately applicable measures to rescue a housing market hijacked by economic actors profiting at the expense of Spanish families,” said Bustinduy at the press conference.
The proposal highlights growing tension within the coalition over how far the state should intervene in housing — with Sumar pressing for aggressive market controls, while critics warn of yet another blow to private landlords and investment in rental housing.
When politicians run housing projects like vanity parades, the results are as predictable as they are depressing — La Escocesa is just the latest proof.
According to an article in the Spanish paper La Vanguardia, the Poblenou complex of La Escocesa was bought by Barcelona City Hall in 2017 for €10 million under the triumphant banner of fighting gentrification and promoting social housing. Eight years later, the site has been repeatedly occupied, evacuated, boarded up, and left to rot. What was trumpeted as a visionary public project has become, in the paper’s words, “the story of a very expensive fiasco.”
Big promises, small results
In August 2017, the then hard-left Mayoress Ada Colau (now a Gaza activist) proudly announced that the city had acquired three plots of the former La Escocesa factory — 93% of the site — for €10 million. The plan, she declared, was to transform the complex into social housing and public facilities. Nothing has been done since. Years later, the Generalitat has floated the idea of turning it into the future Casa América, another vague plan on the growing pile of unfulfilled promises.
Colau’s tenure was full of such grand gestures. She famously introduced the 30% social-housing quota for all new residential developments, promising it would deliver 300 affordable homes a year. The result? A collapse in new home construction and, according to official figures, just eight homes delivered under the scheme in nearly a decade. Far from solving Barcelona’s housing crisis, her policies have strangled development and made the problem dramatically worse. La Escocesa is simply one more example in a long list of left-wing housing programmes that have proved not just ineffective, but catastrophic for housing access in the city.
Public money, private indifference
This story has become painfully familiar in Barcelona. Politicians make grand claims, spend freely, and take victory laps in front of cameras — only to deliver decay, delay, and disappointment. Instead of hiring competent managers, they reward loyalty and ideological purity. There’s no accountability, no cost control, and no urgency. Nobody ever gets fired for doing a bad job.
In the case of La Escocesa, the city bought a derelict industrial site with great fanfare, boasting that it had stopped a private project of luxury lofts and “saved” the neighbourhood from gentrification. Yet today, it’s still an empty, dangerous ruin — a public embarrassment and a safety hazard. The only thing the city has successfully built there is a monument to bureaucratic incompetence.
What locals are saying
The comments under La Vanguardia’s report make it clear that ordinary Barcelonans are tired of the same political theatre.
One reader noted:
“A couple of weeks ago I saw a TV report about former narcopisos in the Raval. Some, returned to private hands, were already fully renovated and occupied. Others, now owned by the city, remain closed, untouched, waiting for bureaucracy or budget. And yet politicians keep boasting about their great housing projects.”
Another wrote:
“It’s the story of an announced fiasco. The city buys a deteriorated building, makes a show of it, promises social housing and facilities, and ends up doing nothing. The place falls apart, neighbours suffer, and it’s all just another example of municipal mismanagement.”
These voices reflect a growing cynicism about public housing policy — people can see the gap between rhetoric and reality.
The wrong kind of intervention
Calls for more state intervention in the housing market are growing louder, but if the public sector’s track record is any guide, we should be deeply sceptical. The state’s involvement so far has been marked by inefficiency, waste, and moral grandstanding. These projects end up spending vast sums of public money with few beneficiaries while paralysing the private sector that actually builds and maintains most of the homes people live in.
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