Pedro Sánchez has returned a 21-measure housing package to Spain's lawmakers after Congress rejected two decrees on 2 October 2026. The plan covers rent protections and first-home finance, alongside measures to expand housing supply and curb speculative and tourist rentals; several proposed financial amounts still await confirmation in legislation.
Congress rejected two housing decrees on 2 October 2026, with the first defeated by 172 votes to 178 and the second by 166 to 184. Sánchez has since brought them back to lawmakers in a 21-action package designed to lower the cost of renting and buying a home.
The measures needed parliamentary ratification, so they lost legal effect after the defeats. Sánchez has now returned both housing decrees to lawmakers. The package contains 21 actions to cut the cost of renting and buying a home.
The government's proposal puts its largest financial commitment at €10 billion. The money would fund an ICO financing line for people buying their first property.
The government initially sought validation through the Diputación Permanente. Speaking in Moncloa, Sánchez said circumstances had not changed since the defeat. He called the package a practical response grounded in the current situation.
The plan covers tenants and landlords. Tenants would be able to deduct part of their rent from income tax. The government says that could cut annual payments by almost €1,000 for someone paying an average monthly rent of €800.
Small landlords would receive tax incentives for offering homes at affordable prices. Those figures come from the original proposal. The legislation still needs to confirm them.
First-time buyers would qualify for interest-free ICO loans of up to €50,000. The proposal also aims to expand housing supply, alongside financial relief.
The package reaches beyond purchase assistance.
The decrees set aside €280 million in guarantees for industrialised housing construction. Another €400 million would go to social housing providers. The original proposal also says thousands of Social Security properties suitable for housing could be transferred to CASA47, the public housing company. The proposal sets out these guarantee amounts.
Stability is another part of the plan. Tenants up to date with their payments could extend their contracts for up to two years. Rent increases would be limited. The government also wants clearer rules for renewals and contract endings, including when an owner can recover a property.
The first decree proposed suspending evictions for vulnerable renters without alternative accommodation. The suspension would run until the end of 2030.
Predictability matters in a market where the government says tenants and small property owners both need protection. Sánchez has presented the plan as a pact between those groups, with ordinary landlords outside its basic targets.
The sharper restrictions target speculative activity. The package would regulate seasonal rentals and room rentals. It would restrict home purchases by so-called vulture funds and tie socimi tax benefits to affordable rents.
Tourist flats would have to pay tax as businesses. A separate part of the second decree proposed a 10% VAT rate for tourist rentals. It also set tighter rules for short-term accommodation and seasonal stays.
The government says speculative operators should bear more of the burden, while small owners receive protection.
Madrid's housing dispute has also reached the courts. A court decision against an immediate eviction of the Sol housing protest camp was reported earlier.
Sánchez has acknowledged that the decrees cannot solve Spain's housing crisis alone. He says the country needs firmer market intervention and hundreds of thousands of additional homes, particularly public housing and affordable rentals.
The government lacked the votes. The People's Party opposed the measures. Vox and Junts per Catalunya did too. The Basque Nationalist Party and Coalición Canaria also voted against the second decree, as Euronews and other international outlets reported.
The defeat quickly became a wider political problem. Pressure on Sánchez mounted as expectations of an early election grew. On 5 October 2026, he announced snap parliamentary elections for 29 November.
The failed housing package had become a test of whether his government could govern without a reliable majority.
Public reaction spilled beyond Parliament. Tens of thousands of people marched in more than 50 Spanish cities after the vote. They called for stronger tenant protections and action on rising housing costs.
The protests exposed the gap between renters' sense of urgency and the government's difficulty turning its proposals into law.
The measures offer targeted help, not a complete solution. Rent deductions and first-home loans could ease access for some households if lawmakers approve the proposals. Construction guarantees and the transfer of usable public properties would address supply.
Contract extensions and rent limits aim to prevent sudden insecurity. The anti-speculation rules give the package its sharpest political edge.
Sánchez has returned to Parliament with a more detailed housing plan. Lawmakers have already rejected the two decrees. Their future now rests on a new legislative route and the result of the 29 November election.
