Spain's housing decree adds tax cuts for landlords and tenants

The Spanish government is set to approve a new housing decree that extends the validity of rental contracts expiring before 30 June 2028, provided tenants request the extension. The draft also introduces tax reductions for landlords who lower rents by at least 5 % upon renewal, with possible cuts of up to 100 % of rental‑income tax, decreasing progressively to 70 % based on tenant age and location. Additional measures tighten controls on short‑term and tourist rentals and aim to shift properties back to long‑term leasing.

The decree faces a tight parliamentary vote. The Sánchez administration is negotiating support from coalition partners Junts, the Basque Nationalist Party (PNV) and Podemos, while also courting the People’s Party (PP). Junts demands fiscal measures, and Podemos opposes the inclusion of a land‑law reform. The outcome will determine whether the housing package, the most extensive since the 2021 Housing Rights Law, can be validated by the Congress.