The Spanish government recently unveiled an ambitious housing plan to tackle the country’s growing housing crisis.
The plan focuses on three main pillars: increasing the supply of public housing, improving the regulation of the housing market and providing more support to citizens.
I. THE NEW HOUSING PLAN MEASURES
The following are the main measures announced and when they will come into force:
1. INCREASE IN PUBLIC HOUSING
- Transfer of assets to the Public Housing Corporation: The State has transferred 3,300 housing units and two million square metres of residential land to the new Public Housing Company. This company will be responsible for building social housing at affordable rents. The following actions are already underway
- Incorporation of Sareb assets: Immediately, 13,000 homes from the Sociedad de Gestión de Activos Procedentes de la Reestructuración Bancaria (Sareb) will be incorporated into the Public Housing Company, with a further 17,000 homes to be incorporated progressively in the future. These actions are already underway
- Priority in the purchase of housing and land: The new Public Housing Company will have priority in the acquisition of housing and land, complementing the right of the Autonomous Communities to expand the public housing stock.
- Protected Housing Shield: A legal mechanism will be established to guarantee that all housing built by the State will remain in public ownership indefinitely, preventing these properties from ending up in the hands of speculators or investment funds.
2. NEW REGULATION OF THE PROPERTY MARKET
- New PERTE for Housing: A Strategic Project for Economic Recovery and Transformation (PERTE) will be created to promote innovation and modernisation of the industrialised and modular construction sector, with the aim of building housing in less time and at lower cost. This project will be located in the province of Valencia.
- Regulation of tourist accommodation: The government will propose that tourist housing be considered an economic activity and therefore subject to VAT. This measure aims to bring tourist rentals into line with other economic activities in terms of taxation and to control their impact on the housing market.The requirements for setting up a tourist lodging in Madrid are regulated in our article on the subject, which can be consulted at the following link 8.
- Conditioning of tax benefits for SOCIMIS: The tax benefits for SOCIMIS will be modified so that they only apply to those that promote affordable rental housing, thus encouraging their contribution to the affordable rental market.
- Restrictions on home purchases by non-resident foreigners: The tax rate for non-resident non-EU foreigners buying homes in Spain will be increased to 100%, with the aim of prioritising access to housing for residents and reducing property speculation. This measure is subject to the approval of Congress. Once approved, the date of application will be determined.
The steps required for non-residents to purchase a property are explained in our article on buying a property in Madrid.
3. INCENTIVES
- Public guarantee system: A system of public guarantees will be introduced to protect both homeowners and tenants participating in affordable rents. This system, inspired by successful models in other European countries, will be implemented from 2025 for landlords renting to people under 35. This measure will be in place by 2025.
- Programme for the rehabilitation of empty dwellings: A programme will be launched to renovate empty dwellings for subsequent rental at affordable prices. Grants will be awarded to owners who renovate their properties and make them available for affordable rent for a minimum of five years.
- 100% exemption from personal income tax: The government will propose to Congress a 100% exemption from personal income tax (IRPF) for owners who rent their homes according to the reference price index, thus providing an incentive to rent at moderate prices even in areas not declared as stressed. This measure is subject to legislative approval by the Congress of Deputies. Once approved, the date of its entry into force will be determined.
To qualify for this tax exemption, landlords must meet a number of requirements:
1. Rent in accordance with the reference price index: The amount of the rent must be within the limits set by this index, which is calculated according to the location, size and characteristics of the dwelling.
2. Affordable rental contract: The dwelling must be rented under a contract that guarantees the protection of the rights of the tenant, in accordance with the regulations in force.
3. Fiscal residence in Spain: The owner must be a tax resident in Spain to benefit from this measure.
4. Registration of the property: The property must be registered as available for rent in the appropriate registers and the contract must be notified to the Tax Agency.
- New National Housing Plan 2026: A new National Housing Plan will be drawn up to come into force in 2026, which will increase the existing aid programmes for renting and buying a first home, with special attention to young people, the elderly, people with disabilities and residents of disadvantaged areas. This plan will enter into force in 2026.
II. WHAT LAWS THE NEW HOUSING PLAN AMENDS
The new Housing Plan, announced by the Spanish Government in January 2025, provides for the modification of several laws and regulations in order to address the housing crisis and promote access to affordable housing. The main laws that will be affected include
1. Land Law: A reform of the Land Law is proposed to facilitate the mobilisation of land for the construction of affordable housing. The amendment aims to streamline urban planning procedures and promote more efficient development of available land. Tax regime for SOCIMIs: The government plans to review the tax advantages for SOCIMIs that do not use their assets for affordable rental. The aim of this measure is to encourage these entities to contribute to increasing the stock of affordable rental housing.
2.Personal Income Tax (IRPF): IRPF exemptions will be introduced for homeowners who rent their homes according to the reference price index. This initiative aims at stimulating the supply of moderately priced rental housing and will be reflected in the relevant tax regulations.
3.Regulation of tourist dwellings: Dwellings intended for rental to tourists will be treated fiscally as economic activities, which implies the application of value added tax (VAT). This measure will require adjustments to the tax legislation and regulations relating to economic activities.
4. Restrictions on the purchase of residential property by non-resident foreigners: The tax burden will be increased to 100% of the value of the property for foreign buyers who are not residents of the European Union. This measure implies changes to the tax laws and regulations governing foreign investment in the real estate sector
The implementation of these reforms will depend on the relevant legislative processes and the cooperation between the different public administrations.
If you have any questions regarding the new measures of the Housing Plan, please contact us.
