Spain's 2026 Housing Decree: Key Changes for Foreign Buyers

Key takeaways

IBI property tax surcharges of up to 150% apply to tourist accommodation in designated areas, but councils must adopt local rules first
Short-term rentals (under 30 nights) face 10% VAT from December 1, in addition to possible IBI increases
TU CASA offers interest-free loans up to €50,000 for first-time buyers, but eligibility rules are still being finalized

What the decree does

A new set of housing measures took effect in Spain on October 8, representing the most substantial overhaul of property rules in years (DW). The executive's stated goal is increasing the supply of affordable homes for residents. Some provisions benefit purchasers and tenants, while others result in increased costs for those owning holiday lets.

Several measures contain staged rollouts or require additional administrative steps before taking full effect.

Higher property taxes for tourist lets

Owners who rent residential property to tourists face elevated municipal bills under the legislation. Article 8 authorizes local authorities in officially designated zones with housing scarcity to apply surcharges on IBI, the annual property tax collected by municipalities.

The additional charge amounts to 50% of the standard IBI bill for a single tourist property. Owners possessing two or more such properties receive a 100% surcharge. Those with four or more properties see the levy increase by 150%. To illustrate, an owner with an €800 IBI bill could be required to pay €1,200 under the 50% increase or €2,000 under the 150% rate.

These higher taxes do not apply automatically across the country. Individual town halls must first pass local tax regulations to implement the surcharge. Property owners should verify whether their municipality has adopted such rules.

Value-added tax on brief stays

Starting December 1, furnished dwellings rented to identical guests for periods up to 30 consecutive nights become liable for 10% value-added tax, known in Spain as IVA.

This obligation does not apply when the rented dwelling constitutes the owner's primary residence. Accommodations providing hotel-type services continue under existing taxation rules.

Landlords may be subject to both the VAT requirement and potential IBI surcharges if their property satisfies both criteria.

Limits on rent increases

Other statutory limitations on rent adjustments remain in effect.

When current rent exceeds the government's reference-price ceiling—a benchmark used in areas subject to rent controls—no upward adjustment is permitted.

Eligible tenants may petition for extensions of up to two years on current lease agreements. Eligibility requires being current on rent payments and having made timely payments throughout the preceding eight months. Exceptions exist when the landlord requires the dwelling for personal use or for qualifying family members.

Regulations on temporary agreements

Fresh fixed-term leases must include a genuine, demonstrable justification for the temporary nature of the occupancy. Absent such justification, the tenant obtains the full protections afforded to main-home renters.

Current fixed-term contracts maintain their prior conditions until the agreed expiration date.

Landlords are prohibited from transferring administrative or contractual preparation fees to tenants, as well as from shifting property tax obligations to renters.

Financial assistance for purchasers

The TU CASA program provides interest-free loans covering as much as 20% of a property's value, with a maximum of €50,000, combined with a conventional mortgage.

Specific qualification requirements remain under development, meaning prospective applicants cannot currently confirm eligibility. Properties acquired through this program will carry permanent restrictions on resale prices.

Spanish income-tax filers meeting certain criteria may claim a deduction equal to 10% of eligible rent payments, subject to income thresholds and other conditions. Landlords receive conditional tax benefits as well.

Tax implications for second homes

From 2027 onward, the method for calculating imputed income on certain unoccupied secondary residences shifts. This refers to notional income that the tax system attributes to properties even when not actually rented.

Residents aged 65 or older who relocate to care facilities or relatives' homes may retain tax advantages when selling their former primary residence.

Political background

The executive branch greenlit these measures following widespread demonstrations addressing Spain's housing shortage (Olive Press). Prime Minister Pedro Sanchez subsequently scheduled an early general election for November 29.

Parliament must ratify the decree within 30 days of its issuance to maintain its validity or it will be invalidated.