Spain prepares third housing law overhaul in months via emergency decree

The Spanish government plans to approve a new housing package in July through Royal Decree-law. The scenario sounds familiar: in March, a similar decree (8/2026) introduced a two-year extension of rental contracts and capped annual rent increases at 2 per cent. The problem: it lasted just 37 days before parliament rejected it. Now judges and lawyers are grappling with which contracts should be considered valid and what to do with those ending after the decree's repeal.

The new package promises similar measures: expanded tenant protections, rental growth restrictions, tighter rules on seasonal lettings, and a VAT increase on tourist rentals to 21 per cent. On paper, it sounds balanced. In practice, each new restriction pushes landlords from long-term rentals into the tourist segment, which then faces its own tax squeeze. The result: less supply, higher prices, greater uncertainty.

For foreign investors, the signal is clear: political risk attached to Spanish property ownership is rising with each decree. One law may not alarm you, but their accumulation reshapes the investment calculus. If your tolerance for uncertainty has worn thin, it is time to rebalance your portfolio.

Source: Spanish Property Insight