The vote of PP, the far-right Vox and Junts against the two housing decrees has brought down this Friday a package of measures that was supposed to give more stability to tenants, protect vulnerable households from evictions and facilitate the purchase of a first home. Incentives to lower rents and rules to prevent temporary or room contracts from circumventing the guarantees of regular rental are also lost.
The first decree has been rejected by 178 votes to 172, with the 'no' also from Unión del Pueblo Navarro. The second, focused on automatic contract renewals, has fallen by 184 votes to 166, with the Basque Nationalist Party and Coalición Canaria joining the rejection. Junts had negotiated the first text, but announced its refusal the night before. The separation of the measures sought to save at least the broader package.
The parties that have overturned them question their effects on the market and the supply of housing. The president of the PP, Alberto Núñez Feijóo, has accused the Government of acting with "electoral calculation". His vote has also blocked tax advantages for owners and the financing of the down payment for a first home, included along with protections for tenants.
The vote comes after the eviction of Maricarmen Abascal, 87 years old, which triggered a new wave of protests. The mobilization has overflowed the Puerta del Sol, where the encampment continues. There are more than 50 calls this weekend, with events this Friday in Seville, Bilbao, Vitoria, Donostia, Pamplona and Segovia, and new marches on Saturday in Madrid, Valencia, Zaragoza, Malaga and other cities. Tenant unions maintain their commitment to a general strike, still without a date.
What is lost are the new guarantees and aid from these decrees. Current contracts maintain their obligations and the protections that correspond to them under applicable law. Rent reviews remain subject to the rules applicable to each contract. The scope of extension requests that tenants may have communicated during the brief validity of the rules remains to be clarified.
Evictions, rents and purchase aid
The first consequence is the fall of the anti-eviction shield until December 31, 2030, for vulnerable people without housing alternatives. The protection required proof of this situation and included exceptions for vulnerable owners. It included compensation and a mechanism for the autonomous community to assume non-payments when it did not offer an alternative home, avoiding eviction and maintaining the contract.
Also disappears the extraordinary extension of up to two years for current contracts that met the requirements, linked to maturities prior to December 31, 2028. It had to be requested, be up to date with the rent, and have paid during the previous eight months. The landlord had to accept it except for exceptions, such as an accredited need to recover the apartment for themselves or for family members. It allowed gaining time without having to look for another house at market prices.
To that measure was added an extraordinary limitation of annual revisions until the end of 2027. Rents above the maximum of the state reference system were frozen; in other cases, the increase could not exceed 2% if there was no new agreement between the parties. This is stated in the Official State Gazette. The protection declines with general inflation at 4.9% in September, according to the advance indicator of the National Institute of Statistics.
The reform of the seasonal and room rental is also lost. Temporary contracts had to respond to a real and accredited cause; their unjustified use could lead to them being considered habitual housing rentals. In addition, the sum of the rents of the rooms could not exceed that corresponding to the entire apartment. The aim was to prevent dividing an apartment or chaining temporary contracts from allowing the circumvention of habitual rental protections.
In tax matters, the state deduction of 10% of habitual rent falls for taxpayers with a taxable base of less than 33,007.20 euros, subject to limits and requirements. Also disappear the new reductions for landlords, which could reach 100% in certain cases of affordable rental or price reduction, and the lesser tax advantage provided for those who increased the rent. The package also included incentives to sell homes to public entities.
The rejection halts the 'Tu Casa' program, with interest-free loans of up to 50,000 euros to finance the down payment for a first home. The Official Credit Institute was to manage financing of up to 20% of the price, complementary to the mortgage. It contemplated up to 30 years of grace period, linked to mortgage payments, and up to ten to repay the loan. Conditions remained to be developed, and there would be limits on the resale price.
Also fall the restrictions until the end of 2028 on certain speculative acquisitions by real estate entities, including gratuitous purchases or purchases below 70% of the appraisal value, with exceptions for social uses and other cases. The tax reform for listed real estate investment companies also disappears, which raised the special tax on certain undistributed profits from housing rentals to 25%, with reductions linked to affordable housing.
The decree also included a 10% VAT for tourist accommodations in the foreseen cases, new municipal surcharges on the Property Tax for empty and tourist homes, and a 4% VAT for permanent or indefinite protected housing. The strengthening of CASA 47, the state housing entity, and the limits on the price of future sales of its homes to preserve their affordable nature are also lost.
Automatic renewals and indemnities
The second decree aimed to address one of the main sources of insecurity for tenants, the expiration of the contract even if they have met their payments. Finding another home means facing a move and new deposits, with consequences for work, children's studies, or staying in the neighborhood.
The norm established that, once at least five years of contract had passed, or seven if the owner was a company, the rent would be renewed for successive periods of the same duration if neither party communicated their intention to terminate it. The general notice period for the landlord increased to six months; for the tenant, it remained at two. There were transitional rules for contracts that were already close to expiring.
The reform also obliged the landlord who decided not to renew to compensate the tenant with at least twelve months' rent for a dwelling of similar characteristics. The amount would be calculated, when possible, with the state reference system and would never be less than one month's rent per year of residence. It sought to provide time and resources to find another home.
There were exceptions, such as the need to recover the flat for the owner or their family, a prolonged and unjustified absence of the tenant, that the tenant had another suitable dwelling in the same municipality, or certain circumstances of vulnerability of the landlord. The sale of the dwelling also did not eliminate the compensation when it was due; that obligation passed to the buyer who assumed the position of the landlord.
