Spain implements housing tax reforms and family protections

Spain is undergoing significant changes to housing taxation affecting income tax (IRPF), VAT (IVA), property tax (IBI), and municipal capital gains (plusvalía). Under Decree-Law 29/2026, landlords who are not large-scale owners and sign new contracts with rents at least 5% lower than previous ones may see income reductions between 70% and 100%, depending on the tenant's profile and location. Additionally, a state deduction for tenants has been reinstated for those declaring less than 33,007.20 euros, allowing a 10% deduction on rent paid under specific conditions.

In the region of Castilla y León, legal clarifications have addressed tax benefits for large families. A ruling determined that the reduced 4% tax rate for acquiring a primary residence applies to large families even if the qualifying child is a nasciturus (conceived but not yet born) at the time of the tax accrual, provided the child is subsequently born alive.