Spanish Prime Minister Pedro Sánchez announced on Tuesday that the government has re-approved two emergency housing decrees, including a 10 billion euro funding line.
The announcement follows leaks from the prime minister's official Moncloa residence in recent days. Spain's lower house of parliament, the Congress of Deputies, voted down the original housing decrees last Friday, prompting cabinet to present updated versions.
The centerpiece of the first decree is a 10 billion euro line of financing to be managed by Spain's official credit agency, the ICO. The funds will cover zero-interest loans of up to 50,000 euros for citizens purchasing their first home.
Sánchez said the funding scheme is intergenerational and available to buyers of all ages, rather than being restricted to young people. He noted that the initial savings required to buy a property remains a major barrier for buyers, which the 10 billion euro allocation aims to break down.
State loans and public housing expansion
The loan mechanism, designated as TU CASA, is designed to complement standard commercial mortgage loans provided by banks. State financing under the scheme will cover up to 20 percent of the home purchase price, capped at a maximum of 50,000 euros, with the lesser of the two amounts being granted.
Homes acquired through the TU CASA program will be subject to a permanent legal restriction capping their maximum resale price. The measure aims to prevent speculative flipping and preserve long-term affordability across the property market.
To address sector demands for expanded public housing stock, Sánchez announced that the state housing corporation Casa 47 will acquire thousands of homes from the Social Security administration. These properties will be transferred into the public housing pool for working people who require affordable accommodation.
The government is also launching a 280 million euro line of state guarantees to promote industrialized construction methods. Sánchez said the funding is intended to accelerate homebuilding timelines and expand overall construction capacity.
In addition, 400 million euros in direct aid will be allocated to social housing providers. The funds aim to strengthen provider capacity to construct new affordable housing units and expand the public housing network.
Tax relief and rental market regulations
The first decree introduces income tax relief for tenants earning less than 33,007.20 euros annually. Eligible renters can claim a new state personal income tax deduction of 10 percent on payments made for their primary residence.
Sánchez explained that the tax deduction will provide savings of nearly 1,000 euros per year for tenants paying a monthly rent of 800 euros.
The second decree re-introduces automatic lease extensions for tenants. However, Sánchez specified that this measure will not enter into force unless it receives explicit ratification from the Permanent Deputation of the Congress of Deputies.
The Congress of Deputies was dissolved after general elections were formally called on Monday for November 29. The Permanent Deputation is the standing parliamentary committee responsible for handling emergency legislative business during election periods.
The original lease extension decree failed to pass parliament last Friday after failing to secure support from key regional parliamentary groups, including the Basque Nationalist Party and Together for Catalonia.
Under the proposed second decree, landlords who refuse to extend a lease agreement without qualifying for specific legal exemptions must compensate the outgoing tenant with up to 12 monthly rent payments.
Tenant protections and landlord safeguards
To ensure key protections remain in place if the second decree is rejected by the parliamentary committee, the government included several rental safeguards within the first decree.
The first decree maintains extraordinary lease extensions for tenants who remain current on rent payments. It also preserves legal caps on annual rent increases and maintains the ban on evicting vulnerable households who have no alternative housing option.
Restrictions limiting property purchases by investment funds have also been retained in the first decree and extended until 2030, compared to the 2028 deadline in the original text. Legal regulations governing room rentals and seasonal leases remain in place.
The updated decree introduces stricter rules for rental property marketing and advertising listings. Advertisements for rental properties must now display the official reference price index in designated high-demand housing zones, the applicable legal rent cap, and whether the property owner is classified as a large landlord.
For small property owners, the regulatory framework governing evictions remains unchanged from the previous decree. However, the new text establishes that public authorities will cover legal court costs and default interest payments where applicable.
Legal debate and government justification
The re-approval of decrees previously defeated in parliament has generated legal doubts among some jurists. Sánchez defended the decision by arguing that the underlying circumstances making the emergency housing measures essential have not changed.
Sánchez described the measures as actions of common sense and humanity intended to stand up against vulture funds operating in the housing market.
The prime minister acknowledged that the measures alone will not resolve Spain's housing crisis. He stated that the private market has demonstrated it does not work and argued for significantly firmer government intervention in the housing sector.
