Spain's housing decrees: the 16 October vote decides what will apply to your property

Two housing decree-laws have been in Spain's Official Gazette since 7 October. One is in force and raises VAT on tourist lettings to 10% on 1 December; the other, which would make lease extensions all but automatic, will only take effect if it is ratified. The vote is announced for Friday 16 October. What a foreign owner or buyer should take from it, by VINSIX Real Estate Advisory.

Two decrees, two fates

The Council of Ministers approved two decree-laws on 6 October, published in the Official State Gazette of 7 October, reproducing most of the texts Congress repealed on 2 October. Decree-law 29/2026, the general text on the social function of housing, came into force on 8 October and carries the tax measures. Decree-law 28/2026 has a single purpose, the tacit extension of residential leases, and will only take effect on 15 November provided it has been ratified by then.

A decree-law must indeed be ratified within thirty days of publication. With Congress dissolved, that falls to the Diputación Permanente, sixty-nine members exercising the chamber's powers between legislatures. On the count reported in the press, the general text would have 35 votes in favour against 34, while the leases decree would be rejected 34 to 35, the PNV having confirmed its opposition on 6 October. The debate is announced for Friday 16 October at 11 a.m., though the texts are not yet on the published agenda, so the date remains to be confirmed.

What is already law

Three provisions of decree-law 29/2026 matter directly to a foreign investor: 10% VAT on the letting of furnished dwellings wherever hotel-type services are supplied or a single tenant's stay does not exceed thirty nights (article 7), the landlord's own main residence being excluded; the power given to municipalities in designated pressure zones to levy an IBI surcharge on tourist dwellings (articles 8 and 9), for which the decree sets neither rate nor conditions; and the restriction on acquisitions made below 70% of market value by the entities covered (article 1).

• 10% VAT on furnished lettings of thirty nights or fewer: 1 December 2026
• IBI surcharge in pressure zones: a municipal option, with no rate set by the decree
• Acquisitions below 70% of market value by the entities covered: restricted until 31 December 2030
• Suspension of evictions of vulnerable households with no alternative housing: until 31 December 2030

10% VAT: three checks before 1 December

Length of stay first: contracts that stay below the thirty-night threshold fall within the scope of VAT, while a longer lease without hotel services does not. Then services: mid-stay cleaning, a reception desk, breakfast or linen changes bring the transaction into scope even on longer stays. Finally rates: December pricing must be reviewed before it goes on sale and terms and conditions must state whether the price is VAT-inclusive.

That leaves the economics. On a nightly rate of EUR 250 excluding tax, passing the VAT on takes the public price to EUR 275; absorbing it brings net proceeds down to EUR 227.27, a 9.1% fall in gross rental income per night. That decision, more than the text itself, will weigh on the winter season.

What may fall: the extension of leases

Decree-law 28/2026 amends article 10 of the Urban Leases Act: at the end of the five-year contract term, seven where the landlord is a legal person, extension would become tacit and compulsory for periods of five or seven years unless a valid notice of non-continuation is served, with the landlord's notice period rising to six months and compensation due where renewal is refused. This is the text least likely to be ratified. One nuance matters, though: the extraordinary two-year extension, open to a tenant up to date with rent where the contract expires before 31 December 2028, sits in decree 29/2026, the one expected to pass.

What it changes on the Costa del Sol

The Marbella to Estepona corridor is driven by foreign buyers who acquire a second home and let it for part of the year. The 16 October vote changes neither land scarcity nor international demand: it changes the tax treatment of letting and the visibility of lease duration. For a purchase under way, the 10% VAT belongs in the cash-flow plan and the IBI surcharge should be checked with the municipality before signing; for a property already let by the night, revising December rates is the work of these three weeks. Financing, meanwhile, has eased slightly: after peaking at 3.323% on 2 October, 12-month Euribor returned to 3.191% on 13 October, ahead of the European Central Bank meeting on 28 and 29 October.

VINSIX Real Estate Advisory reads this sequence as a normalisation: Spain is aligning tourist letting with the regime for accommodation services, through successive decrees whose life expectancy depends on a dissolved Parliament. In the acquisition financing it structures, Grupo VINSIX S.A., present in Switzerland, France, Spain, the United Kingdom and Paraguay, now builds these regulatory scenarios in alongside the rate curve: a plan calibrated on rental income excluding VAT will not survive 1 December.

Key points

• Decree 29/2026 has been in force since 8 October; 28/2026 would only apply from 15 November, and only if ratified.
• The Diputación Permanente must ratify within thirty days: the debate is announced for Friday 16 October, a date still to be confirmed.
• The 10% VAT on stays of thirty nights or fewer applies from 1 December: December rates and contracts need reviewing now.
• The extraordinary two-year extension sits in the text expected to pass, not in the one expected to fall.

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