Spain's government plans mortgage tax deduction in new housing decree

The Spanish government is negotiating a new housing decree aimed at securing a parliamentary majority. The draft, still under discussion, would re‑introduce a tax deduction for mortgages on primary residences – a measure championed by the Catalan party Junts and previously eliminated in 2012. The decree also contemplates extending rental contract renewals, regulating seasonal rentals, raising VAT on tourist apartments, and creating tax relief for renters and small landlords. Officials are debating limits on the number of homes eligible for the deduction and special provisions for seniors over 65 who sell their homes to fund care.

Sources say the draft is expected to be presented to the cabinet in July, with parties PSOE, Sumar and other parliamentary groups submitting proposals to incorporate Junts' demands.