The Council of Ministers is scheduled to approve tomorrow, Tuesday, July 28, a new royal decree-law on housing that will include the automatic extension of rental contracts until 2028 and an increase of VAT on tourist apartments to 21%.
The Government is working on a royal decree agreed upon between PSOE and Sumar that will include proposals “supported by various political forces” throughout the legislature, according to the Executive itself. The text will be structured into two blocks.
The first aims to lower prices, provide contract stability, and combat rental fraud. It includes, among other measures:
- The regulation of seasonal and room rentals
- The requirement for contracts to be in writing
- Personal income tax (IRPF) deductions for landlords who lower rent prices
Furthermore, sources from Sumar pointed out that they succeeded in including a new extraordinary extension of up to two years for rental contracts.
This reinforced extension can be requested by tenants whose contracts expire by June 30, 2028, expanding the potential beneficiaries of this measure by nearly one million people. According to Sumar, a total of almost four million people and 1.5 million households could benefit from the extension (from March 21, 2026, to June 30, 2028).
The second block focuses on mobilizing affordable housing and includes:
- Increasing VAT to 21% for tourist apartments
- Administrative streamlining measures
- The reform of the land law (Ley del Suelo)
The new decree-law will include a proposal to negotiate with parliamentary groups on measures to protect vulnerable families, aimed at preventing evictions and ensuring no family is left without alternative housing options.
It remains to be seen whether this new decree-law will gain parliamentary approval, as the measures proposed by Junts conflict with those proposed by Podemos—and both forces are required to pass the decree being finalized by PSOE and Sumar.
